Governor Larry Hogan to Release Second Supplemental Budget

Governor Larry Hogan announced Sunday that the administration has reached an agreement with state leaders and is proposing over $23 million dollars of state funding for Baltimore City Public Schools, with another $5 million for several other counties.

According to a press release,

Governor Larry Hogan today announced that his administration has reached an agreement with leaders in the Maryland General Assembly and Baltimore City to provide additional state funding to Baltimore City Public Schools, contingent upon new fiscal accountability requirements for the school system.

The governor will submit a second supplemental budget, which will include $28.2 million in additional funding for K-12 public schools in Allegany ($793,000), Calvert ($240,000), Carroll ($1.6 million), Cecil ($190,000), Garrett ($456,000), Harford ($356,000), Kent ($215,000), Queen Anne’s ($22,000), Somerset ($455,000), and Talbot ($133,000) Counties, and Baltimore City ($23.7 million). The supplemental budget will be submitted to the legislature on Monday, March 27.

The release of funds for Baltimore City public schools is contingent on the passage of legislation requiring greater fiscal accountability, including a comprehensive audit of the city school system performed by an independent accountant in consultation with the Maryland Department of Budget and Management. These accountability requirements are the direct result of extensive discussions and negotiations by the Hogan administration, the legislature, Baltimore City Mayor Catherine Pugh, and Baltimore City School Superintendent Dr. Sonja Santelises.

Governor Hogan submitted his first supplemental budget on March 24, which provided additional funding to combat the state’s heroin epidemic, support education and economic development initiatives, and address public safety needs.

The second supplemental budget provides a temporary remedy to address “cliff effect” funding decreases due to declining enrollment and/or rising property values. MACo supports HB  684 / SB 1024 – State Grants for Education Aid, which would provide additional grant funding for counties facing decreased state education funding.

Useful Links

Governor’s Press Release

Previous Conduit Street Coverage: Why Do Five Jurisdictions Lose $45M In Education Funds?

MACo Testimony on HB 684

Previous Conduit Street Coverage: Hogan Proposes Supplemental Budget: Funds Included For Police, Colleges

Pugh Vetoes $15 Minimum Wage Bill

Mayor Catherine Pugh vetoed legislation Friday that would have raised the minimum wage in Baltimore to $15 by 2022, leaving the measure’s future in question.

The Baltimore City Council — which next meets on April 3 — would need 12 of its 15 members to vote to overturn the veto. On Friday, the 12-member coalition that originally backed the higher wage began to disband.

From The Baltimore Sun,

Councilman Edward Reisinger of South Baltimore said although he voted to pass the bill, he would not support a veto override. Over the next seven years, the Pugh administration estimated the bill would cost the city $116 million, including the expense of paying city workers a higher minimum wage.

Reisinger said the cost is especially concerning given the city’s outstanding fiscal challenges: a $20 million deficit, a $130 million schools budget shortfall and new spending obligations associated with the U.S. Department of Justice’s police consent decree.

“The mayor has some very persuasive arguments,” Reisinger said. “Baltimore City doesn’t have a money tree.”

Pugh also was concerned that requiring employers in the city to pay a higher minimum wage could send them fleeing to surrounding jurisdictions. That would worsen unemployment in the city and make it harder for low-skilled workers and ex-offenders to get jobs, she said.

She emphasized that Baltimore’s minimum wage is increasing along side the rate statewide. The rate in Maryland will rise to $9.25 on July 1 and $10.10 a year later.

“I believe it is in the best interest of the city that we follow the state,” Pugh said.

The City Council voted 11-3 to pass the minimum wage bill Monday. Councilman Brandon Scott also supported the measure but didn’t cast a vote because he was traveling overseas.

The pro-business Greater Baltimore Committee’s president, Don Fry, praised Pugh’s decision. The measure “threatened jobs, made Baltimore an island surrounded by counties with lower business costs and hit the city budget with millions of dollars in higher labor costs it simply cannot afford.”

“The decision was no doubt a difficult one for the mayor,” Fry said in a statement. “But this shows real leadership as she stayed true to the priority that Baltimore must remain competitive for growth and jobs.”

Advocates pushing for the higher wage decried Pugh’s action as a broken promise.

“We are deeply upset that Mayor Pugh has broken her campaign pledge by vetoing this legislation, which promises to give tens of thousands of workers higher wages and the opportunity to lead self-sufficient lives,” said Ricarra Jones, chairwoman of the Fight for $15 Baltimore Coalition, in a statement.

