First Quarter Income Tax Distributions: Tax Reform Impacts Materialize

The Comptroller’s Office has released the tables of county-by-county breakdowns of the first quarter’s local income tax distributions. See them here.

From the Office’s statement:

The distribution totals $1,080.9 million for the counties, growth of 5.1% over last year (Table 2).

Withholding receipts for the first quarter grew 5.0% year over year.  Estimated payments increased 32.6%.  The large increase in estimated payments is likely the result of taxpayer reactions to expectations of a federal tax cut following the November 2016 election, as well as to the eventual passage of the Tax Cuts and Jobs Act.  Taxpayers who expected a federal tax cut would rationally shift income, to the extent they are able, out of tax year 2016 and into tax year 2017.  Some taxpayers may also have been expecting a cut to the capital gains tax rate, which did not materialize. They may now be taking gains from equities they were holding onto in case of a capital gains rate cut.  Also contributing to the growth in the first quarter distribution, the local tax percentage has increased from around 37.22% to around 37.26%.

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Know Your (Riparian) Rights! #MACoCon

Do you know your riparian rights?

Do you know what those even are?

Maryland has 3,190 miles of shoreline – and, with those miles of shoreline, come 3,190 miles of riparian rights. Join some of Maryland’s top attorneys at MACo’s Summer Conference, “Water, Water Everywhere,” to learn about how federal, state and local law all interplay to regulate shoreline improvements – and what counties can do to protect their most important water assets for everyone.

Like a Bridge Over Troubled Water: Know Your Water Law

Description: Maryland counties are rich with water, both in terms of waterfront access building-731207_1920and in sustainable water and wastewater infrastructure. Counties benefit from this — but along with these assets come great responsibilities and risks. Conflicts that arise over responsibilities for water-related assets cannot often be shrugged off as “water under the bridge,” but require proactive planning and protection. In this session, learn how counties depend upon the law to protect water-related assets, keep their water clean, and interplay with various federal and state laws. As an added bonus, attendees will finally find out what “riparian rights” actually are.

Speakers:

  • John Mattingly, Esquire, County Attorney’s Office for Calvert County
  • Lisa Ochsenhirt, Esquire, Attorney, AquaLaw PLC

Date/Time: Thursday, August 16, 2018; 3:30 pm – 4:30 pm

The MACo Summer Conference will be held August 15-18, 2018 at the Rowland Powell Convention Center in Ocean City, Maryland. This year the conference’s theme is “Water, Water Everywhere.”

Learn more about MACo’s Summer Conference:

Harris: No “Big Fan” Of Offshore Wind

wind-energy-2029621_1280U.S. Representative Andy Harris, who represents Maryland’s Eastern Shore, is seeking legislative action to require the National Oceanic and Atmospheric Administration (NOAA) to investigate potential consequences of Maryland’s burgeoning offshore wind. The study, which could take up to two years, is intended to allay concerns about adverse effects on marine life, commercial fishing and tourism, according to a report by Delmarva Now.

From that coverage:

Deepwater Wind and U.S. Wind received approval in 2017 to construct two wind turbine projects off Ocean City’s coast.

The projects represent a critical test for the future of offshore wind development in the United States. They are set to become the first, large-scale projects of their kind.

The Bureau of Ocean Energy Management assessed the environmental impacts of the projects in 2012, and concluded that they would pose “no reasonably foreseeable significant impacts.” Environmental advocacy groups do not support Harris’ measure, reports Delmarva Now.

Water plays a remarkable role in advancing our State’s progress in renewable energy generation. The “big fans” of offshore wind certainly know this well. Learn more about Maryland’s pioneering efforts on offshore wind from Deepwater Wind’s Chief Executive Officer, Jeffrey Grybowski, who will present on the panel, “Earth, Wind, Fire, WATER: Powering Your County’s Future,” at MACo’s Summer Conference on Thursday, August 16, 2018, from 2 pm to 3 pm.

The MACo Summer Conference will be held August 15-18, 2018 at the Rowland Powell Convention Center in Ocean City, Maryland. The conference’s theme is “Water, Water Everywhere.”

Learn more about MACo’s Summer Conference:

Charles Adopts Budget, Invests In Education & Public Safety

The Charles County Commissioners adopted a balanced General Fund budget of download$404,659,200 for fiscal 2019 on May 15. The budget marks a 3.4 percent increase over fiscal 2018. This is the fifth consecutive year in which the County has balanced the budget without increasing tax rates. According to the County’s press release:

The adopted budget protects core services, invests in education and public safety priorities, and incorporates efficiencies in county operations.

