Allegany Budget Proposed, Tough Choices Paying Off

The Allegany County Commissioners received their Finance Department’s proposed fiscal 2018 budget last week, which includes $86.9 million budgeted to the general fund, and no tax increases. The total budget is $124.2 million. The budget increases by 0.74 percent over fiscal 2017, and reduces the property tax rate by one penny.

In his cover letter to the County Commissioners, Allegany Director of Finance Jason writes:

The hard decisions and tough cuts and sacrifices of the past several years are allowing us to present this budget with slight increases and allows us to continue to maintain a strong financial position that the tax payers deserve of their government. We have reached or exceed our goals for debt service and fund balance continues to be well positioned so that we may offer the services we promise to our citizens.

The Board of Education’s budget increases by $254,323, or 0.8 percent over fiscal 2017, meeting maintenance of effort. County employees receive a two percent Cost of Living Adjustment. Debt service decreases by a small amount and makes up 3.4 percent of the budget.

The budget reflects an increase of 16 percent in health insurance costs. During the next year, the county intends to rebid its health insurance and explore a retirement incentive for county employees.

Nearly half of revenues funding the general fund come from the property tax, which funds 47.38 percent of the budget. Income tax revenues, which are projected to decline by $500,000, fund 30.67 percent. The state disparity grant funds 10.28 percent of Allegany’s general fund.

Most of the general fund – 70.4 percent – funds services not directly provided by county government. This includes K-12 education (35 percent), and the detention center and Allegany College (8.8 percent each), as well as the State’s Attorney’s Office, library, health department, and 911 services.

The Preliminary Budget is available here. Preliminary budget hearings are scheduled for May 4 and 18, with adoption scheduled for June 1. The Capital Improvement Program is scheduled for presentation on May 4, 2017. Questions on the budget may be sent to finance@alleganygov.org.

Tennessee Counties Get A Local Infrastructure Fast Track

Tennessee just increased their gas tax – and that state is sharing its additional transportation revenue with its counties. Last week, Governor Bill Haslam signed the Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy (IMPROVE) Act – which is estimated to provide $250 million to the State Department of Transportation, $35 million to cities, and $70 million to counties.

The Act also grants the state’s most populated counties the authority to approve additional tax increases for local transportation projects, if approved by referendum. According to The Tennessean:

Twelve of the state’s most populous counties will be allowed to hold a referendum to ask their residents if they would approve additional tax increases to help pay for transportation projects, including mass transit. If voters approved the referendum, the taxes that local governments could raise are: sales tax, business tax, car rental tax, hotel/motel tax, residential development tax and wheel tax.

Additional surcharges enacted would be capped at 20 percent of the current rate.

Any proposed projects funded by the additional surcharges would be subject to an audit by the state’s comptroller, who would need to sign off on the plan in advance.

Overall, the IMPROVE Act increases the state’s gas tax from 21.4 cents per gallon by six cents per gallon over three years. Diesel taxes increase by 10 cents over three years.  The IMPROVE Act also increases some vehicle registration fees and offsets the impact on its residents’ wallets by decreasing other taxes.

Haslam and others have argued every area in the state will see their projects funded through the bill, and the measure will prevent local governments from using alternative means, such as increasing property taxes, to pay for needed improvements.

Tennessee counties own 64 percent of the State’s public road miles and receive 20 percent of the state’s transportation funding, according to data from 2014 provided by the National Association of Counties. In comparison, Maryland’s counties (excluding Baltimore City) own 69 percent of the public roads, and receive 1.4 percent of highway user revenues. When the Maryland General Assembly increased the gas tax five years ago via the Transportation Infrastructure Investment Act of 2013, none of those new revenues funded local roads and bridges – all of that money funds the Maryland Department of Transportation.

New “Textalyzer” Catches Distracted Drivers Phone-handed

New technology may help law enforcement catch motorists “phone-handed” who text while driving. The new “textalyzer” technology would allow law enforcement to determine whether a driver texted when behind the wheel, particularly immediately before an accident.

For law enforcement to get phone records, they must acquire a warrant first – but the textalyzer would not require this time-consuming step, reports NPR. From the story:

“Phone records — as I found out the hard way — they’re tough to get [and] it’s an agonizing process,” says Ben Lieberman of New Castle, N.Y., whose 19-year-old son was killed in a car crash in the Hudson Valley, north of New York City, in 2011. ….

“We often hear, ‘just get a warrant’ or ‘just get the phone records. … The implication is that the warrant is like filling out some minor form,” he says. “It’s not. In New York, it involves a D.A. and a judge. Imagine getting a D.A. and a judge involved in every breathalyzer that’s administered, every sobriety test that’s administered.”

