The Secretary of Housing and Urban Development Ben Carson testified before the House Appropriations subcommittee on Housing and Urban Development about the Administration’s FY 2019 budget and suggested that the Opportunity Zones program could replace Community Development Block Grant (CDBG) funds.
The Trump Administration has called for cuts to grant programs that support state and local governments. Congress, however, has not embraced those proposals.
Carson, however, made a case that “we do have a way to take care of the good things that CDBG does, and that again is through the Opportunity Zone program.” He estimated that the fledgling initiative would bring in as much as $2.2 trillion, which could be used “to substitute” for CDBG and to put toward infrastructure.
The Opportunity Zones program provides a tax incentive for investors to reinvest unrealized capital gains—such as profit from a stock position that has not been closed to make a profit—into special funds that will channel money to investments in low-income communities.
Earlier this month MACo sent a letter to the Department of Housing and Community Development and the Department of Commerce urging a process to incorporate county input into Maryland’s process for determining which zip codes would qualify for the Zones. The Hogan administration responded by designating an official at the Housing Department to serve as a coordinator for any input received.
The State Agencies working to designate “Opportunity Zones” created under recent federal tax reforms are seeking input from county officials.
Under the 2017 tax reforms, Congress established a new program, where states designate a series of census tracts as “Opportunity Zones.” From the website of the Economic Innovation Group, this tidy description of the funding scheme connected to the designated Opportunity Zones:
WHAT ARE OPPORTUNITY FUNDS? Opportunity Funds are private sector investment vehicles that invest at least 90 percent of their capital in Opportunity Zones. U.S. investors currently hold trillions of dollars in unrealized capital gains in stocks and mutual funds alone— a significant untapped resource for economic development. Opportunity Funds provide investors the chance to put that money to work rebuilding the nation’s left-behind communities. The fund model will enable a broad array of investors to pool their resources in Opportunity Zones, increasing the scale of investments going to underserved areas.
MACo sent a letter to the two affected state Departments, urging a process to incorporate county input into that selection. From MACo’s letter:
County governments have a close and special knowledge of the communities that fall under their jurisdiction and a significant stake in the census tracts to be selected. They have helpful information about the specific areas of need, local priorities, land use planning, and local projects or investments that may help inform the decision-making process. A public process, affording local governments—as well as their economic and community development partners—the ability to share their valuable knowledge could substantially improve the effectiveness of the Opportunity Zones designated across our state.
Maryland has a short time window to offer its zone designations. The Administration has responded by designating an official at the Housing Department, who will serve as a coordinator for any input received. County views on the “Opportunity Zone” designation process should be directed to:
Chief of Staff
Department of Housing & Community Development
Office of the Secretary
7800 Harkins Road
Lanham, MD 20706
The timetable for the zone selection is rapid, so counties are encouraged to submit any input to the Department in an expedited basis.
MACo Policy Associate Kevin Kinnally testified in support with an amendment of House Bill 877, “Burial Sites – Access, Disinterment, Criminal Penalties, and Tax Credit”, before the House Health and Government Operations Committee on February 28, 2018.
HB 877 provides local governments with a way to recover the costs of repair or
maintenance work performed by local governments in preserving and maintaining blighted or abandoned cemeteries. The county must notify the owner of the property, and if there is no response within two days the county would be able to perform the necessary work on the site. Counties are also authorized to then charge the owner for the cost of the work or impose a lien on the property.
The bill also offers counties the ability to offer a tax credit for an improvement of real property on a burial ground. The counties are seeking an amendment to clarify that counties opt-in and set the terms of the tax credit.
HB 877 provides local governments with a means for recovering the costs of repair or maintenance work performed by the local government. The county must first send notice to the owner that the site needs repair or maintenance. If the owner does not respond after two notices, the county is authorized to perform the needed work and then either charge the costs to the owner or impose a lien on the property.
Under current law, there is no mechanism for local governments to recoup the costs for these services from the owner of the cemetery. Local governments that would like to remedy or restore abandoned private cemeteries may only raise money to perform the services themselves, or rely on charitable organizations and community service volunteers. This bill creates a mechanism for local governments to offset the costs associated with preserving these abandoned properties while ensuring that the owner of the property is also invested.
Additionally the bill authorizes counties to grant, under local law, a local property tax credit on an improvement of real property that substantiates, demarcates, commemorates, or celebrates a burial ground. MACo seeks amendments to clarify that counties set the terms of the credit under local law – a common practice with locally enacted tax credit programs.”
Follow MACo’s advocacy efforts during the 2018 legislative session here.
