March 31 Deadline for “One Time” School Spending Designation Approaching

As counties and school boards start building their FY 2018 budgets, a state deadline for one-time cost approvals approaches. A MACo guide helps county officials navigate the process.
State funding laws intended to encourage education spending, may discourage it by complicating the structure of funding and requiring certain submissions on a timeline that mishmashes with county budget processes.

State “maintenance of effort” laws require a county to provide the same amount of education funding or more on a per-pupil basis each year. Maintenance of effort can discourage additional investment, especially during a faltering economic recovery, when future revenues are uncertain.

A legal provision called nonrecurring costs, however, allow county governments provide one-time school funding for one-time education costs without triggering perpetual mandates.

The hitch is: the deadline for submitting nonrecurring costs is this month – before many counties even begin budget negotiations.

Perhaps as a result of this process, on average fewer than eight counties per year take advantage of this education budgeting tool.

Not all education costs are annually recurring per-student costs. One-time education expenses might include costs to:

  • build new computer laboratories;
  • make technology enhancements;
  • start-up new instructional programs; or
  • purchase books for a school library

The mechanism for appropriately excluding these one-time education costs from the maintenance of effort calculation requires special approval. A county must submit an application to exclude certain costs to the State Board for their approval before March 31 of each year.Screenshot 2016-01-18 17.22.16

Data from the Maryland State Department of Education (MSDE) in 2014 revealed that on average fewer than eight counties per year take advantage of this budgeting tool. Learning this, MACo developed Non-Recurring Costs For County School Budgeting: A County Official’s Guide to the Process and Laws Behind the System.

In the Guide, MACo aims to improve the accessibility and use of the nonrecurring cost exclusion, covering:

  • How does a county apply to have nonrecurring costs approved?
  • What categories of costs can be considered as nonrecurring?
  • When does the school board need to agree with the request?
  • What requests have been approved and denied in recent years?

All the submission forms, statutes, regulations, and guideline documents relevant to this process are provided in appendices to the Guide.

For more information, read Non-Recurring Costs For County School Budgeting: A County Official’s Guide to the Process and Laws Behind the System.

Maryland “Fracking” Ban Looming as Likely

The Senate Committee on Education, Health, and Environmental Affairs has passed legislation to ban hydraulic fracturing (“fracking”) as a means of extraction in Maryland, setting the stage for a statewide ban on the practice. Governor Hogan’s announcement of his support late last week has triggered this new direction in the session-long debate.

From coverage in US News & World Report:

Throughout Maryland’s 2017 legislative session, there has been debate over whether to ban the drilling practice known as fracking indefinitely or to put another two-year moratorium in place.

The House passed a veto-proof majority bill on March 10 that would install a permanent statewide fracking ban. A House bill identical to one sponsored by state Sen. Robert “Bobby” Zirkin has cleared the Senate Education, Health and Environment Committee.

Because of Maryland Gov. Larry Hogan’s previous support for natural gas drilling if done safely, the Senate committee’s chair, Sen. Joan Carter Conway of Baltimore City, told reporters that, while she would support the ban, she did not think it was worth bringing to a floor vote without a veto-proof majority.

Conway’s committee voted 8-3 Wednesday to advance the bill to the Senate floor, making a floor vote possible as soon as this or early next week. According to legislators and activist groups, the ban has the needed majority support in the Senate.

Attorney Fee Legislation Stalled in Senate – Vote Set for Monday

Throughout this week, SB 705 has been stalled on the Senate floor, with a variety of questions and objections delaying its passage. MACo, MML, and individual local governments have raised objections to the costly and unfair nature of the pending bill. On Thursday, the bill — currently on “third reader” and awaiting its final Senate up-or-down vote – was delayed until Monday for its further consideration.

Proponents argue that the bill seeks to expand access to the judicial system for multiple claims, but governmental attorneys have illustrated many scenarios where the bill would simply add costs to existing litigation, reduce the likelihood of reasonable early settlements, and trigger more lawsuits in search of easy payouts. Counties have pointed out numerous ways that SB 705 fails to create a true parallel with federal law – one of the stated goals of the bill’s proponents. Rather, the bill creates an easier avenue to attorney fee recovery, without other balancing elements present in federal litigation.

The effort on the Senate floor is atypical, as a very small share of items that pass from Committee become similarly entangled.

Read MACo’s testimony on SB 705.

For a discussion of the bill’s policy and fiscal effects, read the DLS fiscal note.


Body Camera Legislation Defeated in Senate Committee

In a surprise move, the Senate Judicial Proceedings Committee defeated MACo’s initiative bill to refine what footage from police body-worn cameras could be released under the Maryland Public Information Act. MACo’s bill, described by many as a “near consensus,” had sought to limit the worst-case scenario of a broad, untargeted request for footage that could prove costly and cumbersome to prepare for distribution.

HB 767, Sponsored by Delegate Sydnor, passed the House of Delegates with a comfortable bipartisan majority, but that bill and its Senate cross-file SB 970 were debated in the Senate Committee and ultimately rejected by nearly the full Committee membership. That vote spells the end of the debate on this issue for the session, and potentially for good.

A similar fate befell MACo’s bills in the 2016 session, when the House made modest amendments and passed the bill. The Senate committee, citing an extraordinary workload from other high profile legislation, did not focus on the body camera bills and they died without a formal vote, for lack of action.


President Trump’s Budget Proposal Carries Big MD Effects

President Trump’s proposed federal budget has triggered a wide range of reactions, including some local concerns about effects on the Maryland workforce, environment, and numerous other areas. While federal actions are far from certain, this debate does carry over into the state political arena in several ways.

