MACo Supports Repeal of County Mandate to Repay Comptroller

MACo Associate Director, Barbara Zektick, testified in support of House Bill 1433, “Local Income Tax Overpayments – Local Reserve Account Repayment – Forgiveness,” which repeals the requirement that local governments must reimburse the Local Income Tax Reserve Account for overpayments of local income tax revenue distributions made by the Comptroller. This bill allows for funds to be drawn from the Account, rather than local government budgets, to rectify errors for which they are not responsible.

Over this past year, due to an issue concerning misclassified addresses, the Comptroller’s Office has identified $21 million in local income tax revenues which were distributed to counties and municipalities incorrectly for tax years 2010-2014 – resulting in overpayments to some local governments and underpayments to others.

MACo’s testimony states,

MACo supports this bill because it alleviates local governments from bearing the burden for unpredicted liabilities due to no fault of their own. Such liabilities could potentially compromise a local government’s ability to provide funds for needed programs and services.

The cross-file to the bill, SB 397, was heard by the Senate Budget and Taxation Committee on February 15, 2017. It passed the Senate unanimously, with an amendment to require the Comptroller to reimburse any local government which has already made a repayment.

Click here for previous Conduit Street coverage.

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

MACo Supports Business Tax Incentives; Concerned With Restrictive Jurisdiction Participation

MACo Associate Director, Barbara Zektick, submitted written testimony to amend legislation (SB 796) which creates a tax incentive program to encourage businesses to locate and expand in several jurisdictions suffering economic stresses. MACo is concerned with restricting jurisdictions from participation, along with the possibility that the program could result in businesses relocating inside the state.

MACo’s testimony provides suggestions for the bill’s amendments:

Expand Program Participation to “Distressed Areas” In Any Jurisdiction
Economic growth, regardless of the region of the state, has statewide benefits. Instead of limiting participation, program criteria should enable all local jurisdictions to participate. However, counties appreciate that incentives should be targeted in areas experiencing distress or otherwise necessitating investment. As such, MACo supports efforts to ensure that benefits under the program are provided in areas targeted for economic investment, as identified by the Department of Commerce in consultation with county governments.

Limit the Tax Incentives to Businesses Newly Moving Into or Expanding Within the State
The special incentives provided by this program are potentially lucrative, and could result in businesses relocating from one part of the state to another. To prohibit this from occurring, the program should apply only to businesses newly locating into Maryland, or to those launching substantial expansions in the state – not to those who may relocate intrastate.

SB 796 was heard by the Senate Budget and Taxation Committee on March 7, 2017.

Follow MACo’s advocacy efforts during the 2017 Legislative Session here.

MACo: Counties as a Whole Can’t Afford $15 Minimum Wage

MACo Policy Associate, Kevin Kinnally, submitted written testimony opposing the $15 minimum wage by 2023 (HB 1416). Counties are concerned this legislation will have significant fiscal and operational impacts on local governments.

MACo’s testimony states,

Counties employ thousands of Maryland residents, including full-time, part-time, seasonal, and grant-funded employees. Full-time and grant-funded employees are generally paid on a salary basis. However, part-time and seasonal employees may be paid on an hourly basis. According to the bill’s fiscal note, raising the minimum wage in such a drastic fashion will cost local governments millions of dollars per year.

As a rule, MACo resists state policies that result in costly or burdensome local implementation. HB 1416 would place a significant fiscal burden on county governments. Under state law, counties have no choice but to fund these costs – competing for limited local funds against education, public safety, roadway maintenance, and other essential public services.

Many part-time and seasonal employees work in community services, such as after-school activities, summer camps, and community services for vulnerable populations. Accommodating this legislation could result in significant cuts to those programs.

HB 1416 was heard by the House Economic Matters Committee on March 7, 2017.

Follow MACo’s advocacy efforts during the 2017 Legislative Session here.

MACo Opposes Local Collective Bargaining Mandate

MACo Policy Associate, Kevin Kinnally, testified in opposition to legislation (HB 1370) 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. This is a prescriptive, one-size-fits-all design that would expand collective bargaining rights in a third of Maryland’s counties.

MACo’s testimony states,

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.

This bill was heard by the House Appropriations Committee on March 7, 2017. Joining Mr. Kinnally in opposition to HB 1370 was Kim Frock, Director of Human Resources in Carroll County and Beverly Churchill, Director of Human Resources in Queen Anne’s County.