Leiberman filed a civil lawsuit to subpoena the phone records, which showed the driver had been texting before the crash. But even getting the phone records won’t tell you much, he says. “It doesn’t detect any of the important distractions, like email, social media or web browsing.”

So even though New York and most other states ban texting and other kinds of cellphone use while driving, Lieberman says those laws are difficult to enforce.

“The takeaway is, our current law is a joke,” he says.

Liberman may have found an answer to the problem. He co-founded Distracted Operators Risk Casualties (DORCs), an advocacy group working with developers to create the textalyzer. A police officer can simply plug it into a driver’s phone, press a button, and within seconds download relevant phone activity, including a summary of what apps on the phone were open and in use, as well as screen taps and swipes. In New York, a bill authorizing textalyzer use has passed out of one committee and is pending in another.

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The device does not download content, reports the device’s developers – but even so, some have concerns about its overreach.

“Distracted driving is a serious concern, but this bill gives police power to take and search our phones after almost every fender-bender,” says Rashida Richardson, legislative counsel for the New York Civil Liberties Union. “This is a concern because our phones have some of our most personal and private information — so we’re certain that if this law is enforced as it is proposed, it will not only violate people’s privacy rights, but also civil liberties.”

Distracted driving is, without question, a serious concern. Traffic fatalities are on the rise, and many attribute distracted driving as a likely contributor. Fatalities nationwide increased by six percent last year, or 40,000. Yesterday, Maryland Department of Transportation (MDOT) Secretary Pete K. Rahn issued a “call-to-action” to eliminate highway fatalities in Maryland.  Preliminary data collected by MDOT indicates that in 2016, 523 people died in traffic crashes on the state’s roads, up from the 521 who died in 2015. According to the MDOT Highway Safety Office’s Toward Zero Deaths campaign, 185 people die every year in Maryland from distracted driving crashes, and more than 27,000 more are injured.

 

President’s Budget No Boon For Local Infrastructure

Despite much-touted plans for investment in infrastructure, President Trump’s proposed budget only depletes opportunities for Maryland counties to benefit from important transportation funding opportunities.

Transportation for America, an organization advocating for investment in “in smart, homegrown, locally-driven transportation solutions,” reports that the President’s proposal cuts funding for new transit lines, including the Purple Line. It also eliminates the popular Transportation Investment Generating Economic Recovery (TIGER) grant program, one of only a few programs which makes Federal transportation funds available directly to counties for specific infrastructure projects. It also terminates funding for long-distance passenger rail lines.

The President’s budget eliminates funding for building new transit lines – presumably including the Purple Line. Transportation for America reports:

This budget eliminates future funding for building new public transportation lines and service, threatening the ability of local communities of all sizes to satisfy the booming demand for well-connected locations served by transit. While the handful of projects with full federal funding grant agreements (FFGAs) already in hand would (theoretically) be allowed to proceed, all other future transit projects would be out of luck. The budget proposes to phase out future funding for what’s called the transit capital investment grants program — more informally referred to as New Starts, Small Starts and Core Capacity grants.

The Purple Line does not yet have its FFGA, placing the project’s projected $900 million in federal funds at grave risk. The FFGA was scheduled to be signed on August 4, 2016, but litigation delayed its execution.  According to the Administration’s budget proposal:

Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.

The budget also eliminates the TIGER program. The fiercely competitive TIGER program funds innovative projects, including multi-modal projects, which leverage partnerships between multiple jurisdictions and the private sector. The program has brought at least $40 million in federal infrastructure investment to Maryland, including $10 million each for:

  • bus rapid transit along 14 miles of US 29 in Montgomery,
  • multimodal road improvements through the MD 175 Fort Meade Multimodal Accessibility Project in Anne Arundel,
  • Port of Baltimore enhancements including capacity expansion and construction of a rail intermodal facility, and
  • most recently, the North Avenue Rising project, which improves five miles along North Avenue in Baltimore City with dedicated bus lanes, roadway repaving, transit signal priority installation, enhanced bus stops, sidewalk improvements, bike share stations, bike lanes, and a subway station and intersection improvements.

 

The Administration’s budget proposal also cuts funding to Amtrak, and “terminates Federal support for Amtrak’s long distance train services.”

About Transportation for America:

Transportation for America is an alliance of elected, business and civic leaders from communities across the country, united to ensure that states and the federal government step up to invest in smart, homegrown, locally-driven transportation solutions — because these are the investments that hold the key to our future economic prosperity.

Rainy Day Funds: What Counts As Rain?