A Baltimore Sun article covers the story, with significant focus on federal funds for the Chesapeake Bay cleanup efforts, but touches on the wider picture as well:

In Maryland, a state where the economy is closely tied to federal spending, the $1.15 trillion budget could put thousands of civilian government employees out of work but also boost defense activity in the state. Urban development and road projects in Baltimore could be put on hold while additional money may be set aside for addiction treatment.

The proposal, which faces opposition in Congress, underscores the administration’s desire to limit the federal government’s reach into housing, the environment and safety-net programs, while vastly increasing investments in the military and homeland security — all of which reflect promises Trump made during his campaign.

The federal budget process is dramatically different than that in Maryland State government. While the state and many larger counties use what is often referenced as an “Executive Budget” system, where the General Assembly may cut but not add funding, the federal government’s budget process is more legislatively-driven. The President’s proposals represent the Administration’s priorities, but are not materially binding on the Congress. Debate on the budget plan, and the multiple appropriations bills that represent the federal budget, will extend for months.

Wide coverage of multiple news sources discussing the Maryland and political effects of the proposed budget can be found on the Maryland Reporter site, which offers a daily harvest of Maryland news and political coverage.

House on Unpaid Water Bills: No Liens For 1Yr, As We Study Tax Sales

The House Ways and Means Subcommittee on Revenues (who has jurisdiction over tax collection processes such as tax sales) has advanced two bills targeting the collection of unpaid water bills. The two amended bills, as passed, would impose a moratorium on using tax sales to collect water and sewer liens, and would require a multi-party study of tax sale processes to be completed this year.

The two bills being moved are:
HB 453: Bill Information | MACo testimony
HB 659: Bill Information | MACo did not take a position

In previous Conduit Street coverage (“Should ‘Good Actors’ Subsidize Bad Actions?”), MACo had raised concerns with laws limiting collection of overdue fines and charges – citing unfairness to those who have made their timely payments:

Water systems are usually set up by governments as “enterprise funds,” meaning they cover their own costs. This “user pays” principle is widely embraced for similar public services.

But if the prospect of losing service… or the potential to see your property face tax sale… is off the table, surely compliance will drop. The state’s largest water system in Baltimore City estimates that without the lien process available they could face some $7 million in reduced payments, as non-payers would no longer be eventually compelled to cover their own share of system costs.

Both bills should be reported out from the full committee and on the House floor in the days ahead, likely passing to the Senate by the Monday “crossover” procedural deadline.

Transportation Scorecard Compromise Passes Senate Unanimously

SB 307, the Administration bill to repeal the controversial transportation scorecard law passed last year, has passed out of the full Senate in an amended form. The final floor vote was unanimous, after discussions and additional amendments yesterday described the revised bill as a compromise acceptable to the Administration.

The third reader bill, including all amendments is available online.

MACo had testified on the original “repeal” bill urging the legislature to either repeal or refine the current law, to address multiple issues with the bill and its related implementing regulations.

The House has not yet acted on its cross-filed version of the same proposal.

Same-Day Voter Registration May Be In Play

The Senate has passed SB 423, a constitutional amendment that would enable future legislation to create election day registration in Maryland.

MACo had raised concerns that the eventual implementation of election day registration could prove costly and difficult – potentially increasing voter wait times. While SB 423 does not actually set of the process, it represents a necessary first step toward that end, as the state constitution currently specifies details of the voter registration process. If passed by the General Assembly, the constitutional amendment would be placed on the ballot for statewide voter approval in 2018. See MACo’s testimony on SB 423.

The House Ways and Means Committee has not yet acted on the crossfiled bill, HB 345.

Senate on Septics: BAT Mandate Out, Funding Priorities In

SB 266, the high profile legislation seeking to reinstate the statewide requirement for “best available technology” septics systems, has been heavily amended on the Senate floor. Following more than a week of debate, including one preliminary vote defeating the original bill, the final version of the Senate bill no longer imposes that mandate, and instead addresses funding priorities for the Bay Restoration Fund, and charges the state’s Chesapeake Kay Subcabinet with studying nitrogen reduction strategies.

The bill amendments are available online. The amendments will be added into a third reader version before the bill receives its final vote, later this week.

Previous Conduit Street coverage:

Septics Bill Remains In Senate Limbo, Amendments Pending
“Best Available” Septics Mandate Stumbles in Senate

MACo testimony on SB 266

Senate Compromise on Transportation Scorecard Bill Advances

The Budget and Taxation Committee has passed an amended version of the Administration’s bill to repeal the controversial transportation scorecard law. The amended version would delay full implementation of the scoring process as a guide for project funding for two years, and empower a work group to study possible changes to the law.

From coverage in the Baltimore Sun:

The law, passed over Hogan’s veto last year, requires officials to study local transportation projects, rank them and offer an explanation if any project receives state funding over one that is ranked higher.

Hogan argues the law forces him to eliminate state funding for almost every project in Maryland and could mire projects in litigation. General Assembly Democrats and the Maryland attorney general’s office disagree, saying the scoring system is only advisory.

The new legislation, which has the backing of Senate President Thomas V. Mike Miller, amends a bill proposed by Hogan to repeal the scoring law. It would create a panel of legislators and administration officials that would study the new scoring system for two years.

In the meantime, Hogan would be allowed to assign transportation funding under the old rules, which did not require the governor to create a scoring system or explain why he chose to fund one project over another.

For previous coverage of the Senate compromise amendment, see Conduit Street coverage of the original bill hearing.

During Senate floor discussions on Tuesday, President Miller indicated “we’re working with the second floor [the Administration] on this,” and suggested that Administration-supported amendments could be forthcoming during floor debate on Wednesday.