Commissioner President Peter F. Murphy stated:

I am pleased that the Board of Commissioners has been able to hold the line on the tax rates while continuing to deliver the high-quality services our community expects and deserves. Our fiscally-responsible choices have resulted in a balanced budget that will be sustainable in the future.

Budget highlights include:

  • $6.49 million increase for Charles County Public Schools
  • $2.96 million increase for the Sheriff’s Office
  •  $2.84 million increase for County Government operations, to fund employees salary increases and hire staff to open the new Waldorf Senior and Recreational Facility
  • Real property tax rate remains $1.141 with an additional $0.064 for Fire and Rescue per $100 of assessed value
  • $457.5 million allocated for the five-year capital improvement program (fiscal years 2019-23) to pay for enhanced school security, school construction, upgrading the county’s 9-1-1 system and investments in new or improved assets including roads, parks, water and sewer infrastructure, and other public facilities

Click here to read about the fiscal 2019 budget proposal.

Baltimore County Adopts $3.3 Billion Budget, No New Taxes

The Baltimore County Council approved a $3.3 billion budget on Thursday for fiscal 2019, which begins July 1. The approved budget includes no tax increases, although Fred Homan, the county administrative officer and acting county executive, indicated that water and sewer rates would have to be increased by at least 12.5 percent.

Pamela Wood reports on the council meeting for The Baltimore SunIn particular, she mentions that Council Member Wade Kach tried, unsuccessfully, to lower the property tax rate:

The budget keeps the rates for property taxes and local income tax the same as they have been for more than 20 years — though Councilman Wade Kach attempted to make a small cut to the property tax, frustrating Democrats who blocked the maneuver. Councilwoman Cathy Bevins accused Kach of “absolute grandstanding.”

The Council voted 7-0 at the same meeting to name Don Mohler as the new county executive. Mohler was the late County Executive Kevin Kamenetz’s chief of staff.

Mohler served for Kamenetz for eight years, and as communications director for former County Executive Jim Smith for eight years, as well. He worked in education for 30 years, as a teacher, guidance counselor, principal and administrator.

Wood reports:

Several mentioned Mohler in particular as someone who could carry out Kamenetz’s vision without using the position for personal or political gain.

Read her article here.

See prior coverage on Baltimore County’s budget here.

As proposed, the late County Executive Kamenetz’s budget funded:

  • a 3 percent cost of living adjustment for employees, effective
    next January
  • 22 new social workers, 23 new counselors and 18 new school psychologists in Baltimore County Public Schools, plus additional pupil personnel workers, health assistants, and bus attendants
  • 19 more police School Resource Officers, increasing the County’s total to 84 officers
  • $979,000 for the first year of Baltimore County College Promise, which provides full tuition and fees to Baltimore County Community College for qualifying students
  • Over $1.8 million toward rat abatement
  • An increase of 7.4 percent to volunteer fire companies
  • nearly $27 million to maintain and improve water and sewer infrastructure and reduce water main breaks and sewage spills
  • $3.9 million to support arts, humanities and cultural organizations in Baltimore County and the region

U.S. Senate Committee Passes Water Resource Authorization Bill

The U.S. Senate Environment and Public Works Committee has passed a version of the Water Resource Development Act (WRDA) authorization bill, the Water Resources Development Act of 2018 (H.R. 8). The U.S. House Committee on Transportation and Infrastructure is scheduled to mark up the bill tomorrow.

NACo provides information on the bill. 

From the letter to the House advocating for WRDA, sent by NACo, National Governors Association, National League of Cities, United States Conference of Mayors, and National Conference of State Legislatures:

WRDA is critical in helping to protect, maintain and further develop our water infrastructure systems including, ports, waterways, and clean and safe drinking water. It provides states and local governments with added stability and certainty to meet water infrastructure needs while also supporting the safety, environmental protection and economic development of our communities. Following a seven – year gap in the passage of WRDA, Congress was able to enact both the Water Resources Reform and Development Act of 2014 (WRRDA) and the Water Infrastructure Improvements for the Nation Act of 2016 (WIIN) on a bipartisan basis. We strongly urge Congress to stay this course and approve bipartisan WRDA legislation in 2018, and continue to authorize WRDA every two years moving forward.