When it comes to tapping into rainy day funds, how much rain makes a day rainy? What justifies tapping into reserves? That’s the question the Pew Charitable Trusts seeks to address in its latest report, When to Use State Rainy Day Funds.

Despite most states experiencing strong revenue growth from fiscal 2003 to 2007, 22 states made withdrawals from their reserves at least once. Then when the Great Recession took a brutal toll on state coffers from 2008 to 2010, eight states did not tap into the rainy day funds at all.

Flawed withdrawal policies may be to blame, Pew opines. Pew examined 47 states’ withdrawal policies, and found that a significant number of states have unclear policies for when to make withdrawals. Six states, including Maryland, have no policies governing when to make withdrawals at all. Most states – 29 – do not have policies which allow for consideration of revenue or economic fluctuations when tapping into their rainy day funds.

At any given time, a number of considerations may factor into policy makers’ decisions over whether to tap into rainy day funds. The report cites Maryland lawmakers’ fear of a credit downgrade:

Lawmakers often cite their state’s creditworthiness as a reason for not withdrawing from their budget stabilization funds. During the Great Recession, Maryland’s stabilization fund stayed at about 5 percent of general fund revenue. As former Maryland Senator Barbara Hoffman noted, the state uses its Revenue Stabilization Account as more of a fail-safe, in part out of a desire to maintain its credit rating. “We don’t spend it, and that’s one of the reasons we have a triple-A bond rating in this state.”

In Maryland, the Governor may transfer funds from the Revenue Stabilization Account to the general fund “as necessary to support the operation of State government on a temporary basis,” so long as the General Assembly blesses the transfer, and it does not cause the account balance to drop below 5.0 percent of the estimated general fund revenues for that fiscal year.

Rather than focusing on withdrawal policies, Maryland has taken steps this past session to address budgeting around economic volatility by saving more conservatively. On March 31, Governor Larry Hogan signed into law House Bill 503, which codifies an approach recommended by The Department of Budget and Management, the Comptroller, and the Department of Legislative Services in their November 2016 report, Report on Revenue Volatility and Approaches to Reduce Risk to the State Budget.

The new law requires that the Revenue Stabilization Account or the newly established Fiscal Responsibility Fund receive a share of nonwithholding general funds above a cap that is based on the 10-year average nonwithholding revenues’ share of total general funds. Revenues from the Fiscal Responsibility Fund may only be appropriated in the second following fiscal year to PAYGO capital projects for public school construction, public school capital improvement projects, capital projects at public community colleges, and capital projects at four-year public institutions of higher education. The bill also specifies it is the State’s goal that 10.0 percent of estimated general fund revenues in each fiscal year be retained in the Revenue Stabilization Account.

Helpful Links

Pew: When to Use State Rainy Day Funds

Link to the Pew report

Report on Revenue Volatility and Approaches to Reduce Risk to the State Budget

Prior Conduit Street coverage on Maryland’s efforts to address economic volatility

House Bill 503: State Budget – Appropriations – Income Tax Revenue Estimate Cap and Revenue Stabilization Account

DLS 90 Day Report: Education Funding

The Department of Legislative Services (DLS) has released its annual summary of the legislative session, The 90 Day Report – A Review of the 2017 Legislative SessionThe report is divided into 12 parts, each dealing with a major policy area. It also includes information relating to the final operating and capital budgets, including aid to local governments – and a breakdown of aid to each county. 

County level detail of state aid is available here.

DLS lists “Direct Aid” to counties in two groups: Primary and Secondary Education, and all other aid programs. A full breakdown of all programs is available here: Total State Aid to Local Governments (Exhibit A-3.5)

This blog post directs readers to sections of the 90 Day Report which describe the education programs.

From Part L, Education of the Report:

State aid for primary and secondary education increases by $61.1 million in fiscal 2018 to $6.4 billion, 1.0 % more than fiscal 2017 aid. State aid provided directly to the local boards of education increases by $113.6 million, or 2.1%, while retirement aid decreases by $52.5 million, or 6.7%. Fiscal 2017 to 2018 changes in major State education aid programs are shown in Exhibit L-1.

The foundation program totals $3.0 billion in fiscal 2018, an increase of $43.3 million over fiscal 2017, or 1.5%. This increase is attributable to enrollment growth of 0.8% (6,658 full-time equivalent (FTE) students) and a 0.7% increase in the per pupil foundation amount due to inflation. The increase in the per pupil foundation amount brought it from $6,964 per pupil in fiscal 2017 to $7,012 per pupil in fiscal 2018.

Aside from the foundation program, the largest single increase is $21.7 million for Limited English Proficiency.