Useful Links

2016 Bill: HB 736

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

MACo: Keep Youth Service Bureau Funding Flexible

MACo Associate Director, Barbara Zektick, and Policy Associate, Kevin Kinnally, testified in opposition of legislation (SB 784 and HB 1187) that would have a significant impact on Local Management Boards’ funding and decision-making authority when it comes to oversight of the Youth Services Bureaus.

MACo’s testimony states,

As funding for children and family services, including those for Youth Services Bureaus, has traditionally been awarded to Local Management Boards for local distribution, the shift could result in a cut to local board funding. It would also circumvent the boards’ authority to make funding decisions based on the specific needs of their communities.

Currently, Local Management Boards receive funding through the CCIF. In turn, they award funds to community-based strategies and programs, such as Youth Services Bureaus, to help deliver services that align with the local needs assessment and community plans. Local management boards make funding decisions based upon the ability of a program to locally address a critical need, fill a gap in services, meet community priorities, and demonstrate improved outcomes for the children and families serviced.

Under SB 784, Youth Services Bureaus would receive funding regardless of whether a local board has determined if it is in the best interest of the community for the program to be funded. While Youth Services Bureaus provide a specific service to jurisdictions in need, not all counties have them. In those counties, the CCIF funds are awarded to other local programs. Other counties without Youth Service Bureaus may find it beneficial to channel resources elsewhere. The decision-making flexibility to channel resources to meet local needs is crucial.

SB 784 was heard by the Senate Budget and Taxation Committee and HB 1187 was heard by the House Appropriations Committee. Both hearings took place on March 7, 2017. Pamela Brown, Executive Director of the Anne Arundel County Partnership for Children, Youth, and Families joined the MACo staff in opposition to this bill.

Follow MACo’s advocacy efforts during the 2017 Legislative Session here.

MACo Proposes Local Authority for Agritourism Tax Exemptions

MACo Associate Director, Barbara Zektick, worked with bill sponsor Senator Addie Eckardt to propose a local option for tax exemptions from the agricultural tourism industry for Senate Bill 716, heard by the Senate Budget and Taxation Committee on Thursday, March 2.

MACo’s testimony states,

MACo supports this bill with the sponsor’s amendments. Many counties are interested in promoting agricultural tourism in their jurisdictions as a means to support the agricultural industry. In fact, Baltimore and Harford counties already exempt such activities from their admissions and amusement taxes, through state legislation.

MACo generally supports legislation which enables counties to authorize local tax exemptions by local ordinance, as opposed to bills which mandate those exemptions across the board. Mandated tax exemptions require each county to forego meaningful local revenues to support essential public services, even if the exemption does not serve the best interests of that particular county. Particularly, but not exclusively, during times of economic uncertainty and revenue projection shortfalls, counties require full authority to balance their budgets as they deem most fit.

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

MACo Opposes Removal of Longstanding Workers’ Comp and Retirement Benefits Offset

MACo Legal and Policy Counsel, Les Knapp, provided testimony in opposition to legislation (SB 751) that would appear to shift costs from the pension/retirement sector to the workers’ compensation sector, which may not affect State costs but would increase costs on local governments. One of the key provisions of SB 751 is the repeal of the ability to offset a workers’ compensation benefit if a person is receiving an ordinary disability payment for the same injury from the State Retirement and Pension System (SRPS). Another appears to result in the shifting of costs between SRPS and the workers’ compensation system. The bill was sponsored by Senator Guy Guzzone.

The bill would allow the “stacking” of workers’ compensation and disability retirement benefits for someone under an ordinary disability requirement, removing a longstanding standard offset that provides a person can only be compensated one time for one injury.

MACo’s testimony states,

While such shifting may ultimately be neutral at the State level, as the State pays for both retirement benefits and workers’ compensation for its members, such shifts have a different effect for local governments, which pay for workers’ compensation directly.

The cross-file to the bill, HB 344, was heard by the House Economic Matters committee on February 21, 2017. Joining Mr. Knapp testifying in opposition to this bill was Wendy Karpel, Associate County Attorney from Montgomery County.

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

MACo: New Marriage Fee Law Would Infringe on Local Decision-Making

MACo Policy Associate, Kevin Kinnally, submitted written testimony in opposition of House Bill 864, “Distribution of Marriage Fees”, which would change the way counties collect and remit marriage fees, overriding a variety of locally-supported arrangements developed over time through state law.