The Senate version of the bill includes extensions to the Water Infrastructure Finance and Innovation Act (WIFIA), which provides low-interest loans to local governments and utilities to repair existing water and wastewater infrastructure. Route Fifty reports:

The version of the bill the Senate committee approved includes language that would effectively extend WIFIA lending terms to another set of waterworks programs known as the drinking water and clean water state revolving funds.

With the revolving funds, EPA awards “capitalization grants” to states. States contribute a 20 percent match, and then use the money to provide low-cost loans and other financing assistance for drinking water and wastewater projects. The funds are one of the primary ways the federal government provides support for local water infrastructure across the U.S.

The extension to WIFIA was originally proposed in the Securing Required Funding for Water Infrastructure Now Act.

The National Rural Water Association supports the expansion, which it says will make it easier for rural communities to access the funds. The American Water Works Association, the Association of Metropolitan Water Agencies, and the Water Environment Federation oppose the move, however. They argue:

…it would undermine the purpose and ability of WIFIA to effectively leverage limited federal dollars to support major water and wastewater infrastructure investments.

Helpful Links

SC18 Brochure Cover - final
Like water? Join us for MACo’s Summer Conference, “Water, Water Everywhere,” August 15-18, 2018 at the Ocean City Convention Center!

NACo Coverage

NACo’s WRDA letters to the Senate

NACo’s WRDA letter to the House

Route Fifty: Senate Panel Passes Water Bill That Would Rework Lending Program

Route Fifty: Tension Bubbles Up Over Water Infrastructure Bill in Senate

Prior Conduit Street coverage

 

NTSB: Require Seat Belts in New School Buses

The National Transportation Safety Board (NTSB) wants all new school buses to have seat belts.

The independent federal agency, charged with determining the probable cause of transportation accidents, released its findings Tuesday from its special investigation into school bus safety issues. The investigation focused on the November 2016 crash involving a Baltimore City school bus and a transit bus, as well as a school bus crash that occurred that same month in Chattanooga, Tennessee. The two crashes injured 37 people and killed 12.

The NTSB found that, although school busses are “the safest vehicles on the road, and one of the safest modes of transportation overall,” certain enhancements could “close gaps in school bus safety.” These enhancements include lap/shoulder seat belts and technological improvements such as electronic stability control, automatic emergency braking, and event data recorders.

However, insofar as the two investigated crashes are concerned, poor driver oversight was the key issue:

The report cites the overall safety of school buses yet notes a similarity in the two fatal accidents investigated.  The lack of driver oversight which was found to be causal in both accidents. The NTSB found this lack of oversight by not only the school districts in Baltimore and Chattanooga, but also by the motor carriers under contract to the school districts to provide student transportation, which employed the drivers in the two crashes.

In both cases, school bus drivers continued to operate school buses unsafely, with no remedial action taken, even when driver safety issues were known. In addition to lack of oversight, the Baltimore report focused on medically unfit school bus drivers, and commercial driver license fraud.

NTSB issued safety recommendations to the State of Maryland, Maryland State Department of Education, Maryland Motor Vehicle Administration, Baltimore City Public Schools, and Maryland School Bus Contractors Association, as well as to a number of other public and private entities.

The NTSB recommended that 42 states (including Maryland), the District of Columbia, and Puerto Rico adopt legislation requiring lap/shoulder belts on new, large school buses. It recommended that Florida, Louisiana, New Jersey, and New York amend their existing statutes requiring lap-only belts to require lap and shoulder belts, instead.

In the past, MACo has weighed in on proposed legislation requiring the retrofit of existing school buses with seat belts, citing cost concerns. The NTSB recommendation only applies to newly purchased school buses moving forward.

Helpful Links

NTSB News Release, “Lack of Driver Oversight Key Issue in School Bus Safety Special Investigation Report”

NTSB: School Bus Safety

NTSB, Special Investigation Report [Synopsis], School Bus Transportation Safety, Baltimore, Maryland, November 1, 2016, and Chattanooga, Tennessee, November 21, 2016

Property Tax Relief Available To Flood Victims

Last week’s significant rainfall and flooding may have long-term, adverse effects on Maryland residents and their properties – and that may translate to lower county revenues. If property damage results in lower property assessments, counties’ property tax base could potentially take a hit.sand-bags-3157445_1920

Of course, counties appreciate and agree that assessments should be based upon the actual value of properties. That is why they are partners with the State Department of Assessments and Taxation (SDAT), which has created a process to allow residents to contact them for reassessments if their real property has suffered damage from the severe weather. Residents can fill out the Department’s form, available here, and email it to their local SDAT assessment office – which they can find here.