The County level detail begins with a list of aid provided through primary and secondary education programs. The Primary and Secondary Education section of Part A provides detailed descriptions, history and funding amounts for public school programs, of which there are many:

  • Foundation Program ($3.0 billion),
  • Net Taxable Income Grants ($49.2 million),
  • Declining Enrollment and Tax Increment Financing Grants ($17.6 million),
  • Geographic Cost of Education Index ($139.1 million),
  • Compensatory Education Program ($1.3 billion),
  • public special education programs ($284.9 million),
  • funding for nonpublic special education placements ($123.6 million),
  • regular student transportation services ($250.6 million),
  • special student transportation services ($25.7 million),
  • limited English proficiency grants ($248.7 million),
  • Bridge to Excellence in Public Schools Act Guaranteed Tax Base Program ($50.3 million),
  • Public School Opportunities Enhancement Program ($2.5 million),*
  • Robotics Grant Program ($250,000),*
  • Next Generation Scholars of Maryland Program ($4.7 million),*
  • Early College Innovative Fund ($300,000),*
  • Aging Schools Program ($6.1 million),
  • Judy Hoyer and Head Start Programs ($12.4 million),
  • Infants and Toddlers Program ($10.4 million),
  • Teacher Induction, Retention, and Advancement Pilot Program ($2.1 million),
  • Governor’s Teacher Excellence Award Program ($96,000),
  • Food and Nutrition Services ($11.2 million),
  • Adult Education Programs ($8 million),
  • School-based Health Centers ($2.6 million),
  • Healthy Families/Home Visits Program ($4.6 million),
  • Prekindergarten funding ($8.0 million),
  • Prekindergarten supplemental grants ($10.9 million), and
  • Teachers’ retirement payments ($734.5 million).

*Governor’s proposed budget did not fund these programs, but the General Assembly restored them.

Governor Hogan provided a supplemental budget which provided additional education aid to school systems experiencing declining enrollment, and those providing prekindergarten. From page A-22:

On March 27, 2017, Governor Hogan provided a supplemental budget that included $28.2 million in education aid to provide grants to certain [local education agencies, or] LEAs, all of which was contingent on the enactment of House Bill 684. As directed under the bill, this funding is provided in two parts: (1) enrollment based supplemental grants and (2) prekindergarten supplemental grants.

An LEA is eligible for an enrollment based supplemental grant if it has declining enrollment, as determined by the LEA’s most recent prior three-year moving average FTE exceeding its FTE in the previous school year. In fiscal 2018, the eligible LEAs include Baltimore City and Allegany, Calvert, Carroll, Cecil, Garrett, Harford, Kent, Queen Anne’s, and Talbot counties. The supplemental budget provides $17.2 million for these grants.

An LEA is eligible for a prekindergarten supplemental grant based on it offering a full-day public prekindergarten program for all four-year olds whose parents enroll them. In fiscal 2018, the eligible LEAs include Baltimore City and Garrett, Kent, and Somerset counties. The supplemental budget includes $10.9 million for these grants.

From page A-79 on Teacher Retirement:

House Bill 152 (Ch. 23), the Budget Reconciliation and Financing Act (BRFA) of 2017, repeals the requirement, for fiscal 2018 only, that the Governor include an appropriation to the State Retirement and Pension System trust fund equal to one-half of the amount by which the unappropriated general fund surplus exceeds $10.0 million in the second preceding fiscal year, up to a maximum of $50.0 million. State retirement aid to local jurisdictions is reduced by a total of $37.7 million in fiscal 2018: $35.6 million for public schools; $1.5 million for community colleges; and $0.6 million for libraries. These differences are shown by county in Exhibit A-3.2.

Also, House Bill 1109 (Ch. 5) relieves county boards of education from their fiscal 2017 obligation to pay $19.7 million of their share of the employer normal cost for their employees who are members of the Teachers’ Retirement System or Teachers’ Pension System. This measure, which is accounted for in the budget, effectively increases State retirement aid by $19.7 million in fiscal 2017.

 

Deeper in the Report, DLS further discusses House Bill 1109Exhibit C-1 shows the amount that each local school system is relieved of paying in fiscal 2017.

 

More information on Education funding is available in Part L, Education.

DLS 90 Day Report: Local Aid

The Department of Legislative Services (DLS) has released its annual summary of the legislative session, The 90 Day Report – A Review of the 2017 Legislative SessionThe report is divided into 12 parts, each dealing with a major policy area. It also includes information relating to the final operating and capital budgets, including aid to local governments – and a breakdown of aid to each county. 

County level detail of state aid is available here.

