Get the Latest on Federal Tax Reform and What It Means for Counties

 

naco logoThe National Association of Counties’ Northeast Regional Conference Call this month will include an update on the federal budget, healthcare, and tax reform debates and how they could affect county governments. 

All representatives of Maryland counties are welcome to join the call.

NACo Northeast Regional Conference Call

Wednesday, May 24, 2017

8:00AM EST

Dial-In:1-719-359-9722

Dial-In(toll free): 1-888-757-2790

Guest Passcode: 299194

 

AGENDA

Welcome and Introductions

  • Hon. Christian Leinbach – Chairman, Berks County Commissioners (PA) / NACo NE US Representative
  • Roll Call by State – Each state will be called and Elected County Officials will be given the opportunity to state their name and county.
    • DC
    • DE
    • ME
    • MA
    • MD
    • NH
    • NJ
    • NY
    • PA
    • WV

 General Legislative/NACo Update

  • Deborah Cox – NACo Legislative Director
    • FY 2017 omnibus and what it means for counties
    • Health care reform efforts: all eyes on the Senate
    • The latest on Tax Reform

Upcoming NACo Webinars:

NACo Conferences:

Contact Robin Clark Eilenberg at MACo for more information about the monthly NACo calls.

Caroline Budget Includes Funding for 82 New Students

caroline
Caroline County Commissioners begin the budget process with a $46.6M proposal.

Caroline County, Maryland began its budget process with a hearing on the budget proposal for fiscal year 2018. As described by MyEasternShoreMd.com, most of the testimony at the hearing was to show gratitude for past funding and to ask for continued support.

The same was true in the area of education funding, which makes up a large portion of every county’s budget. From MyEasternShoreMd.com,

Erin Thornton, comptroller for Caroline County Public Schools, said the Caroline County Board of Education appreciated the commissioners’ continued support for maintenance of effort funding, a state law that requires local jurisdictions fund the same amount per student as the year before.

In FY18, Caroline County’s contribution to the local school system will increase by $221,000, due to an 82-student increase in enrollment this year, to $12.9 million.

Here are a few details from the proposal:

Total Operating Budget

  • Proposed General Fund budget for FY 2018 is $46.6M, a 2.5% increase from the FY17 adopted budget.

Education Funding

  • The proposed budget meets the maintenance of effort requirement of $12,858,628.

Taxes

  • No increase or decrease in taxes, however the differential increased for the town of Denton from 6 to 7 cents.

Government Employee Salaries

  • Caroline county employees will receive a 3% salary increase under the proposal.

For more information, see Caroline County’s Proposed Operating Budget and County holds first public budget hearing, tax differential meeting.

Garrett’s Budget Shows Modest Growth

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Garrett County’s budget proposal includes modest growth to an operating budget of $74.9 million.  

Garrett County’s fiscal year 2018 budget includes a slight increase in the county’s operating budget, and $2.7 million increase in capital funding from the fiscal year 2017 budget.

As described by the County government’s mission statement,
The mission of Garrett County Government is to provide our citizens the highest quality service in a timely, efficient, and courteous manner. . . To totally achieve this goal, this government must be operated in an open and accessible atmosphere, be based on comprehensive and strategic long-term and short-term planning, and have an appropriate managerial organization of fiscal responsibility.

Total General Fund Operating Budget

  • $74,875,707, an increase of $449,987 or 0.6%, from the FY17 general fund operating budget

Education Funding

  • At maintenance of effort

Taxes

  • No changes to taxes

Government Employee Salaries

  • 1% increase to scale

For more information, see Garrett County’s Budget Office.

Washington County’s Budget Proposal Benefits from Improving Tax Base

 

Screenshot 2017-05-18 16.24.30As described by Washington County’s Commissioners,

The 2018 Washington County budget totals $315,651,550 which is $15,093,010 or 5.02% above the 2017 approved budget. The budget was balanced based on the following changes and objectives:

  1. Increase in property tax assessable base
  2. Increases in local income tax revenue
  3. Educational funding
  4. Public safety funding
  5. Infrastructure and personnel

There were several issues which the County faced regarding the 2018 budgets. Main issues involved public safety, education, economic development initiatives, and infrastructure funding. In addition, the County is required to fund increases as a result of Federal and State mandates enacted over local governments. Reductions in Highway User revenue shares have also impacted the County’s road maintenance program. Emergency services have been and will continue to be a major issue facing the County in regards to service levels and funding. Even with these difficult and complex issues, the County still presents a budget that provides existing and new service levels with no increase in the property tax or income tax rates which have been held at the same rate for eighteen years.

