On March 27, the State Treasurer Nancy Kopp and State Comptroller Peter Franchot joined MACo’s Legislative Committee Meeting to discuss fiscal issues of national and local importance.
MACo Secretary John Barr led the meeting, beginning with a thank-you to the Treasurer for her willingness to discuss and work with MACo on its 2013 initiative to provide a county representative on the Board of Trustees for the State Retirement and Pension System. The Treasurer, who chairs the Pension Board of Trustees, noted that she looked forward to working with MACo’s representative.
Treasurer Kopp then began a conversation with the Legislative Committee about a possible change in the tax-exempt status of municipal bonds, rules-revisions for money-market mutual-like funds, and a potential downgrade of debt ratings.
On the subject of tax-exempt municipal bonds, the Treasurer shared her concern over Congress revoking or capping the tax-exempt status of municipal bonds. According to the Treasurer, revoking the tax-exempt status would impair county infrastructure investments and cost the middle class tax payer.
The Treasurer described how the Securities and Exchange Commission was looking to revise rules for money-market mutual and other like funds, which are the largest buyers of local bonds. The Treasurer described how the new rules could negatively affect the Maryland Local Government Investment Fund, which has consistently provided better rates, and more transparency to county government bonds.
The treasurer also shared how a downgrade the federal government’s credit rating could hurt Maryland, since Moody’s considers the state dependent on federal government revenue. As described by the Treasurer, if Moody’s downgrades the federal debt, then Maryland’s would also be downgraded, and at this point, “there would be nothing that we could do about it.”
Comptroller Franchot thanked MACo for the invitation to join the meeting, greeting the County Executives in attendance, including Baltimore County Executive David Craig, Anne Arundel County Executive Laura Neuman, and MACo’s President, Wicomico County Executive Rick Pollitt. The Comptroller spoke about the need for greater fiscal responsibility in public finance to further economic, environmental, and healthcare goals. The Comptroller urged that with an eye towards fiscal responsibility and a pair of “green eyeshades,” public expenses could be minimized while advancing these aims.
The Comptroller shared recent results of Maryland’s tax-free energy star weekend in which environmentally friendly appliances were sold without Maryland’s sales tax. This program, anticipated by some to create a dip in tax revenue, effected an increase in sales tax revenues as shoppers purchasing tax-free products also purchased taxed items while shopping. The Comptroller also noted health care costs as an area where expenses could be reduced, citing a study that showed up to 1/3 of medical procedures do not benefit patients’ health.
Secretary John Barr thanked the Comptroller and State Treasurer for their State leadership, for their resources their staff provide to MACo, and their frequent participation in MACo’s conferences and events.