DLS lists “Direct Aid” to counties in two groups: Primary and Secondary Education, and all other aid programs. A full breakdown of all programs is available here: Total State Aid to Local Governments (Exhibit A-3.5)

This blog post directs readers to sections of the 90 Day Report which describe all other aid programs.

Libraries

This item includes the Library Formula and Library Network programs. The Report discusses funding for Local Libraries, including the Library Aid Program, for which the State funds 40 percent and counties fund 60 percent:

The State/local share of the minimum program varies by county depending on local wealth. The per resident amount is set at $15.00 for fiscal 2018 and is scheduled to increase to $16.70 annually, beginning in fiscal 2022. Fiscal 2018 funding totals $37.7 million, a $1.3 million increase compared to fiscal 2017. In addition, Baltimore City will receive $3.0 million to support expanded operations throughout the library system.

The State also provides funds through the Library Network program to libraries designated as resource centers and regional resource centers.

Community Colleges

This item includes the Community College Formula (Cade), Grants for English as a Second Language (ESOL) Programs, Optional Retirement, Small College Grants, and Other Community College Aid.

The Report discusses community colleges, which receive $235.2 million in fiscal 2018 through the Senator John A. Cade Formula, an increase of $779,600 over fiscal 2017 funding. In addition, the budget includes $4 million for one-time supplemental grants, to be divided among all 16 community colleges based on Cade funding formula-eligible enrollment. Also,

State funding in fiscal 2018 will total $4.1 million for the small college grants and $600,000 for the Allegany/Garrett counties unrestricted grants. Senate Bill 521 (passed) increases unrestricted grants to small colleges by approximately $1.7 million annually, beginning in fiscal 2019. Funding for statewide and regional programs will total $6.4 million. The English as a Second Language Program will receive $5.5 million, nearly level with the prior year.

Health Formula Grant

Local health departments receive $51.1 million, which level-funds the departments at fiscal 2017 levels, and provides an additional $1.6 million for increases in contractual health insurance costs in certain counties.

Transportation

Transportation aid listed in DLS’ county breakdowns includes highway user revenues to both the county and its municipalities, special transportation grants to both the county and its municipalities, elderly /disabled transportation grants, and paratransit grants.

In highway user revenues (HUR), $140.8 million (7.7% of HUR) is distributed to Baltimore City; $27.4 million (1.5%) is distributed to counties; and $7.3 million (0.4%) is distributed to municipalities, for a total of $175.5 million. The budget also provides special transportation grants to counties and municipalities of $38.4 million – $5.5 million for Baltimore City, $12.8 million for counties, and $20.1 million for municipalities. In addition, local governments receive $4.3 million in elderly /disabled transportation grants, and $1.7 million in paratransit grants.

Additional information on local transportation aid is available within the Report here.

Police and Public Safety

Police and public safety aid listed in DLS’ county breakdowns includes aid provided to municipalities, as well as the county.

The State fiscal 2018 budget level funds the police aid formula at the fiscal 2017 level of $73.7 million. In addition, State funding for targeted public safety grants will total $26.6 million in fiscal 2018. The Report details a handful of public safety grant programs available to local governments, including:

  • The Internet Crimes Against Children Task Force Fund, which funds grants for investigating Internet crimes against children ($2 million);
  • The Community Program Fund, which funds local government community and violence intervention programs ($500,000); and
  • The Vehicle Theft Prevention Fund, which enhances the prosecution and adjudication of vehicle theft crimes ($1.9 million).

This item may also include other grants, State’s Attorney’s Grants, and 9-1-1 Grants. 9-1-1 Emergency Systems Grants reimburse counties for improvements and enhancements to their 9-1-1 systems and are funded at $14.4 million.

Fire and Rescue Aid

Fire and rescue aid listed in DLS’ county breakdowns includes aid provided to municipalities, as well as the county. The Senator William H. Amoss Fire, Rescue, and Ambulance Fund, for local and volunteer fire, rescue, and ambulance services, is funded at $15 million.

Recreation and Natural Resources

According to the Report, the local share of Program Open Space (POS) funding changes in fiscal 2018:

Chapter 10 of 2016 altered the local share of POS funding beginning in fiscal 2018. The legislation allocated an additional $11.0 million to local funding for fiscal 2018. In future years, local funding through fiscal 2029 increases overall due to general fund appropriations to the transfer tax special fund (from which the local share of POS receives funding) representing reimbursement for prior transfers from the fund. In fiscal 2018, the POS formula allocates $37.2 million to the counties, which is an increase of $15.5 million over the fiscal 2017 amount. In addition, Baltimore City will receive $3.5 million in special POS funding.

The Report further details Program Open Space funding here.