Here is a snapshot of the proposed budget:

Total Operating General Fund Budget

  • $221.8 million, 4.75% more than the 2017 budget

Education Funding

  • Funded at the required maintenance of effort amount

Taxes

  • No change in tax rates

Government Employee Salaries

  •  5% employee COLA (cost of living adjustment), which is offset by retirement savings turnover

For more information, see the Citizen’s Guide to the Budget.

Talbot Proposal Overrides Property Tax Cap to Fund Education

 

As described by Talbot County, in the proposed Fiscal Year 2018 budget,

In order to fund expenses for the public school system, the Talbot County Council has proposed to override the voter imposed Property Tax Revenue Cap. This is authorized by State law in order to fund Education expenses only. This budget proposes to override the tax cap by $1,171,900, the increased amount over last year’s funding, which correlates to an increase of 1.59¢ in the Real Property Tax rate.

The county would still maintain two of the lowest tax rates (property and income) in the state, according to the budget presentation.

Screenshot 2017-05-18 16.03.01
Talbot County highlights it proposed property tax increase.

Here is a snapshot of the proposed budget:

Total General Fund Budget

  • $83.5 million, 5.18% increase from FY2017

Education Funding

  • Funds $1.1 million for education in non-recurring expenses in addition to the required maintenance of effort amount

Taxes

  • Proposes to override property tax revenue cap with an increase of 1.59 cents in the real property tax rate to fund education

Government Employee Salaries

  • Provides step increase for full time county employees

For more information, see:

FY 2018 Proposed Budget Summary

FY 2018 Budget Introduction PowerPoint

FY 20018 Proposed Budget Workbook

Queen Anne’s County Increases Employee Compensation in Budget Proposal

Screenshot 2017-05-18 15.24.35

As described by Queen Anne’s County, the proposed Fiscal Year 2018 budget includes the following personnel actions:

  • Employee Compensation Increase – 2% for county employees . . . [and]
  • Enhancements – 7 new full time positions

Here is a snapshot of the proposed budget:

Total Operating Budget

  • $133.8 million, 3.2% increase from FY2017

Education Funding

  • Funded at the required maintenance of effort amount

Taxes

  • No change in tax rates

Government Employee Salaries

  • 2% compensation increase for county employees

For more information, see the Queen Anne’s County budget proposal presentation.

Charles County Commissioners Pass FY 18 Budget With No Tax Increases

As reported by Charles County, Maryland,

On May 16, 2017, the Charles County Commissioners adopted the General Fund fiscal 2018 budget at $391,452,100, an increase of just 4.2 percent over fiscal 2017.  The balanced budget was adopted without raising property tax and income tax rates. Funding for education and public safety accounts for approximately 76 percent of the General Fund budget. The budget adoption also supports an investment in the County Government workforce, as well as a fiscal 2018 Capital Projects budget of $147,456,000.

Total General Fund Operating Budget

  • $391.5 million, 4.2% over fiscal 2017

Education Funding

  • Exceeds the education funding requirement by $4.7 million for employee step increases

Taxes

  • No tax increases

 

Government Employee Salaries

  • Funding for performance-based merit increases
charles
Charles County’s proposed budget provides additional education funding and no new taxes.

For more information, see additional information from Charles County’s Budget Office.

Baltimore Area Home Values On The Rise

The median sale price of a house in the Greater Baltimore Area – the City and surrounding counties – rose to its highest mark in nine years this April, according to a survey based on listing activity from real estate tracker MRIS. The median value of $255,500 marks an increase of 5.1 percent from the prior month, according to The Baltimore Business Journal. 

From the article:

Sales volume across the Baltimore area also increased in April, the survey showed. A total of $971.3 million in home sales was recorded, a year-over-year increase of 8.9 percent.

Residential closings were also up by 2 percent in April over last year’s data during the same month. There were a total of 3,264 closings.

