Saturday Marks Beginning For New Tax Laws

While most legislation passed by the General Assembly this past session becomes effective October 1st, a few new tax laws – including a noteworthy income tax deduction bill that will erode both state and county income tax revenues – become effective on July 1st.

Senate Bill 597/House Bill 100, referred to colloquially as the “Hometown Heroes Act” and substantially similar to the Administration’s Senate Bill 322/House Bill 388 of that name, provides for a subtraction modification for the first $15,000 of retirement income for individuals at least 55 years of age who are retired law enforcement officers or fire, rescue, or emergency services personnel. MACo opposed this legislation on the grounds that it would cause local revenues to decrease by $2.5 million in FY 2018 and by $2.8 million in FY 2022. After many years of consideration by the legislature, the bill passed this year and the Governor signed it – making the tax deduction available for the 2017 tax year.  Bill Information | MACo Coverage

A new law repealing the requirement that local governments reimburse the Local Income Tax Reserve Account for overpayments of local income tax revenue distributions made by the Comptroller also goes into effect July 1. Senate Bill 397/House Bill 1433 allows for funds to be drawn from the Account, rather than local government budgets, to rectify errors for which they are not responsible. The Governor signed the bill on May 25. Bill Information | MACo Coverage

In addition, a new law proposed by Comptroller Franchot aimed at protecting taxpayers against fraud and identity theft becomes effective July 1. The Taxpayer Protection Act strengthens the Comptroller’s enforcement powers against fraudulent tax filers. MACo did not take a position on Senate Bill 304/House Bill 424. Bill Information

Dozens of other bills also take effect July 1, including new laws to foster opioid education programs, increase the barrel limit for craft breweries, and ensure state funding for Planned Parenthood in the event that the federal government cuts its own support. The Frederick News-Post covers the slew of new laws going into effect this weekend.


Will You Throw the First Pitch?

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Step up and share your county’s IT needs at MACo’s Summer Conference.

This year’s MACo Conference offers attendees an opportunity to voice county government information technology interests directly to private sector providers in an informal, informational format.

Share challenges & discover capabilities in this new Tech Wednesday offering.

SWITCH PITCH” IGNITE! — Meet Your Match: Solutions to County IT Challenges

Wednesday, August 16, 2017

11:30 am – 12:30 pm

Gain quick insight into what tech can do for county governments in this fast-paced session. County IT and management professionals will state their needs, and vendors in the Tech Expo Tradeshow will respond with their pitch for solving the top tech issues. Attendees will get a chance to learn a little about a lot of vendors in a short period of time. Listen and learn!

Example County Pitches

  1. How do I empower employees to work from home in a secure and productive manner at minimal cost to the County?
  2. There are so many mobile apps in the market. Other than reading through the reviews, how can one determine the overall quality of a mobile app?  Is there a standard to check an app’s quality? What is it?
  3. What and where have been some of the more successful public/private partnerships providing broadband to unserved rural areas?

SIGN UP HERE TO BE A PART OF THIS SESSION Space is limited – Reply by July 19.

Have a pitch, but you are not attending this session?  Contact Robin Clark Eilenberg at MACo.

Tech Wednesday Vendor List

  • AVI-SPL, Inc
  • CDW-G
  • Comcast
  • Commvault
  • Cybersecurity Association of Maryland, Inc.
  • Data Networks of America
  • ePlus Technology Inc.
  • Esri
  • Freedom Broadband
  • Fujitsu America, Inc.
  • GovDeals, Inc.
  • Juniper Networks
  • Lenovo
  • Maryland Department of Natural Resources
  • Maryland Libraries
  • Maryland Relay
  • Motorola Solutions, Inc.
  • Musco Sports Lighting
  • NIC Maryland
  • Phillips Office Solutions
  • Presidio
  • Prosys Information Systems
  • Regent Development Consulting, Inc. (RDC)
  • Ricoh USA, Inc.
  • Rimkus Consulting Group, Inc.
  • Rudolph’s Office & Computer Supply, Inc.
  • SAIC
  • ShoreScan Solutions
  • Splunk
  • Sprint
  • Supply Solutions, LLC
  • Tomi Environmental Solutions