Also, $7 million is included for the Department of the Environment to provide grants to local governments to provide enhanced nutrient removal at wastewater treatment facilities.

Disparity Grants

Disparity grants were level-funded by the Governor, then partially restored for some counties by the General Assembly. From the Report:

Disparity grants were initiated to address the differences in the abilities of counties to raise revenues from the local income tax, which is one of the larger revenue sources for counties. Counties with per capita local income tax revenues less than 75.0% of the statewide average receive grants, assuming that all counties impose a 2.54% local tax rate. Chapter 487 of 2009 capped each county’s funding under the program at the fiscal 2010 level. Chapter 425 further modified the program in order to provide a floor funding level in conjunction with the fiscal 2010 cap for an eligible county based on the income tax rate of that county. Beginning in fiscal 2014, an eligible county or Baltimore City may receive no more than the amount distributed in fiscal 2010 or a minimum of (1) 20.0% of the total grant if the local income tax rate is at least 2.8% but less than 3.0%; (2) 40.0% of the total grant if the rate is at least 3.0% but less than 3.2%; or (3) 60.0% of the total grant if the rate is set at 3.2%. The fiscal 2017 budget included $136.7 million in disparity grant funding; however, the Board of Public Works reduced total disparity grant funding to $132.8 million for fiscal 2017.

… Chapter 738 of 2016 altered the calculation of the Disparity Grant program for counties with a local income tax rate of 3.2% by increasing the minimum grant amount (funding floor) to 67.5% of the formula calculation in both fiscal 2018 and 2019. However, House Bill 152, modifies the formula by lowering the minimum grant amount (funding floor) from 67.5% to 63.75% of the formula calculation for fiscal 2018. Due to this action, funding for disparity grants will total $138.8 million in fiscal 2018.

Teachers Retirement Supplemental Grant

Grants totalling $27.7 million are distributed annually to nine counties to help offset the impact of sharing teachers’ retirement costs with the counties.

Gaming Impact Aid

From the proceeds generated by video lottery terminals at video lottery facilities in the State, generally 5.5% is distributed to local governments in which a video lottery facility is operating. … In addition, 5.0% of table game revenues are distributed to local jurisdictions where a video lottery facility is located. Gaming impact grants total $91.4 million in fiscal 2018, an increase of $24.6 million, or 36.9%, over fiscal 2017 levels, due to the opening of a casino in Prince George’s County in December 2016.

 

Other Direct Aid

Other direct aid may include aid from other programs such as those listed below, which are described in the Report:

Through the Maryland Forest Service and Maryland Park Service – Payments in Lieu of Taxes (PILOT) Program, counties receive 15 percent of the net revenues derived from their state forest or park land – in fiscal 2018, Forest Service payments to local governments total $282,900 and Park Service payments to local governments total $2.6 million.

The Senior Citizen Activities Center Operating Fund, a grant program through the Department of Aging for senior citizen activities centers, receives $764,000.

The Strategic Demolition Fund provides funding to assist with demolition, land assembly, housing development or redevelopment, and revitalization. Funding is awarded on a competitive basis to local governments and community development organizations. It receives $25.6 million, but $22.1 million is targeted for Baltimore City.

DLS 90 Day Report: Operating Budget

The Department of Legislative Services (DLS) has released its annual summary of the legislative session, The 90 Day Report – A Review of the 2017 Legislative SessionThe report is divided into 12 parts, each dealing with a major policy area. It also includes information relating to the final operating and capital budgets, including aid to local governments – and a breakdown of aid to each county. 

County level detail of state aid is available here.

This blog post provides links from the operating budget section which impact local governments.

DLS reports that State Aid to Local Governments totals $7.5 billion in fiscal 2018. However, $5.7 billion of this aid goes to public schools, $799.4 million to retirement payments, and $273.1 million to community colleges. Of this total, $694.2 million goes to county and municipal governments.

In order to balance the operating budget with revenues coming in under projections, the approved fiscal 2018 budget flat-funded many programs, including those serving counties. From page A-19 of the Report on the Budget Reconciliation and Financing Act, or BRFA of 2017:

The BRFA of 2017 includes several provisions that implement cost control and mandate relief; primarily in fiscal 2018. Specifically, the legislation …. reduces the fiscal 2018 mandated funding level for local jurisdictions under the Core Public Health Services and the State Aid for Police Protection programs to the fiscal 2017 level. ….

Related to the disparity grant, the BRFA of 2017 reduces the minimum grant amount from 67.5% to 63.75% of the disparity grant calculation provided, in fiscal 2018 only, for counties with a tax rate of at least 3.2%.