The survey found that a total of 4,464 newly minted pending contracts were recorded last month, slightly below last April’s pending contract data of 4,853 during the same time.

A house in the Baltimore metro market has a 26-day median market stay, the lowest level since 2007, down from last year’s average of 41 days, the survey showed.

Route Fifty: More Mileage From Mileage Fees

The national gas tax has remained 18.4 cents per gallon since 1993, and despite recent comments by President Trump that he would entertain the possibility of raising the tax to fund infrastructure improvements, many remain unconvinced that movement will happen on that front anytime soon. Clearly the country’s infrastructure could use additional funding: the American Society of Civil Engineers recently graded the U.S.’s infrastructure with a D+, estimating that it would take an additional $2 trillion by 2025 to bring that grade to a B. States are picking up the slack, reports Route Fifty: more than twenty have raised their own gas taxes, while others have increased registration fees and tolls.

Route Fifty argues that the time has come to assess a mileage fee, or Vehicle Miles Traveled (VMT) Tax:

One possible solution—the mileage fee, or VMT tax—seems to be one whose time has come. The tax reorients the transportation “product” that users are paying for with a philosophy more in step with how people travel now. Simply put, drivers pay for their travel based on a per-mile rate. It’s almost like slapping a toll on every road, except that mileage could be measured and billed based on a low-fi transponder, or a high-tech piece of cellphone gadgetry. Drivers could alternatively pay through a one-time annual fee, if they hate the feeling of being “tracked.”

Mileage fees would still need to be kept up with inflation, but they wouldn’t be sensitive to gains in fuel efficiency. They could also be adjusted to reward environmentally sensitive vehicle choices, and policymakers could send chunks of VMT tax revenues towards transit investments, so the fees needn’t be punitive or regressive. …

A VMT tax attracts a politically diverse following: State DOT leaders and policy wonks love it, but so do libertarians at the Reason Foundation. And in many ways, taxing miles better matches the current transportation landscape: This is, after all, an era where technology is rewriting the rules on how people move, and how they relate to transportationMobility is evolving into a service, rather than a commodity, that can be summoned and paid for by an phone—whether by buying a subway ticket, locating a bike rental, or hailing a shared autonomous vehicle. A VMT tax matches that reality. It would be a true “user fee,” gathering dollars from those who drive on roads, without forcing those who get around using other modes to subsidize them (which the current transportation funding structure does, given how weak the gas tax has become).

Route Fifty calls out Oregon, California, Minnesota, Pennsylvania, Connecticut, New Hampshire, Delaware and Vermont for exploring mileage fees and taxes. Maryland’s General Assembly, on the other hand, considered legislation this past session to prohibit the state and counties from assessing a VMT tax, as it has for the previous two years. Senate Bill 284 died in committee.

Read the full article here.

Pew: Maryland Leader In Evaluating Tax Incentives

The Pew Charitable Trusts has named Maryland one of ten leading states in tax incentive evaluation, with plans for review of the effectiveness of its incentives, experience in producing quality evaluations, and process for informing policy choices. Pew lauds Maryland in its latest report, How States Are Improving Tax Incentives for Jobs and Growth: A national assessment of evaluation practices, issued this month.

From the report:

• Maryland is leading other states because it has a well-designed plan to regularly evaluate tax incentives, experience in producing quality evaluations that rigorously measure economic impact, and a process for informing policy choices.

• Lawmakers have used the evaluations to make improvement to incentives, including a tax credit for rehabilitating historic buildings.

• Since new incentives are not automatically added to Maryland’s review schedule, lawmakers will need to update the schedule periodically to ensure that it remains comprehensive.

Maryland first required tax credit evaluations under the Tax Credit Evaluation Act of 2012, which established a legislative process for evaluating certain credits. The Department of Legislative Services (DLS) is required to publish a report evaluating the tax credit. The report submitted by DLS must discuss (1) the purpose for which the tax credit was established; (2) whether the original intent of the tax credit is still appropriate; (3) whether the tax credit is meeting its objectives; (4) whether the goals of the tax credit could be more effectively carried out by other means; and (5) the cost of the tax credit to the State and local governments. The evaluation committee must hold a public hearing on the evaluation report, and is required to submit a report to the General Assembly that states whether or not the tax credit should be continued, with or without changes, or terminated.