On the latest episode of the Conduit Street Podcast, Kevin Kinnally and Michael Sanderson discuss a potential “deal” on local roads funding, explain MACo’s position on the Budget Reconciliation and Financing Act (BRFA), break down the Knott Commission school construction legislation, and examine a new proposal for funding to enhance school safety across Maryland.
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Highway User Bill in the Fast Lane – “Deal” Locks in 5yr Funding Increase
A House Committee has amended and is advancing HB 807, legislation to increase state funding for locally-maintained roads and bridges. The five-year plan would set new, higher levels of funding for county and municipal roadways beginning in FY 2020. Signs point to the bill marking a negotiated “deal” including legislative leaders from both chambers, clearing its path to passage this session.
Both MACo and MML have made restoring Highway User Revenues a top priority for years, as recession-driven cuts left local governments with a fraction of historic funding levels of state transportation revenues.
The amended version of HB 807 would roughly double the funding for county governments in each year — to approximately $58 million each year. The funding would be designated as “capital transportation grants” rather than simple statutory distributions (the effect of this terminology change on local governments is unclear, but may be negligible). The new funding level for counties would represent 3.2% of the funds from the Highway User Revenues, coming from taxes on motor fuels, vehicles, and other transportation-related sources — an increase from 1.5% today (through a combination of traditional HUR and capital grants).
The municipal share would be adjusted to 2.0% of the total, and the share for Baltimore City (which has the unique responsibility of maintaining nearly all state roads within its boundaries) is adjusted to 8.3%.
MACo On BRFA: Drop the SDAT Cost-Shift, Don’t Permanently Cap Formula Increases
At this week’s hearing on the Budget Reconciliation and Financing Act of 2018 (“BRFA”), Department of Legislative Services (DLS) analysts recommended striking the provision which would shift 90 percent of costs for certain State Department of Assessments and Taxation (SDAT) functions onto the counties – concurring with MACo’s suggested amendment to delete this provision from the BRFA.
As introduced, the bill would shift nearly all costs for SDAT’s property assessment, information technology and Office of the Director costs onto the counties. Currently, counties fund 50 percent of assessment and information technology functions. The cost shift would have placed an additional $20 million on the backs of county budgets.
Section 8 of the BRFA is intended to reduce out-year expenditures by permanently capping formula increases in statutorily mandated programs to the level of general revenue growth minus 1 percent. In effect, this section could have some of the deepest and longest-lasting effects of any fiscal policy, as formulas and spending priorities would be dramatically abrogated over time. The effect of this “mandate relief” would place important county programs in jeopardy and uncertainty. MACo urges the Committees to reject this section of the BRFA, and to retain the year-by-year public hearings and evaluations of any cuts and changes needed to effect that year’s budget plan.
Unpacking the School Construction Legislation
The Knott Commission bill, expecting to be a major piece of legislation in the 2018 Session of the General Assembly has now been introduced.
One of the main questions with regard to the Knott Commission’s recommendations was how its main suggestion – that the State conduct an assessment of every school facility in use and rank them – would affect the State’s priorities for school construction funding.
HB 1783 leaves that question for another day by establishing a work group to review the results of the first assessment and whether the results should be incorporated into school construction funding decisions. The 9-member Work Group on the Assessment and Funding of School Facilities would be chaired by the State Superintendent of Schools and would include a representative of MACo.
In the wake of a mass shooting at a Florida high school that triggered an outcry for accountability and reform, Governor Larry Hogan announced that the administration will commit an additional $125 million to accelerate and enhance safety improvements in schools, including secure doors and windows, metal detectors, security cameras, panic buttons, and other capital improvements. Hogan also announced he will allocate an additional $50 million in operating funds each year for new school safety grants, which could be used for school resource officers, counselors, and additional safety technology.
The funding will be allocated through the governor’s education lockbox proposal, which provides an additional $4.4 billion in education spending from casino revenues.
As an immediate step to activate the emergency legislation, the governor announced a supplemental budget that provides an additional $5 million for the Maryland Center for School Safety, an increase in funding of 600 percent. The funding will enable the center to hire analysts and social media trackers, allocate staff in more regions of the state, and assist schools with conducting the mandated safety assessments.