Related to MDOT, the BRFA of 2017 prohibits, for years beyond the budget request year, the inclusion of transportation grants to local governments in the Consolidated Transportation Program and the withholding or reserving of funds in the Transportation Trust Fund forecast for grants to local governments for roads and highways.

From page A-20, Provisions Affecting Local Government:

The BRFA of 2017 includes a provision that allocates a portion of the admissions and amusement tax revenue accruing to the Special Fund for the Preservation of Cultural Arts to a grant for the Arts Council of Anne Arundel County beginning in fiscal 2019. Related to Baltimore City Public Schools (BCPS), the legislation requires $4.6 million in excess Baltimore City contributions to the Baltimore City Public School Construction Financing Fund to be credited to BCPS to provide a portion of its required contribution in fiscal 2018 instead of the Comptroller intercepting State education aid and expresses the intent that this provision would only apply in fiscal 2018. The legislation requires a quarterly report on the Baltimore City Public School System structural deficit in fiscal 2018, 2019, and 2020. Finally, the legislation authorizes, for fiscal 2018 only, Baltimore City to use its HUR to pay for students to ride MTA buses and prohibits MTA from charging Baltimore City more than a specified amount for this service.

Under the Selected Budgetary Initiatives and Enhancements section, the Report summarizes funding appropriated this session to address Heroin/Opioid Addiction:

The fiscal 2018 allowance, as introduced, contained approximately $13.5 million in funding for programs specifically tied to the heroin and opioid crisis. The majority of this funding is carryover from prior years and is based on the recommendations of the Governor’s Heroin and Opioid Emergency Task Force. New funding appropriated this session, included (1) a $2.0 million deficiency appropriation, which is also included in fiscal 2018, to fund residential treatment services for court-ordered individuals ($1.5 million) and the Opioid Operational Command Center ($0.5 million); and (2) $1.9 million in new special and federal funding for the Prescription Drug Monitoring Program. The General Assembly added language to the budget bill restricting an additional $750,000 for a pilot study regarding management of opioid-related pain medication.

Supplemental Budget No. 2 included another $10.0 million in general funds for additional programming to combat the heroin and opioid epidemic, in response to the Governor’s declaration of a State of Emergency on March 1, 2017. Language included in the supplemental item provided specific purposes for which the funding may be used, authorized the Governor’s Inter-Agency Heroin and Opioid Coordinating Council to distribute the funding, and required the council to report to the General Assembly on a quarterly basis on how the funds have been used. The General Assembly added additional language that restricted the funding decisions based on the provisions of either House Bill 1329/Senate Bill 967 (both passed) and required DHMH to distribute the funds, contingent upon the enactment of those bills.

Additional information is included within the Report on heroin and opioid activity during the 2017 session here and here.

 

 

DLS 90 Day Report: Capital Budget

The Department of Legislative Services (DLS) has released its annual summary of the legislative session, The 90 Day Report – A Review of the 2017 Legislative SessionThe report is divided into 12 parts, each dealing with a major policy area. It also includes information relating to the final operating and capital budgets, including aid to local governments. 

Links to sections on the Capital Budget and relevant portions impacting local governments are provided below.

Capital Budget

From page A-63 on Revenue Bonds for the Biological Nutrient Removal (BNR) Program:

A significant feature of the fiscal 2018 capital budget is a change in the funding mechanism for the Biological Nutrient Removal (BNR) Program. In prior years, grants to local governments for upgrades of wastewater treatment plants to the BNR standard were funded with general obligation bonds. A provision in the BRFA of 2017 authorizes the use of up to $60 million of tax-supported revenue bonds from the Bay Restoration Fund (BRF) to fund BNR projects, while House Bill 384 (passed) permanently expands the allowable uses of the BRF to include BNR projects.

The fiscal 2018 capital budget bill de-authorizes $11 million of GO bonds authorized at the 2016 session for BNR projects and funds these projects and $49 million of new BNR projects from the revenue bond issuance.

The fiscal 2018 capital budget also includes $300 million of planned non-tax supported revenue bond issuances by MDE to further capitalize the Water Quality Revolving-Loan Fund and the Drinking Water Revolving Loan Fund to fund loans to local governments for various water quality and drinking water infrastructure projects. MDE will issue the debt over the next several years as project funding proposals from local governments dictate.

From page A-68:

Community colleges receive $59.6 million in fiscal 2018 GO bonds, or 14.9% of higher education funding. This includes $2.0 million of recycled GO bond funds leftover from prior local community college projects. Community college funding is also matched by $54.3 million in local support in fiscal 2018.