“As a state senator, Mayor Pugh was a strong supporter of a livable minimum wage and explicitly promised to sign the Baltimore wage bill as mayor. Today, she has made clear that promises are made to be broken. The voters will remember her turn-around.”

Jones noted that during last year’s campaign, Pugh said she would support a $15 minimum wage bill as mayor on a union questionnaire.

“Yes, I would. I am aware of the current initiative to raise the minimum wage in the City Council to $15 per hour and when it reaches my desk I will sign it,” Pugh wrote.

Asked Friday about her response to the questionnaire, Pugh said she has been faced with significant unanticipated expenses since taking office in December, including the schools budget deficit.

“I don’t think they make you swear on the Bible,” Pugh said. “They ask you if you would support it, and I do support it. But you ask me as a chief executive officer of this city what I would do as it relates to the conditions of the city currently, and where we are economically, I have a right and responsibility to respond on behalf of all of the citizens of this city.”

Pugh noted that legislation to increase the minimum wage statewide is before the General Assembly.

“While it may not take place this year or next year, I will follow the lead of the state,” she said.

Read the full article for more information.

You’re Invited: Join Us for Our Weekly Legislative Update Call

Every Friday during the legislative session MACo will host a conference call that will update you on the Maryland General Assembly hot topics and bills that affect local governments. Join the conversation at 3:00 pm each week as MACo explores different topics and hosts guest speakers.

This week’s topic (March 24): General Issues Update

MACo Executive Director, Michael Sanderson will discuss a number of topics, including the proposed state budget, attorneys fees, water liens, pre-trial bail, and more. Call in to hear the latest news from the General Assembly!

Conference call information: 1.877.850.5007, passcode: 2690043#

We look forward to your participation! Submit your questions in advance by e-mailing Kevin Kinnally.

Bill to Offset Declining Enrollment Moving in Legislature

House Bill 684, “Education – Grant for Declining Education Aid,” has passed the full House and crossed over to the Senate. MACo supports HB 684, which would help to offset the sudden drop-off in education funding to jurisdictions with declining enrollment, ensuring school systems can offer equivalent courses and programs, even with fewer students.

The bill was amended to allow jurisdictions with declining enrollment average their student populations over three years, rather than account for single-year changes, and allow them to factor all-day pre-K student populations into total enrollment. The House Appropriations Committee also amended the bill to provide grant funding for three years instead of just for one year, as was originally proposed.

Five Jurisdictions–Baltimore City, Calvert County, Carroll County, Garrett County, and Talbot County–are slated to lose a combined $45M in state education funding in 2018. Baltimore City is the most deeply affected, with a $38m loss in year-to-year total state education funds.

From the MACo testimony,

Counties value public education as a high priority, and an essential service and benefit to the citizens and the economy. State Budgeting formulas and requirements complicate this commitment, especially because nearly all state education funding is distributed on a per-pupil basis, meaning that the more students a school system serves, the more funding it receives.

By contrast, when the number of students declines, schools can experience a sudden drop in funding. This dynamic can strain local budgets – reflecting the reality that not every dollar spent in a school system is truly a “variable cost.” A sudden drop in students across a county school system may mean some cost savings in bus transportation and meals service – but may not have any effect on “fixed costs,” which account for most system-wide expenditures on education and administration.

To learn more about Maryland’s school budgeting formula, read “Why do Five Jurisdictions Lose $45M in Education Funds?” on MACo’s Conduit Street Blog.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Legislation to Close Gap in Teachers’ Pensions Moving in House and Senate

A bill which addresses the shortfall in funding required to meet the portion of Maryland state teacher pension costs that exceed costs anticipated during the 2012 “pension shift” is on the move in the General Assembly. House Bill 1109 / Senate Bill 1001, “Teachers’ Retirement and Pension Systems – County Boards of Education Payments,” passed both the House and Senate and have now crossed over to be heard in the opposite chamber.

The actual normal costs of teacher pensions in fiscal year 2017 are approximately $19.7 million more than the amount that local school boards were estimated to provide in legislation passed by the General Assembly in 2012.

The additional funding required in fiscal year 2017 is mainly attributable to changes outside of the control of local school boards. At the same time, absorbing this additional cost in fiscal year 2017 could put pressure on school board budgets, and county governments who provide much of their funding.

The amendments allow the state to pay the difference in either FY 2018 or FY 2019.

MACo joined the Maryland Association of Boards of Education in supporting the bill.

