MACo To Governor: Please Sign Highway User Restoration

This session proved a pivotal year for highway user revenue restoration.

Both the House and Senate agreed early on to provide local governments their first multi-year commitment in nearly a decade to bring back some of the local transportation funding that was decimated by about 90 percent in 2010. By passing SB 516/HB 807, the General Assembly has assured that most counties will see an increase in their total transportation funding by more than 40 percent, all the way through fiscal 2024 – assuming Governor Hogan allows the bill to become law.

To that end, MACo sent Governor Hogan a letter thanking him for his efforts to provide additional transportation funding to local governments, and requesting that he sign the bill into law. From that letter:

This bill – a top initiative of MACo’s – codifies an important step toward restoration of highway user revenues to Maryland’s counties, municipalities, and Baltimore City, for five years beginning in fiscal 2020. SB 516/HB 807 begins to address counties’ long-standing top fiscal priority. It provides reliable formula funding for multiple years, allowing counties to program their capital projects accordingly. ….

The cumulative loss of local roadway investment since fiscal 2010 is well over $3 billion.

Again, Maryland’s counties are deeply grateful for your efforts in providing additional transportation funding for local governments. Please take this one last step before the conclusion of your first term, and sign into law Senate Bill 516/House Bill 807, Transportation – Highway User Revenues – Distribution.

Investing in local roads was a key initiative of MACo’s this session.

Helpful Links

MACo’s Letter to Governor Hogan

County Highway User Revenue Breakdown (FY19)

2018 End of Session Wrap-Up: Road Funding

Highway User Revenues – What’s On The Table?

Counties Call For A Local Infrastructure Fast Track

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The Finally, Final County-by-County Transportation Aid Breakdown

Thinking_Face_EmojiWe love the Department of Legislative Services’ Two-Year Charts. But, counties shouldn’t start budgeting all of the highway user revenues allotted there for fiscal 2019 just yet (unless they are Baltimore City, Baltimore County, or Howard County – they can go ahead). That sum includes the municipalities’ share, as well.

For a final county-by-county breakdown of transportation aid, with the muni share excluded and including the most recent capital grants added through the Governor’s supplemental budget, click here

 

Anne Arundel Budget Proposal to Include $3M in Property Tax Relief

Anne Arundel County Executive Steve Schuh today announced that his FY2019 budget proposal will include $3 million in property tax relief. He plans to propose a property tax cut of $1.5 million in his budget, along with $1.5 million budgeted for a public safety property tax credit.

According to a press release:

We are committed to making our County an affordable place to live for our citizens,” said Schuh. “This tax relief proposal will ensure homeowners will not feel the sting rising property values as our economy continues to gain strength.”

Under the proposal, Anne Arundel County citizens would see their property taxes reduced by $1.5 million. Homeowners would see their property tax rate lowered to $0.902, which is $0.002 under the $0.904 projected property tax cap.

Public safety employees who live in the County would be able to obtain a $2,500 credit on their property taxes in addition to the proposed property tax rate cut. If enacted, the property tax cut would be the first below the tax cap in more than a decade.

The County Executive will present his full budget proposal on May 1st. The proposal is subject to County Council approval.

Read the full press release for more information.

Harford Budget Proposal Holds the Line on Taxes, Makes Record Investments in Education & Public Safety

Harford County Executive’s proposed budget surpasses funding levels in public safety and education without raising taxes.

County Executive Barry Glassman has released a recommended county budget for fiscal year 2018 which includes no increase in tax rates yet provides record-level funding for public safety, education, and libraries, according to the County. The recommended budget also doubles funding to fight the opioid epidemic, increases school security measures, and invests a record $22 million to protect land from future development.

According to a Harford County press release:

“I began my term leading Harford County on a new path to fiscal balance and efficiency because I’ve always believed that if you want to lift someone up, you’ve got to be on higher ground,” County Executive Barry Glassman said. “While this path has not always been easy, it has allowed my administration to direct a total of nearly $38 million over the past four years toward reinstating salary increases for our teachers, law enforcement and dedicated county employees, without raising taxes. We have done all this at the same time we have restored our unassigned fund balance, maintained the county’s AAA bond rating and implemented the county’s first property tax credit for qualifying seniors and military retirees.”