Exhibit L-2, Fiscal 2018 Public School Construction Funding (by Local Education Agency)

From page A-70 on School Construction:

The fiscal 2018 capital budget includes $347.5 million in GO bonds for public school construction. … The General Assembly also added language to the school construction authorization that, for fiscal 2018, IAC shall allocate 100% of the funds available for public school construction projects, including available contingency funds. Under the language, the IAC allocations are not subject to BPW approval and are deemed approved pursuant to State law. IAC made recommendations for 75% of the preliminary school construction allocation for fiscal 2018 in December 2016, which were approved by BPW on January 25, 2017. By March 1, 2017, IAC made recommendations for the allocation of 90% of the school construction allocation in the capital budget (which included the initial 75% approved by BPW). Following enactment of the capital budget bill, IAC will make recommendations for 100% of the funding available for fiscal 2018 school construction projects, and pursuant to this language, the IAC recommendations will be the final allocations not subject to BPW approval.

An additional $62.5 million is funded through the Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms established by Chapter 355 of 2015. … In the 2017 session the General Assembly increased the amount authorized for the program by $22.5 million for a total of $62.5 million. … While § 5-313 of the Education Article establishes a funding formula for the eligible counties, the additional $22.5 million is allocated outside of the statutory formula with specific allocations to the participating jurisdictions set forth in the MCCBL of 2017. Significant enrollment growth is defined as having full-time equivalent enrollment growth that exceeds 150% of the statewide average over the past five years, and significant relocatable classrooms means an average of at least 300 relocatable classrooms over the past five years. Currently, Anne Arundel, Baltimore, Howard, Montgomery, and Prince George’s counties are eligible.

Click here for information on school construction funding in Part L, Education.

From page A-70 on Aging Schools and Qualified Zone Academy Bond (QZAB) Programs

The capital budget bill provides $6.1 million in GO bonds for the Aging Schools Program allocated as grants to county boards of education as specified in § 5-206 of the Education Article. …

Public school construction funding is further supplemented with $4.823 million of QZABs authorized in House Bill 153. QZABs may be used in schools located in federal Enterprise or Empowerment Zones, or in schools in which 35% of the student population qualifies for FRPM. QZAB funds are distributed to local school systems through competitive grants including grants to the Breakthrough Center and public charter schools.

Frederick Proposed Budget Prioritizes Community Values, from Students to Seniors

Frederick County Executive Jan Gardner released her proposed fiscal 2018 budget, prioritizing community values: education, public safety and senior citizens. From the announcement:

With the input of thousands of county citizens, I have shaped a fiscally responsible budget that reflects our community values and priorities. The budget provides record funding to ensure top-notch education for our children, an investment in police, fire, corrections and 9-1-1 communications to keep our community safe, and services that create an enviable quality of life in which to live and grow our businesses.

The budget provides record funding for education at $272.3 million, including $3.8 million for maintenance of effort (MOE), along with an additional $10 million on top of that. The capital budget funds construction of Butterfly Ridge and Sugarloaf elementary schools, design for Rock Creek School and a feasibility study for Waverley Elementary school. Frederick Community College receives $700,000 for a 2 percent salary improvement for all employees. The Frederick County Public Libraries receive funds for increased staff to support the larger Walkersville Branch Library, scheduled to open in January 2018.

The budget reflects commitment to staffing public safety through the county’s Sheriff’s Office, Division of Fire and Rescue Services, 9-1-1 Communications and Emergency Management. The Sheriff’s Office receives funds for eight new Correctional Officer positions and four new sworn deputy positions, the latter to pick up responsibilities combating the growing opioid crisis. Fire and Rescue Service receives funds to add 12 new positions, and 9-1-1 Communications receives eight new positions.

Reflecting a high priority identified in the county’s citizen budget survey, the budget prioritizes services for senior citizens – a population expected to grow twice as fast in Frederick than the rest of the state. Funds are targeted for advancing the county’s Seniors First program, including support for Meals on Wheels, additional in-home health aides, and help to connect seniors to needed resources and services, such as navigating Medicare and Medicaid complexities.

The budget also provides an additional $345,000 from additional state transportation aid for basic materials to support the county’s infrastructure, which includes 1,300 miles of county roads and over 400 bridges and pipe structures. The capital budget funds preventive maintenance and pavement reconstruction of asphalt and tar and chip roads through the county’s Pavement Management Program, as well replacement of the bridge on Gas House Pike and several federally funded bridge deck replacements.

The General Fund budget grows by 3.9 percent, maintains the county’s AAA bond rating, and includes no tax rate increases. All employees receive a 2 percent cost of living adjustment, and 350 positions receive reclassifications.

Links

Fiscal Year 2018 Budget Message

FY2018 Proposed Budget