MACo’s testimony states,

Under current law, marriage fees are collected by a judge, clerk, or deputy clerk. From the fee, $10 is paid into each county’s general fund. The remainder of the fee in most counties is retained by the clerk (and disbursed to the State general fund); however, in some counties, a portion of the remaining fee is paid to a local historical society. In each case, these arrangements were developed through local legislation – much of which is upended by the new centralized statewide proposal in HB 864.

This bill would mandate that counties, after allocating a portion of marriage fees to their general funds, remit the remainder of the fees to the State Comptroller. The State Comptroller would then be responsible for dispersing the funds to Preservation Maryland, Inc. for the promotion of historical preservation projects. This new scheme would essentially override the current collection and remittance systems developed through a variety of county-by-county agreements and legislation.

Changing the way marriage fees are collected and remitted could create unnecessary administrative burdens for county governments. Furthermore, the bill does not allow for county input on local preservation projects funded by Preservation Maryland, Inc.

The cross-file to the bill, SB 1047, will be heard by the Senate Judiciary Proceedings committee on March 14, 2017.

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

Show Your Support for Local Infrastructure Funding!

Next week both houses of the Maryland General Assembly will hold hearings on MACo’s initiative bill, the Local Infrastructure Fast Track for Maryland Act. The Senate Budget and Taxation Committee will hear Senate Bill 586 on Tuesday, March 7 at 1 p.m. and the House Environment and Transportation Committee, together with members of the Appropriations Committee, will hear House Bill 1322 on Thursday, March 9 at 1 p.m.

Show your support!

  • Join MACo in testifying in support of this bill. To join our panel or submit written testimony, email Barbara Zektick, Associate Director now at bzektick@mdcounties.org.
  • Participate in our grand finale tweet storm on Tuesday by posting to social media using the hashtag, #LIFT4MD.

Everyone who lives, works, shops, moves, eats, drinks and flushes in Marylalift4mdnd depends upon its infrastructure. Investing in infrastructure – a call heard at every level of government – improves Maryland jobs, business attractiveness, and quality of life across the state.

Here’s what the The Local Infrastructure Fast Track for Maryland Act does:

  • Phases in full restoration of highway user revenues to counties, municipalities, and Baltimore City over a period of seven years;
  • Holds municipalities harmless by ensuring they always receive as much as they did this fiscal year;
  • Ensures that the State retains full auditing capability to confirm that highway user revenues are used for transportation purposes; and,
  • Requests that the Department of Budget and Management prepare a report on the Status of Local Infrastructure in Maryland, including information on the condition and funding sources for multiple modes of infrastructure, such as:
    • water and wastewater treatment and delivery systems,
    • 9-1-1 Emergency Number response systems,
    • public radio systems,
    • high-speed broadband access,
    • bridges and other transportation arteries,
    • evacuation resources, and
    • school facility maintenance needs.

Revenue Collection Tools Ensure Fairness To All Ratepayers

MACo Associate Director, Barbara Zektick, provided testimony in opposition to House Bill 453, “Tax Sales – Water Liens,” to the House Ways and Means Committee on February 23, 2017.  James DiPietro, Deputy Director, Bureau of Utility Operations, Department of Public Works, Anne Arundel County; and Janice Simmons, Bureau Chief, Revenue Collections, Department of Finance, Baltimore City, joined in opposition to this bill.

MACo ensured the bill sponsor and committee that the Association was happy to help work on addressing any issues which might allow some to profit, perhaps unduly, from the hardship of others. However, this bill deprives counties of the opportunity to use an effective tool for enforcement – tax sale – to enforce liens for unpaid water, sewer, or sanitary system charges. The tax sale process, or more specifically the potential for a property to go to tax sale, presents a much needed tool of last resort to ensure that property owners remit payment for their fair share of taxes and charges connected to public services. Most counties in Maryland go to tax sale solely to enforce utility liens. This bill removes this leverage for all counties, and undoubtedly would create many more deficient accounts for water and sewer bills from lack of enforcement – leading to increased rates on citizens who properly pay.

From MACo testimony:

All property owners deserve full and adequate notice of any collection efforts to collect taxes or charges assessed on the property – and as such, every county has procedures to ensure notice is provided prior to tax sale. Additionally, property owners have the right to redeem property within six months from the date of any tax sale by paying the amount owed. The tax sale process includes multiple checks and balances to ensure that local governments can collect overdue fees without unjustly depriving taxpayers of due process, water, or their homes.

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