Useful Links

MACo testimony on HB 1109 / SB 1001

For more on 2017 MACo legislation, visit the Legislative Database

Community College Collective Bargaining Bill Remains in Committee

Neither the Senate Finance Committee nor the House Appropriations Committee has taken action on a prescriptive, one-size-fits-all collective bargaining bill that would affect all Maryland community colleges. HB 871 / SB 652 failed to move prior to yesterday’s “crossover” deadline, and bills passed out from now on go to the Rules Committee of the second chamber, a procedural hurdle impeding their chances of final passage.

Counties oppose the one-size-fits-all approach of HB 871 / SB 652, which limits local decision-making. The move to collective bargaining outlined in this bill could create potentially unsustainable costs for counties, who provide substantial funding for community colleges throughout Maryland – especially since the legislation does not envision any added State support.

From the MACo testimony,

Despite counties’ role in supporting community colleges, this legislation would not provide any opportunity for county governments to participate in collective bargaining negotiations. The combination of these effects – State-imposed system and costs, no county participation in bargaining, and no additional State funding – is simply not affordable as a statewide county mandate and could present substantial budget difficulties.

MACo opposed identical legislation in past sessions of the General Assembly. Click here for previous Conduit Street coverage.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Local Collective Bargaining Mandate Misses “Crossover” Deadline

A bill that would require all counties to extend collective bargaining rights to all of their employees – except for supervisory, managerial, or confidential employees, or elected or appointed officials, has not moved out of the House Appropriations Committee. HB 1370 failed to move prior to yesterday’s “crossover” deadline, and bills passed out from now on go to the Rules Committee of the second chamber, a procedural hurdle impeding their chances of final passage.

MACo opposed the bill, as it mandates a prescriptive, one-size-fits-all design that would expand collective bargaining rights in a third of Maryland’s counties.

From the MACo testimony,

Maryland county governments vary in many ways. They come in different forms of government, including charter, commission, and code home rule. They are different sizes, ranging from less than two hundred employees to more than ten thousand. And, they have different levels of collective bargaining rights. Some authorize collective bargaining for all the employees described in HB 1370, some have it for public safety employees, and others do not currently have collective bargaining agreements.

Requiring even Maryland’s smallest county governments and any municipal governments in Maryland that have more than 20 employees to authorize collective bargaining to almost all their employees will create a new administrative burden, and could also create additional personnel costs. The low threshold and broad application of HB 1370 puts pressure on some of the state’s smallest jurisdictions, which may be least able to accommodate additional administration and costs.

Useful Links

2016 Bill: HB 736

Follow MACo’s advocacy efforts during the 2017 legislative session here.

Local Preemption Bill Dies in Committee

A bill that would prohibit counties and municipalities from increasing wages and benefits above state levels has died in the House Economic Matters Committee.

MACo opposed the one-size-fits-all approach of HB 317, which limits local decision-making. The preemption of local authority outlined in this bill would significantly undermine a local government’s ability to implement policies that reflect the diversity of local economies.

Useful Links

Previous Conduit Street Coverage: MACo, Counties Defend Autonomy On Labor Issues

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Sick Leave Legislation Heading to Conference Committee

Both the House and Senate have passed sick and safe leave legislation with veto proof majorities. The bills would require Maryland employers to provide paid sick and safe leave for many of their employees. However, since SB 230 and HB 1 are not identical, the differences are likely to be worked out in a conference committee in the coming days.

The bill would also require county governments to provide sick leave to all employees. While county governments generally provide generous benefits, at a much higher rate than the legislation would require, MACo opposed the legislation, raising concerns about the bill’s potential effects on provision of emergency and essential services and with the bill’s broad requirements for providing leave to part-time, seasonal, and contractual employees in the same manner as full-time employees.

Useful Links

MACo testimony on SB 230

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

House Committee Votes Down Gov. Hogan’s Redistricting Bill

The House Rules and Executive Nominations Committee (which has jurisdiction over constitutional amendments, regardless of the subject matter) today killed a flagship item on Governor Larry Hogan’s legislative agenda, turning down a measure to change the way legislative districts are drawn.

HB 385 proposes a constitutional amendment that, if approved by voters in the next general election, requires the appointment of a General Assembly and Congressional Legislative Redistricting and Apportionment Commission. The commission must divide the State into consecutively numbered legislative districts that conform to existing constitutional provisions and create as many congressional districts as there are representatives in Congress apportioned to Maryland.

The cross-file to the bill, SB 252, was heard by the Senate Education, Health, and Environmental Affairs Committee on March 3, 2017.

Follow MACo’s advocacy efforts during the 2017 legislative session here.