Restoring Balance & Efficiency

  • No tax increases
  • 100% of new, ongoing FY 19 revenue dedicated to education and public safety
  • County government efficiencies help fund other operations
  • Unassigned fund balance more than doubled over the last three years
  • AAA bond rating lowers borrowing costs; rating maintained due to strong management and
    realistic Capital Improvement Program

Reinvesting in our Workforce

  • 2% COLA for all county employees plus a $2,000 merit-based increase to the base salary per
    qualifying employee
  • Equivalent increases for State’s Attorney and Circuit Court employees
  • Merit-based increase will have greater impact on lower-salaried workers
  • Funding equivalent to a 3% salary increase for Library employees; sets record-level funding for
  • Harford County Public Library
  • $2.8 million to fully fund the Sheriff’s Office’s request for salary increases; totals $5.3 million
    over the last two years
  • $122,472 for the new Sheriff’s Office Cadet Program

Investing in Education

Record-level funding continues for Harford County Public Schools:

  • $245,815,645 in FY 19 operating funds for HCPS; total increase of $7.1 million over FY 18
  • $6.4 million of the total increase dedicated to raising instructional salaries, continuing our support for teachers
  • $400,000 to Harford Community College for the county’s traditional 1/3 share of funding to
    support staff salary increases

Strengthening Communities

Preventing and treating opioid addiction:

  • County funding more than doubled to $610,000
  • Includes $250,000 toward the county’s first 24-hour crisis center for mental health &
    addiction
  • Historic-level funding for our first responders:
  • $6,964,084 Volunteer Fire Companies; represents a 3% increase over FY 2018
  • $3,546,668 EMS Foundation
  • $1,589,118 County EMS Service

Keeping our children safe in school:

  • $773,000 to expand existing School Resource Officer Program to remaining middle schools
  • $325,000 to fully fund requested school security camera upgrades
  • $100,000 ongoing annual funding to improve radio communications in schools

Agricultural preservation:

  • Record-level funding of $22 million from revenue dedicated to preserving agricultural land

Support for Community Organizations:

  • Harford County Humane Society
  • Harford Center
  • The Arc Northern Chesapeake

Read the full press release for more information.

Baltimore City Council Unifies Over Recordation Tax Increase

The Baltimore City Council is considering raising the City’s recordation and transfer taxes to pay for affordable housing.

By raising the City’s 1.5 percent transfer tax to 2.1 percent and the recordation tax from 1 percent to 1.4 percent, the Council hopes to generate approximately $20 million for an affordable housing trust fund approved by the voters in 2016. Currently, that fund has no dedicated funding source.

Every City Council member has signed onto City Council Bill 18-0221 as a sponsor or co-sponsor, including the President – suggesting that the bill has a strong chance of passage. Owner-occupied properties would be exempt from the tax increase; buyers of residential properties can be exempt if they attest in writing that they will live in the property for at least seven of the 12 months following the purchase.

The Baltimore Sun covers the story.

 

 

Maryland’s Tax Reform Response: County Impacts

The 2018 session is complete and with it, any changes to Maryland’s tax code for the next year. Over the session, the General Assembly made few changes to state and local income tax collections. However, those changes may be significant for county budgeting purposes.

Prior to any enactment of significant income tax changes at the state level, the Comptroller’s Office estimated that local income tax revenues would increase by an estimated $255.0 million in fiscal 2019 and $199.0 million in fiscal 2020, as a result of federal tax reform. A significant portion of that revenue gain is due to the shift in taxpayers who will now claim the standard deduction.

Bills passed by the General Assembly which subtract from the original estimate include:

  1. Senate Bill 318House Bill 570, which alter the value of the standard deduction beginning in tax year 2018 by increasing its maximum value from $2,000 to $2,250 for single taxpayers and from $4,000 to $4,500 for taxpayers filing jointly. Beginning in tax year 2019, the value of the standard deduction is indexed based on the annual change in the cost of living. MACo estimates that altering the value of the standard deduction will decrease county income tax revenues by $34.0 million in fiscal 2019, $26.5 million in fiscal 2020, $29.8 million in fiscal 2021, $33.24 million in fiscal 2022, and by $36.9 million in fiscal 2023.
  2. Senate Bill 996, as well as House Bills 296 and 327, expand the existing military retirement income tax subtraction modification by increasing from $10,000 to $15,000 the maximum amount of retirement income deductible from Maryland adjusted gross income. In order to qualify for the increased subtraction modification, the individual must be at least 55 years old. The bills also expand the existing subtraction modification for retired “hometown heroes” by extending eligibility to correctional officers.  Local income tax revenues are expected to decrease by $4.3 million in fiscal 2019 and by $4.7 million in fiscal 2023.
  3. House Bill 96 (Ch. 36) creates a subtraction modification for up to $7,500 of the qualified expenses incurred by a living organ donor.  Local revenues are expected to decrease by $13,000 in fiscal 2019 and by $16,000 in fiscal 2023.
  4. House Bill 43 creates a subtraction modification for up to $50,000 earned from the sale of a perpetual conservation easement on real property
    located in Maryland.  Local revenues are expected to decrease by $110,100 in fiscal 2019 and by $135,200 in fiscal 2023.
  5. House Bill 1069 increases to $7,000 the value of the subtraction modification for qualifying volunteer fire, rescue, or emergency medical services personnel – but not until fiscal 2021. Local revenues are expected to decrease by $332,000 in fiscal 2021 and by $663,000 in fiscal 2023.
  6. House Bill 671 creates a subtraction modification of up to $250 for classroom supplies that are purchased by an elementary or secondary classroom teacher.  Local revenues are expected to decrease by $588,000 annually beginning in fiscal 2019.

Income Tax Legislation - County Effects

BillWhat It DoesWhat It Earns (Costs) (FY19) (millions)What It Earns (Costs) (FY20) (millions)
TOTAL$216$167.38
Federal Tax Cuts and Jobs Act of 2017 Overhauls federal tax code$255
$199
SB 318 & HB 570Increases standard deduction & indexes to cost of living($34)($26.5)
SB 996; HB 296 & 327increases subtraction modification for military retirees and retired correctional officers($4.3)($4.4)
HB 96creates subtraction modification for organ donors($0.013)($0.014)
HB 43creates subtraction modification for sales of perpetual conservation easements($0.110)($0.115)
HB 1069increases subtraction modification for volunteer fire/EMS00
HB 671creates subtraction modification for classroom supplies($0.588)($0.588)

For a wealth of information regarding what happened this legislative session, including regarding income taxes, see the Department of Legislative Service’s 90 Report.

Round-up of the 2018 Session for Counties

MACo’s legislative efforts earned an 80% success rate – and as usual, the counties’ voice makes a difference in Annapolis. Bills we support are more likely to pass, and bills we oppose are more likely to fail.

2018 Legislative Results Infographic

MACo’s legislative initiatives, priorities, and positions are directed by its Legislative Committee. This body comprises elected representatives from all of MACo’s members – the 24 county jurisdictions (including Baltimore City).

The “one county, one vote” system of deciding the Association’s legislative strategies, ensures that all counties have an equal voice. All 24 jurisdictions participated regularly in the weekly meetings throughout the session – where they also engaged with policy leaders and advocates who joined the meeting to address county leadership.

Our policy staff have compiled updates and results on all of the bills the Legislative Committee decided to take action on this year.

For the 2018 End of Session Wrap-up for each subject MACo covers, click below:

2018 End of Session Wrap-Up: Assessments and Taxation

2018 End of Session Wrap-Up: Business Affairs

2018 End of Session Wrap-Up: Disparity Grants

2018 End of Session Wrap-up: Economic Development Tax Credits

2018 End of Session Wrap-Up: Education

2018 End of Session Wrap-Up: Elections

2018 End of Session Wrap-Up: Employee Benefits & Relations

2018 End of Session Wrap-Up: Environmental Legislation

2018 End of Session Wrap-Up: Finance and Procurement

2018 End of Session Wrap-Up: Government Liability & Courts

2018 End of Session Wrap-Up: Health & Human Services

2018 End of Session Wrap-Up: Housing & Community Development

2018 End of Session Wrap-Up: Intergovernmental Relations *MACo Initiative Area*

2018 End of Session Wrap-Up: Parks & Recreation

2018 End of Session Wrap-Up: Pensions

2018 End of Session Wrap-Up: Planning & Zoning

2018 End of Session Wrap-Up: Property Taxes

2018 End of Session Wrap-Up: Public Information & Ethics * MACo Initiative Area *

2018 End of Session Wrap-Up: Public Safety and Corrections

2018 End of Session Wrap-Up: Road Funding * MACo Initiative Area *

2018 End of Session Wrap-Up: School Construction * MACo Initiative Area *

2018 End of Session Wrap-Up: State Budget & Fiscal Affairs

2018 End of Session Wrap-Up: Tax Sale Bills

2018 End of Session Wrap-Up: Transportation and Public Works

2018 End of Session Wrap-up: Wynne Tax Bills

2018 End of Session Wrap-Up: County Tax Revenues

2018 End of Session Wrap-Up: Other Tax Bills

2018 End of Session Wrap-up: Economic Development Tax Credits

An overview of MACo’s work to promote tax policies that enhance economic development in the 2018 General Assembly. 

Follow links for more coverage on Conduit Street and MACo’s Legislative Database

One Maryland Economic Development Tax Credits

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MACo successfully supported a bill which generally streamlines and simplifies the One Maryland Tax Credit, making it easier to access for businesses and improving economic development opportunities in our counties. Senate Bill 989/House Bill 1295 simplifies the One Maryland Economic Development program into one credit instead of two, allows businesses to claim credits during their first year in the program, reduces fiscal uncertainty of outstanding credits, and makes the program available to new businesses, among other changes. The legislation has passed the General Assembly and is awaiting the Governor’s signature. Bill Information | MACo Coverage

For more information on tax and revenues legislation tracked by MACo during the 2018 legislative session, click here.

2018 End of Session Wrap-Up: Disparity Grants

An overview of MACo’s work to promote economic equity in state funding distributions in the 2018 General Assembly. 

Follow links for more coverage on Conduit Street and MACo’s Legislative Database

Disparity Grants

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MACo successfully supported a bill which extends by two years a temporary enhancement of disparity grant funding for four counties: Caroline, Prince George’s, Somerset, and Wicomico. Senate Bill 764/House Bill 1624 provides reasonable and appreciated relief from State-imposed “caps” in the disparity grant program.  The extension of this relief, offered to those counties with the maximum local income tax rate of 3.2 percent, offers $6 to $7 million a year for two years for public services in counties where this assistance is necessary. The legislation has passed the General Assembly and is awaiting the Governor’s signature. Bill Information | MACo Coverage

For more information on tax and revenues legislation tracked by MACo during the 2018 legislative session, click here.

2018 End of Session Wrap-Up: Road Funding

Below is a brief overview of MACo’s work to restore county roads funding that was cut during the Great Recession.  

Follow links for more coverage on Conduit Street and MACo’s Legislative Database

Highway User Revenues

For more than forty years, local governments have received at least 30 percent of these revenues to fund local roads and bridges – 83 percent of the public road mileage in Maryland. In 2010, the State reduced highway user revenues by 90 percent for most jurisdictions – and local governments have advocated for restored highway user revenues ever since.

Push Icons-WONIn 2018, the General Assembly passed legislation to provide counties, municipalities, and Baltimore City with additional highway user revenues for five years beginning in fiscal 2020. HB 807 / SB 516 as amended will provide approximately $30 million more than in fiscal 2018to Maryland’s 23 counties, with additional funding for Baltimore City. Bill Information | MACo Coverage

For more information, see a County-by-County Breakdown of Additional Local Transportation Aid.

This year, as in years past, MACo continued to support legislation that would fully restore highway user revenues to their previous levels. As in recent years, however, the General Assembly did not advance these bills.

Push Icons-NOT IDEALSenate Bill 901/House Bill 1569 “Local Infrastructure Fast Track for Maryland Act,” a MACo initiative for the legislative session, did not pass out of committee in either chamber. This bill would have fully restored highway user revenues, enhanced auditing provisions, required the State to share any windfall of infrastructure funding from the federal government with local governments, and called for an assessment of the state of local infrastructure. Bill Information | MACo Coverage

For more information about the various bills introduced, see MACo’s coverage, What’s Up With All These Highway User Bills?

Click here for a round up of the wrap-ups for all policy areas