Maryland Governor Releases List of Vetoed Bills

On May 22, the Maryland Governor’s Office released a list of six bills that the Governor has vetoed. The bills are:

The General Assembly may override the Governor’s veto on any bill at the next regular or special session by a vote of three-fifths of the members of each house. Of the bills that the Governor vetoed, one is of particular interest to all county governments. SB 190 is a bill that would require online travel companies to pay Maryland state sales taxes on hotel rooms booked online based on the retail rate of the room. MACo advocated for an amendment to the bill that would have extended the scope of the bill to to include local hotel taxes, but was unsuccessful.

Bills that have not yet been signed by the Governor and are not on the veto list are likely to become law without the Governor’s signature. These include, HB 552, a bill that could increase health insurance costs for small businesses and small governments that self-insure; and two budget-related bills, SB 183 mandating the full geographic cost of education funding (GCEI) and HB 72, the Budget Reconciliation and Financing Act of 2015 (BRFA). The Governor has already stated that he will let SB 183, the bill that would mandate full GCEI funding go into effect. HB 72, the BRFA bill, makes changes to numerous funding requirements to balance the state spending plan for FY 2016.

With regard to HB 552, MACo and MML opposed the bill along with stop-loss medical health insurance providers during the legislative session and also had requested the Governor’s veto. This week, the Maryland Insurance Administration began to reach out to stakeholders to form the study group required under the bill. MACo will work on the study group to assess the negative effect of the new law on the costs of health insurance for small counties.

For more information, see our previous post, Several Key Bills in Limbo Awaiting Governor’s Final Action, and the bill information below.

Geographic Cost of Education Index (GCEI)

SB 183 Education – Geographic Cost of Education – Requirement changes the GCEI formula from discretionary to mandatory, if full funding of GCEI is not provided for in the fiscal 2016 operating budget. GCEI is state aid provided to counties with higher costs of education. The bill takes effect July 1, 2015. The funding was previously discretionary and Governor Hogan’s proposed budget funded GCEI at 50%. SB 183 and the General Assembly budget plan funds GCEI at 100% ($136.2 million) in fiscal 2016. Most of the funding from GCEI is directed towards Baltimore City, Montgomery and Prince George’s counties. Read MACo’s letter requesting full funding for the GCEI formula here.

Budget Reconciliation and Financing Act of 2015 (BRFA)

HB 72  Budget Reconciliation and Financing Act of 2015 (BRFA), accompanies the budget bill (HB 70) and makes numerous changes to statutory funding formulas and requirements to bring the budget into balance for fiscal 2016.  The funding formula changes to provide additional dollars for health departments, community colleges, local impact grants, disparity grants, and other programs are included in this bill.  HB 72 also includes language to repeal the corridor funding method for the State pension system and provides for a $75 million supplemental payment to the State pension system to address the unfunded liability instead of the formerly required $150 million.

Medical Stop-loss Insurance

HB 552 Health Insurance – Medical Stop-Loss Insurance – Small Employers, makes several changes to laws regulating the medical self-insurance market. In part, the bill increases the minimum attachment point for medical stop-loss insurance policies, creating potential cost increases for small businesses and small local governments who self-insure. MACo opposed the bill’s restriction of local options for county governments providing health insurance for their own employees. For more background, read our article, MACo, MML Request Veto of Bill Restricting Medical Insurance Market.

Imposition of Sales Tax on Hotel Rooms

SB 190 Sales and Use Tax – Taxable Price Accommodations, would require online travel companies to remit the state sales tax based on the retail price of a hotel room, not the wholesale rate the online travel companies pays to a hotel. MACo offered amendments to include local hotel taxes in the scope of the bill, but was unsuccessful. Now, some advocacy groups are urging a veto. Grover G. Norquist, President, Americans for Tax Reform, has sent a letter urging Governor Hogan to veto this legislation. For more background, read our article, Equitable Hotel Tax Passes, May A Veto Loom?