Learn more about MACo’s Summer Conference:

Comptroller Warns About Prepaid Debit Card Tax Scam

Maryland Comptroller Peter Franchot warned about a new federal tax scam involving the use of prepaid debit cards in a recent news release (2017-06-15). From the news release:

Comptroller Peter Franchot is warning taxpayers about a new scam linked to the Internal Revenue Services’ Electronic Federal Tax Payment System (EFTPS) in which fraudsters call to demand immediate tax payment through a prepaid debit card. The scam is being reported throughout the country.In this latest scheme, a caller claims to be from the IRS and tells the victim about two certified letters purportedly sent to the taxpayer in the mail but returned as undeliverable.

The scam artist then threatens arrest if a payment is not made through a prepaid debit card. The scammer also tells the victim that the card is linked to the EFTPS system when it is actually entirely controlled by the scammer. The victim also is warned not to contact their tax preparer, an attorney or their local IRS office until after the tax payment is made.

“If you get a call like this, the best thing is to simply hang up. Do not share your personal or identifying information and do not send a prepaid debit card,” Comptroller Peter Franchot said. “My agency stands ready to help any Maryland taxpayer who gets a call like this. My agents are united in our goal to protect our citizens from con artists who want to steal your money and your private financial information.”

The EFTPS is an automated system for paying federal taxes electronically using the Internet or via phone and does not require the purchase of a prepaid debit card. Since it is an automated system, taxpayers won’t receive a call from the IRS. Taxpayers also have several options for paying a real tax bill – not just a specific one.

“This is a new twist to an old scam,” said IRS Commissioner John Koskinen. “Just because tax season is over, scams and schemes do not take the summer off. People should stay vigilant against IRS impersonation scams. People should remember that the first contact they receive from IRS will not be through a random, threatening phone call.”

The Comptroller’s Office advises taxpayers not to reply to phone calls or emails asking for confidential information, most especially Social Security numbers, birth dates, salary information or home addresses. Maryland taxpayers may call 1-800-MD-TAXES or send an email to to report a problem.

Debate Continues Over Frederick Hotel & Conference Center

State funding for a hotel and conference center in downtown Frederick sparked a controversial floor debate in the Maryland Senate this past session.  The state approved granting $4 million for the Downtown Frederick Hotel and Conference Center, leading to Frederick County’s own Senator Michael Hough voting “nay,” alone, on the entire capital budget.

Michael Dresser reports in today’s Baltimore Sun that the public funding for the project – $31 million in total, including state, county and city sources – still requires a number of state and local approvals, including sign-off by the State Board of Public Works. It appears the debate over the project is far from over. From the article:

State Sen. Ronald N. Young, a Frederick County Democrat, said the project is a priority for the city’s growing high-tech and biotech business sector.

“They think they can do international conferences here. They need a first-class hotel,” he said. “It’ll definitely spark other businesses in the area.”

But to others, the project is a colossal boondoggle. These opponents say it’s a textbook example of crony capitalism — a subsidy for wealthy developers. They say it would be out of scale in the historic downtown and would require the demolition of at least one historic building.

State Sen. Michael J. Hough, Frederick County’s other senator, compares the project to the Rocky Gap resort in Western Maryland and the Hyatt Regency in Cambridge — two money-losing ventures in which the state invested two decades ago.

“I’m not exactly sure why the state is still investing in hotels, given our track record,” the Republican lawmaker said. Rocky Gap lost money for years before casino gambling was permitted there under new ownership. The Cambridge resort continues to lose money, according to the Department of Legislative Services, but the state was repaid in 2006 and local officials insist it has stimulated growth in that Eastern Shore city.

