The General Assembly is passing House Bill 150, the Budget Bill and the Budget Reconciliation and Financing Act of 2017 (BRFA) in what could be record time this session – this morning, both chambers approved the Conference Committee report, when the Conference Committee was only just appointed last Friday. Of importance to counties:
SDAT Cost Shift Officially Dead
Both the Senate and House budget subcommittees voted to reject the Governor’s proposal to make counties responsible for nearly all operating costs for the assessment and directorial functions of the State Department of Assessments and Taxation (SDAT) – 70 percent in fiscal 2018, and 90 percent for every year thereafter. The Conference Committee did not overturn those decisions, taking this cost shift officially off the table for good.
Highway User: More Than Last Year, But Less Than Proposed
The Conference Committee adopted the Senate’s position to reduce the Governor’s proposal to provide transportation capital grants to counties. Counties’ share was reduced from $27.4 million to $12.8 million. This includes $4 million of capital grants which counties have received since fiscal 2016. Baltimore City’s share was maintained at $5.5 million, and municipalities’ share remains at $20.1 million. Bottom line: 23 counties will receive $8.8 million in additional local transportation aid from last year.
In addition, for FY18 only, “highway user revenues distributed to Baltimore City may be used to pay or finance students’ costs of discounted Maryland Transit Administration fares for eligible public school students in Baltimore City.”
New Statutory Language Restricts Local Transportation Aid
In response to concerns expressed by the Department of Legislative Services (DLS) regarding the Maryland Department of Transportation (MDOT)’s programming of local transportation aid, the Conference Committee adopted BRFA language prohibiting MDOT from programming capital transportation grants to local governments in the Consolidated Transportation Program (CTP) beyond the budget request year. The new language is intended to address concerns expressed by DLS that the Governor’s “capital grants” are titled incorrectly and programmed inappropriately in out years. It states:
Except as authorized by law, the Consolidated Transportation Program may not include capital transportation grants to counties or municipal corporations for any period beyond the budget request year ….
For the period beyond the budget request year, the financial forecast:
- Shall maximize the use of funds for the capital program; and
- Except as authorized by law, may not withhold or reserve funds for capital transportation grants to counties or municipal corporations.
Disparity Grants Restored, Then Cut $2.4 Million
The Governor’s budget funded disparity grants at fiscal 2017 levels. The Conference Committee rejected that flat funding provision, but also reduced the minimum grant amount from 67.5% to 63.75% of the disparity grant calculation provided in fiscal 2018 only. This reduces the total disparity grant amounts under the statutory formula for fiscal 2018 by $2.4 million.
The Conference Committee also adopted the Senate’s proposal to restrict funding for disparity grants for jurisdictions receiving an increase until the Maryland State Department of Education certifies that each jurisdiction has increased local spending on public schools above the Maintenance of Effort (MOE). The Conference Committee specified, however, that increased allocations to public schools under this language will not increase MOE requirements in fiscal 2019. The report language is available here.
Relieved From Mandate Relief
Both chambers agreed to strike the Governor’s “mandate relief” proposal, which would have capped the growth of most formulaic appropriations at projected general fund revenue growth, less 1.0%.
MACo will provide additional information as it becomes available.