A Baltimore Sun article (2018-01-03) reported on the 2018 legislative initiatives for state legislators who represent the Towson area in Baltimore County. Highlights include legislation on sexual offenders, use of best available technology for nitrogen removal (BAT) septic systems, curtailing predatory loans, and lowering business taxes.
Senator Jim Brochin
The article noted that Brochin is not running for Senate again and instead run for Baltimore County Executive.
Sexual Predators – Admissibility of Prior Acts: The article stated that Brochin’s top priority will be the Repeat Sexual Predator Prevention Act. The bill would allow evidence of prior sexual misconduct to be admitted as evidence in cases showing a pattern of sexual assault or child molestation. Previous versions of the bill have passed the Senate three times but have never passed in the House.
“There have been horror stories of the same perpetrators getting away with stuff like this for years, and I think it’s time to balance the scales of justice,” Brochin said. “We have put safeguards in the legislation to protect the accused, and we think we can get it through the Senate again, but the tricky part will be getting it past the House.”
Juvenile Sentencing: Brochin will also be sponsoring legislation that allows a juvenile convicted of a crime other than murder or rape the option of entering into a diversionary program rather than serving a sentence. The program would provide classes, group counseling, and psychiatric services.
Pharmaceutical Company Lawsuits: Brochin will also support legislation allowing Maryland to sue pharmaceutical companies for price gouging.
Delegate Steve Lafferty
Use of BAT Septic Systems: The article indicated that Lafferty would introducing legislation concerning the use of BAT septic systems. One potential proposal would require BAT septics for new construction within 1,000 feet of an impaired stream or waterway. Current law requires BAT septics within the Chesapeake and Atlantic Coastal Bays Critical Areas.
Funding for Community Development Groups (CDCs): Lafferty is also working on creating a funding mechanism for CDCs for housing and park revitalization.
“The idea is to set up a fund in a state agency that would make funds available to community development groups,” he said. “Money would not go to individuals but to established organizations.” The money could be used for such community-based efforts as housing repair and renovation, improving parks, or providing job training or child care.
Delegate Susan Aumann
The article noted that Aumann will not be running for re-election.
Predatory Lending Practices: Aumann plans on introducing legislation to lower the maximum interest rate an in-state institution may charge on a loan from 34 percent to 28 percent.
The Republican lawmaker, who is a member of the Maryland Financial Consumer Protection Commission, said she will work with the attorney general to rein in out-of-state lenders’ rates as well, which, she said, can sometimes reach triple figures.
“People need to know what they’re getting into,” she said, adding that some lenders “take rates to astronomical levels.”
Delegate Chris West
The article stated that West is running for Brochin’s soon-to-be-vacant Senate seat.
Juvenile Sentencing: West will be cross-filing the same bill that is being introduced by Brochin.
Homeowner Association Covenants: West also plans to introduce legislation that would eliminate racially exclusive covenants for homeowner associations. This would require existing covenants to be amended.
Lower Corporate Taxes: West will have legislation incrementally lowering the corporate tax rate from 8.25 percent to 6 percent over 9 years.
“I’m trying to close the gap between Virginia and Maryland,” said West, who lives in Towson. “Too many times corporations moving into the area relocate to Virginia because it has a lower corporate rate. We want to take that part out of the decision-making process so that Maryland will be on an equal footing with Virginia.”
Physician Certification: Finally, West will be introducing a bill prohibiting hospitals from denying privileges to physicians that are not certified by a national organization so long as they were certified by the Maryland Medical Association
The Code and Ordinance Worksheet, provided by the Center for Watershed Protection, has been updated after 20 years of use.
Center for Watershed Protection Press Release:
Originally created in 1998, the COW [Code and Ordinance Worksheet] is a tool for municipal staff or non-governmental organizations whose communities are experiencing or anticipating new development or redevelopment in urban, suburban or rural areas and need help evaluating their local development regulations.
Center Director of Research Karen Cappiella:
The COW allows an in-depth review of the standards, ordinances and codes that shape how development occurs. We are excited to launch this updated COW to help local communities plan for more environmentally friendly, economically viable and locally appropriate development.
The update includes national expert input from relevant disciplines. The document accompanies the Center’s Better Site Design Handbook, which outlines 22 model development principles for implementing better site design.
In the last 20 years, COW has been used in 75 communities 8 states and Washington DC.
The Two-Generation Family Economic Security Commission, led by Lt. Governor Boyd Rutherford, issued its interim report, proposing statewide strategies and pilot programs intended to mitigate multigenerational poverty by linking state policies, systems, and programs together to simultaneously serve vulnerable parents and children.