A majority of the Frederick County delegation to the General Assembly opposed spending state money on the hotel project, but Young persuaded his fellow Senate Democrats to insert the expenditure in the capital budget. The Senate prevailed in negotiations with the House, and Gov. Larry Hogan did not contest the decision.

Even without most of the delegation, the project has powerful local support. The city government, led by Republican Mayor Randy McClement, is on board. The county executive, Democrat Jan Gardner, backs it. The Frederick County Chamber of Commerce and other local business groups have it on their wish lists.

“We believe it’s the next real game-changer for our community — not a boondoggle,” said John Fieseler, executive director of the Tourism Council of Frederick County. He said accommodations downtown are limited; the few bed and breakfasts are always full.

The Maryland Public Policy Institute, a nonpartisan public policy research and education organization whose mission is “to formulate and promote public policies at all levels of government based on principles of free enterprise, limited government, and civil society,” penned a not-too-positive report on the potential deal last September.

The Institute reports that the deal would distort the hospitality market in the Frederick area; raise hotel taxes on other hotels; “rewards political skill, not business acumen”; may violate the state law giving the county the authority to impose the hotel tax; provides full-service hotel benefits that jeopardize business opportunities for neighboring eating, drinking and other service establishments; and gives too much administrative authority to the county tourism council, which it reports is “a trade group comprising some 300 members engaged in visitor businesses.”

Additionally, it cites:

Heywood Sanders, a professor of public administration at the University of Texas, San Antonio who specializes in hotels and convention centers, says upscale, full-service conference center hotels almost never make financial sense in the downtown of small cities like Frederick. The extra costs involved, both in capital expenditure and operations, just aren’t justified by any extra revenue they generate. The many activities involved in a full-service hotel are also very difficult to manage, he says. However, the bigger problem for Frederick is that the hotel’s anticipated top customer, the federal government, limits “per diem” lodging rates to about $100 and mandates that they will only be paid if the lodging is at least 50 miles from employees’ workplaces. The proposed upscale hotel is aiming at $160 per night rooms, and Frederick is a scant 43 miles from the White House.

The Baltimore Sun refers to the City of Frederick’s economic development director:

Richard Griffin, economic development director for the city, said the opposition to the hotel, “although very expressive,” is small. He said the project is expected to bring 280 jobs and have $26 million in annual economic impact.

Griffin said public-private partnerships are typical for such projects. He pointed to a Marriott hotel-conference center built in North Bethesda with state help and regarded as a success.

“Everyone’s waiting for this project to get going so they can jump in and begin the process of the full realization of the east side of downtown,” he said.

Howard Extends Tax Credit Promoting Green Homes

Howard County has extended its green building tax credit for another five years. County Executive Allan Kittleman signed into law legislation extending the property tax credits for residential “high performance” buildings, in an effort to continue encouraging sustainable building practices for new residential construction and remodeling projects. To qualify for the credit of up to $5,000 per property, the residential properties must receive LEED certification at the Silver level or higher from the U.S. Green Building Council and applications must be submitted prior to April 1, 2022.

From the county’s press release:

“The residential High Performance Building Credit program has been successful in promoting sustainable building as 134 residents have purchased ‘green’ homes and received the tax credit, said Kittleman. “In Howard County, we want to continue that momentum in a sustainable and economically viable way.”

Joshua Greenfeld, Vice President of Government Affairs for the Maryland Building Industry Association, commented, “By going through the process of designing homes to the LEED standards, builders learn about green building technology and it becomes more main stream and accepted while providing homeowners a great product at a price they can afford. This is a win for the county and for homeowners. We applaud County Executive Kittleman in his support of this very important program.”

BPW Boss: Smart Meters Will Improve Baltimore Water Billing System Within the Year

The head of Baltimore’s water department told City Council members Wednesday that he expects the problem of disputed water bills to be greatly improved next year thanks to the rollout of smart-meter technology.

