DLS Recommends Additional County Reductions and Cost Shifts

In its presentation before the Senate Budget and Taxation Committee and the House Appropriations Committee on HB 72/SB 87, the Department of Legislative Services (DLS) offered additional recommendations that, if adopted, would further reduce county budgets.  These recommendations are summarized below.

Provision as Recommended by DLS: Change the revenue source of the agency’s expenditures from the pension trust to a charge of the State agencies and local employers that receive State funding for their retirement costs. Charge would begin in fiscal 2013.

Explanation:  This recommendation would levy a per-employee administrative charge against  State and local employers that receive State funding for their retirement costs.  The charge is approximately $163 per participant and, at the local level, would apply to the local boards of education and other non-State managed entities such as local libraries and community colleges generating approximately $17.3 million in State revenue.

Provision as Recommended by DLS: Require local jurisdictions to reimburse the Maryland Parole Commission (MPC) for costs of conducting parole hearings for inmates in local correctional facilities.

Explanation:  This recommendation would shift the Division of Parole and Probation personnel costs for conducting the pre-parole investigation and Maryland Parole Commission personnel costs for scheduling, processing, and conducting parole proceedings for locally held inmates, and travel costs to local jurisdictions.  The fiscal effect on each jurisdiction will vary depending on the cost of providing a parole hearing in that county and the number of hearings scheduled.  It is estimated that this change will reduce State general fund expenditures by approximately $575,000 and increase State special fund revenue equal to the amount of the total per county reimbursement as determined by the MPC.  DLS also recommended the use of video teleconferencing services and equipment to reduce county costs.

Provision as Recommended by DLS: Permanently redirect to the general fund, beginning in fiscal 2013, the annual State transfer tax revenue attributable to the 0.5% of the consideration paid for the transfer of real property from one owner to another. Mandate minimum funding levels from either general funds or general obligation bond funds for programs and purposes that under current statutory provision receive an allocation of State transfer tax revenues as provided for in Section 13-209 of the Tax – Property Article and Section 5-903 of the Natural Resources Article.

Modify the existing allocation under Section 13-209 of the Tax – Property Article and Section 5-903 of the Natural Resources Article to add the additional 1.0% State land acquisition amount to the 75.15% Program Open Space (POS) allocation and remove certain provisions. Remove from statute the following provisions: (1) the Department of Natural Resources (DNR), the Department of General Services, and the Maryland Department of Planning (MDP) receiving up to 3.0% of the overall transfer tax revenue for administrative expenses; (2) State parks and forests receiving the greater of $21.0 million or 21.0% of the POS allocation; and (3) the POS Capital Development allocation providing up to $1.2 million for operating State forests and parks. Beginning in fiscal 2013, these expenses would be supported by the general fund.Modify the provision in Section 13-209 (g) of the Tax-Property Article requiring replacement of transfers of State transfer tax revenues to the general fund to apply only to the fiscal 2006 transfers.
In addition, add a provision whereby the mandated fiscal 2013 funding levels would be reduced by any fiscal 2011 transfer tax revenue underattainment.

Explanation:  This recommendation will permanently redirect the State transfer tax revenue that is currently used for State land preservation and heritage programs to the general fund and funds these programs out of the general fund budget at the mandated minimum level of $50 million under a modified allocation methodology.  Additional general fund revenue is retained in the general fund to be used for other purposes.  For FY 2012,  the general fund will receive an additional $56.7 million in revenue, increasing to $93.3 million in FY 2016.

The local share of POS will be flat funded at a considerably lower amount of $17.5 million in FY 2013 through FY 2016.

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