Established in March of last year, the interagency, multidisciplinary Commission is part of a public policy initiative that seeks to break the cycle of multigenerational poverty through a family-centered approach to service delivery. The Commission’s interim report identifies early childhood development, health, education, and family economic stability as key factors to addressing this issue, in addition to aligning current services and delivery programs in a more family-centric manner.
Data show that many children who grow up in poverty or in low-income families go on to experience economic hardship as adults, and that those living in multigenerational poverty often face difficulties in making sound long-term personal and financial plans. To address these challenges, the Commission held numerous meetings across the state where they heard from Maryland families about the struggles they faced as they navigated their paths towards self-sufficiency.
The report proposes pilot programs that would include a multi-generational educational opportunity where parents and children can simultaneously receive high-quality education and training in Prince George’s County and an intergenerational community center in Dorchester County where services for seniors, parents, and children are all provided under the same roof, creating an environment where community development is fostered along with the family development.
Following an evaluation of the pilot programs, the Two-Generation Family Economic Security Commission will meet to submit a final report that will include lessons learned from the programs as recommendations to the General Assembly’s 2019 legislation session.
Grants were awarded to: Crossroads Community Inc., Anne Arundel Medical Center Foundation, Compass Regional Hospice, Haven Ministries, QAC Social Services Department’s Nurturing Program, and the McArdle School.
The grants will be used in various ways throughout the community. Crossroads Community will put its grant money to use repairing several of its Residential Rehabilitation Program group homes, which provide a place for its consumers to live and to learn life skills in a safe communal living environment. Anne Arundel Medical Center’s grant will fund an art therapist in its Partial Hospitalization Program, which embraces a holistic approach to treatment of its mental health patients. Compass Regional Hospice’s Hope and Healing Center will use QACMHC’s grant for its grief counseling programs.
Haven Ministries requested funds to continue its case management services that connect its homeless clients with resources and programs, such as mental health services. QAC Social Services Department’s Nurturing Program’s mission is to provide opportunities for personal growth in order to prevent and treat the intergenerational cycle of child abuse and neglect, and QACMHC’s grant will help enhance this program. With the help of QACMHC’s grant, the McArdle School will build a Sensory Room to help those with learning disabilities, developmental disabilities, or sensory impairments learn to interact with the world around them.
The agreement espouses four goals for local governments and planning boards along the route: help local businesses prosper, expand the local labor force, create housing opportunities for all incomes and promote vibrant, sustainable communities.
The agreement is not legally enforceable, but the leaders said it could provide a moral guide to future leaders who will have to handle the new development and economic growth expected after the Purple Line is completed in 2022.
The article explains that the agreement was drafted by the Purple Line Corridor Coalition, a group whose members include resident and business groups, local governments, and community organizations.
While not legally binding, the signatories pledge to work together to protect the residents and businesses. Signatories included Montgomery County Executive Ike Leggett, Prince George’s County Executive Rushern Baker, University of Maryland, College Park, President Wallace Loh and regional planers.
The agreement was developed out of concern that current long-time low income residents and small businesses will be displaced as neighborhoods lining the corridor experience economic growth. As noted in The Washington Post county leaders expressed understanding from past experiences of the need to protect those residents.
Prince George’s County Executive Rushern L. Baker III (D) said he has heard from residents, particularly in the heavily Latino Langley Park area, who welcome the Purple Line but are concerned about being priced out.
“This agreement says, ‘We hear you,’ ” Baker said. “We’re looking at ways . . . to give them every opportunity they want to stay there.”
Montgomery County Executive Isiah Leggett (D) said he wished the county had had a similar commitment in place to protect small businesses as downtown Silver Spring was redeveloped.
MACo’s Winter Conference will focus on intergovernmental cooperation and ways that counties can partner with entities in the public and private sector to achieve the best results for Maryland’s residents. Sessions will highlight collaboration across county lines and service areas to address priorities like the opioid epidemic, Next Gen 9-1-1, and the environment, along with other important topics like mutual aid agreements and cooperative purchasing.
On the latest episode of the Conduit Street Podcast, Kevin Kinnally and Michael Sanderson discuss the MACo Winter Conference and its focus on reviewing timely issues that will be relevant during the upcoming Maryland General Assembly Session.
MACo has made the podcast available through both iTunes and Google Play by searching Conduit Street Podcast. You can also listen on our Conduit Street blog with a recap and link to the podcast.