As Reported in The Baltimore Sun,

Rudy Chow, the city’s director of public works, told the council’s Budget and Appropriations Committee that the department has progressed significantly in his six years running it.

“We are making a tremendous amount of progress in terms of getting ourselves into a steady state where water billing isn’t a problem on the technology end or customer service,” he said.

The city introduced new meters in October that can measure how much water a customer uses hour by hour and beam back information to the water department wirelessly. It also began sending customers monthly bills at that time. Previously, the department’s crews were deployed to read meters every three months.

Read the full article for more information.

Council Approves “Surprise” Tax Cut In Wicomico

During its Thursday evening work session, the Wicomico County Council approved a series of spending cuts to enable a 1.1 cent reduction in the county property tax rate – the first such reduction in many years.

From coverage in the Salisbury Independent:

The County Charter allows the Wicomico Council to cut a County Executive’s proposed spending plan, and the seven members did just that on Thursday night, removing $684,783 from the fiscal 2018 budget.

Their unanimous actions mean county property owners will receive their first tax cut in recent memory, lowering the property tax rate by slightly more than a penny, down from the current 0.9516 cents per $100 to 0.9398 cents.

In a budget session unlike any since the creation of the County Executive form of government, council members appeared to arrive for Thursday’s session determined to cut some spending, reduce the amount of dollars the county places each year in its contingency fund and give cash to several priority school projects that were left out of the Board of Education budget.

The Council is scheduled to meet on May 30 and formally adopt its revised budget plan.

Quick County Update on Federal Issues

On this morning’s call of counties from the northeastern United States, National Association of Counties Legislative Director Deborah Cox and Health Policy Director Brian Bowden provided the following updates:

The President’s Fiscal Year 2018 Budget

The President’s full budget request for Fiscal Year 2018 (October 1, 2017-September 30, 2018) came out yesterday. It is a couple of thousand pages, and NACo is reviewing it for a full analysis to be released later this week. Similar to what was seen in the initial proposal, however, there are many programs cut that would negatively affect county governments. These range from rural development grant cuts to the elimination of Community Development Block Grants for urban areas, and others [for more see Trump’s Proposed Budget Eliminates 66 Programs, Including “CDBG” and NACo’s Statement on the President’s Proposed FY 2018 Budget].

NACo’s Deborah Cox stressed that this is just a budget proposal. The next step is that the House and Senate determine the total amount of funding in the budget before moving on to its composition. For more information, see this Guide to the Federal Budget Process.

Healthcare Reform Efforts: All Eyes on the Senate

National Association of Counties Health Policy Director Brian Bowden updates that the House passed the American Healthcare Act. Under the Act, states may waive out of several of the ACA requirements. Also, a late-coming amendment to the bill created a high-risk pool modification to accommodate pre-existing condition concerns. In his update, Bowden noted the emotional appeal by Jimmy Kimmel on pre-existing conditions prior to the legislation’s passage.

At this point, all eyes turn to the Senate, where the bill faces stricter procedural rules and different policy dynamics—and therefore is expected to be changed significantly. The Congressional Budget Office is expected to release a score on the House-passed measure today, allowing the Senate to officially move forward.

The Latest on Tax Reform

The house is completely focused on tax reform now that they have passed their healthcare legislation. Tax reform has been a top priority of Speaker Ryan.

NACo provided context for tax reform and the dramatic effect it could have on county fiscal health: while many of the issues that NACo tracks are in the billions as far as potential effects on county governments, the effects of tax reform could be in the trillions of dollars. The municipal bond tax deduction and state and local tax deductions are longstanding provisions of the tax code that have been a part of the partnership between the federal government and local governments for years. But, they are again part of the tax reform discussions going on in the House now.

Over the next few days, NACo will release more detailed analysis of the President’s proposed budget and its effect on counties. Stay tuned to Conduit Street for more.

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(toll free): 1-888-757-2790

Guest Passcode: 299194



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 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, 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,

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.


  • 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.