SDAT announces:

SDAT offices have recently been in contact with county governments and other local organizations to offer any assistance and coordination necessary. In the coming weeks, SDAT’s assessors will begin visiting areas impacted by the severe weather, particularly in Washington and Frederick Counties, to locate and identify damaged property. When a decrease in value is confirmed by an assessor—either from an exterior inspection or from a resident submitting the attached application—the new real property assessment will be sent to the County Finance Office and a new tax bill may be issued. If a property owner has already paid their tax bill, a prorated abatement will be issued. If the extent of damage is not clear from an exterior inspection, the attached application will be delivered to the property owner for them to complete and send back. …

SDAT will continue to be in contact with state and local governments to ensure that residents who may qualify for a reduced assessment are aware of this application.

 

Wicomico Schools Continue Push For Pre-K Funding

The Wicomico Board of Education (BOE) is asking Wicomico County for an additional $5.7 million above the $43.7 million already included at maintenance of effort (MOE), to “establish universal pre-K, improve the graduation rate, and attract and retain a strong workforce,” according to The Dispatch.

School Superintendent Donna Hanlin pointed out to the County Council at a work session this week that nearly 76 percent of students in Wicomico County are considered an at-risk population. Universal pre-K would benefit a significantly large part of the community, she argued. From The Dispatch:

“We need to be working with these students as early as we possibly can,” she said.

School officials said they are asking for $1.3 million in the coming fiscal year to launch the first phase of its pre-K initiative within existing facility space. In the future, they said the school system would seek an additional $3.2 million to install modular buildings that will house pre-K classes. ….

Wednesday’s work session with the school board and other departments was just one of many scheduled in the coming week. The fiscal year 2019 budget will be adopted in June.

In County Executive Bob Culver’s proposed fiscal 2019 budget introduction, he states:

The recurring BOE request of $5,704,383 is over MOE and can only be funded through a property mil rate increase of 8.46 cents or by cutting other core services by that amount which isn’t feasible.

The $3,200,000 request for Pre K modular buildings should not be financed because of the likely short term use (certainly less than a 20‐year amortization period). Therefore, it requires use of fund balance or additional property taxes (another 5.35 cents). Increasing the use of fund balance isn’t a recommended course of action.

Funding the entire BOE request through property taxes would require a 13.81 cent increase (14.7%) in our mil rate elevating it to $1.078. That would result in the fifth highest mil rate in the State levied on the 18th lowest property base.

The proposed budget of $151.4 million focuses on “Wicomico County’s core service needs: Public safety and health, education and infrastructure.” It proposes no property tax rate increases, but does tap into fund balance. General Fund debt service for fiscal 2019 is $14.7 million, or 10.4% of new General Fund revenue.  General Fund proposed appropriations include 41 percent for education, 36 percent for public safety and health, and 11 percent for general government services. The budget proposes that eligible employees receive a 2 percent salary increase.

Frederick Adopts Balanced Budget, Delivers on Strategic Priorities

The Frederick County Council approved the County’s budget on Tuesday, days before the County experienced severely compromising floodingFrederick

County Executive Jan Gardner’s proposed budget aligns with the jurisdiction’s “Strategic Priorities,” focusing on “good government, exceptional public schools, a vibrant economy with a diversity of jobs,” and meeting “community needs through public safety, health, transportation and general well-being.” As proposed and as approved, the budget includes no tax rate increases. The General Fund budget increases by 4.58 percent.

With Frederick County Public Schools teaching nearly 800 additional students this past year, the County is providing $5 million in mandated maintenance of effort, as well as an additional $7.2 million above that for raises for teachers and staff. The capital budget reflects a nearly $225 million investment in school construction over four years.

County employees receive a step increase.

The budget also accommodates for a number of new initiatives. These include dedication of 1.5 percent of recordation tax revenue to the Housing Initiative Fund, which leverages federal tax credit programs to support workforce and affordable housing; start-up funds to implement a public private partnership to address the opioid epidemic through treatment and a new detox center; and the development of a new business innovation center, ROOT, which opened its doors about a month ago.