MACo Supports Using BRF Funds for BNR Wastewater Treatment Plant Upgrades

MACo Legal and Policy Counsel Les Knapp testified in support of SB 343 before the Senate Education, Health and Environmental Affairs Committee on February 7, 2017.  The bill would expand the allowed uses of the Bay Restoration Fund’s (BRF) wastewater treatment plant account to include plant upgrades to biological nutrient removal (BNR). The bill was sponsored by Senator Adelaide “Addie” Eckardt. From MACo testimony:

When the BRF was created, one of the Fund’s primary purposes was to upgrade major wastewater treatment plants to enhanced nutrient removal (ENR) technology – the current best technology for reducing nitrogen and phosphorus.1 Now that Maryland’s major plants have been upgraded to ENR, BRF monies are targeting major-minor and minor plants for similar upgrades. However, some smaller plants lack BNR technology – the first level of nutrient removal – and the commensurate resources to make the upgrade to BNR in order to qualify for BRF assistance for ENR upgrades. Allowing BRF monies to be used for BNR as well as ENR upgrades makes sense now that the major plants have been upgraded.

Representatives from the Maryland Municipal League and the Town of Preston also testified in support of the bill. No one testified in opposition.

Useful Links

SB0343 of 2017

MACo Testimony on SB 343

Senator Eckardt Webpage

MACo Bill Tracking Tool

Composting Task Force Bill Has Favorable House Hearing

MACo Policy Associate Kevin Kinnally supported a yard and food waste composting and diversion study bill (HB 171) with amendments before the House Environment and Transportation Committee on February 8, 2017. The bill is sponsored by Delegate Shane Robinson.

The bill requires the Maryland Department of the Environment, in consultation with MACo and numerous other stakeholders, to make recommendations regarding a ways to increase use of composting and diversion of food and yard waste in the state. In his testimony, Kinnally noted MACo’s general support of composting and anaerobic digestion technologies but also requested five amendments that would both modify and expand the study’s scope. From the MACo testimony:

MACo has generally supported creating a regulatory climate that makes composting and anaerobic digestion practical activities in the state while not simply placing new mandates on county governments. As the bill acknowledges, flexible options are needed because, given Maryland’s diverse geography and demographics, a “one size fits all” approach will not yield successful results. …

The five changes would have the study:

  • Identify the infrastructure needs and challenges related to yard waste and food residuals composting and diversion unique to the different geographic regions of the state;
  • Identify any applicable sanitary and public health concerns related to yard waste and food residuals composting and diversion;
  • Develop, in consultation with local governments, model guidelines and best practices for the local identification of properties or development zones where diversion infrastructure may be developed instead of having MDE assume a land use role by making such identifications itself;
  • Consider a refuse disposal fee instead of automatically recommending such a fee; and
  • Receive the approval of the affected local governments before recommending a pilot food waste recovery program in the Elkridge and Jessup area.

The American Biogas Council, Institute for Maryland Self-Reliance, Compost Crew, and Maryland Farm Bureau testified in support of the bill. There was no opposition to the bill.

MACo Legal and Policy Counsel Les Knapp had previously offered the same amendments on the bill’s cross-file, SB 62, on January 24.

Useful Links

HB 171 of 2017

MACo Testimony on HB 171

Delegate Robinson Webpage

MACo Bill Tracking Tool

MACo Supports Reform of Recycling Facility Regulations

MACo Policy Associate Kevin Kinnally offered amendments to legislation (HB 124) that would allow the Maryland Department of the Environment (MDE) to create new regulations for recycling facilities before the House Environment and Transportation Committee on February 8, 2017. The bill was sponsored by MDE.

From MACo’s testimony:

HB 124 requires the Maryland Department of the Environment (MDE) to adopt regulations governing recycling facilities, in consultation with MACo and other key stakeholders. As materials recovery facilities (MRFs) sort and process recyclables collected through the single stream process, they are handling increasing amounts of what is currently defined as non-recyclable “solid waste.” Under current law, this could trigger the need for MRFs to apply for a solid waste disposal permit – an expensive and cumbersome requirement that was never intended to apply to them. HB 124 would allow MDE to adopt regulations to require recycling facilities like MRFs to meet reasonable public safety and health requirements while avoiding the need to apply for a solid waste permit.

Kinnally offered an clarifying amendment that would exclude residential recycling drop-off facilities from the bill’s definition of “recycling facilities.” MDE regarded the amendment as friendly. There was no opposition to the bill.

Useful Links

HB 124 of 2017

MACo Testimony on HB 124

MDE Website

MACo Bill Tracking Tool

DLS Suggesting Highway User “Swap” For General Fund Relief

As reported earlier today, the Department of Legislative Services (DLS) has recommended that the General Assembly eliminate the extra local transportation funds provided in the Governor’s proposed budget, to be distributed to local roads and bridges. They recommend only continuing funding current funding levels.

In a Senate budget subcommittee briefing, DLS staff indicated that they will be recommending using the Governor’s proposed “capital grants” to backfill a proposed cut to traditional formulaic highway user revenues to counties. They will propose diverting those funds to fill gaps in the General Fund supporting the Maryland State Police. More on those recommendations will apparently come later in subsequent budget hearings.

But what about the “lockbox” law that Maryland voters passed by referendum in 2013, prohibiting the use of Transportation Trust Fund transfers to balance the General Fund? Surely that protects diversion of highway user revenues, which flow from the Transportation Trust Fund?

No so. The “lockbox” law includes an exemption for highway user revenues. Under the Maryland Constitution,  Article III – Legislative Department,  Section 53:

[T]he funds in the Transportation Trust Fund may be used only:

(1) For the purpose of paying the principal of and interest on transportation bonds as they become due and payable; and

(2) After meeting debt service requirements for transportation bonds, for any lawful purpose related to the construction and maintenance of an adequate highway system in the State or any other purpose related to transportation. ….

This section does not apply to an allocation or use of highway user revenues for the counties, municipalities, or Baltimore City that is authorized under Title 8, Subtitle 4 of the Transportation Article[.]

At today’s hearing, Maryland Transportation Secretary Pete Rahn testified that he disagreed with the proposal, in part because it runs against the intent of the “lockbox” law. Did voters realize, when they voted for this Constitutional amendment, that it would not protect against raiding funds for local roads and bridges – 83 percent of the cited “highway system in the State?”

Seems unlikely.

Counties Nationwide Fight For A Local Infrastructure Fast Track

A Local Infrastructure Fast Track not only matters to Maryland counties, but to counties nationwide. Yesterday, the National Association of Counties (NACo) testified before the U.S. Senate Environment and Public Works Committee on modernizing the nation’s infrastructure system. NACo Representative Cindy Bobbitt, chair of the Grant County, Okla. Board of Commissioners, emphasized counties’ vast transportation infrastructure responsibilities. Counties own and maintain 45 percent of public road miles and nearly 40 percent of bridges, and are involved in a third of the nation’s public transportation systems and airports.

In Maryland, counties own and maintain 74 percent of the public roads. Local governments own and maintain 83 percent of our transportation network.

NACo reports:

[Bobbitt] noted that county infrastructure plays a critical role in moving freight and other goods to market, while modernizing industries, higher crop yields and new methods of energy extraction create immense stress on rural roads.

Additionally, Bobbitt underscored that the federal-state-local partnership on infrastructure, informed by county input, is crucial for economic competitiveness.

“Counties stand ready to work with our federal partners to achieve our shared goals — improving transportation, increasing public safety and boosting our economy,” she said.

Watch the testimony here:

DLS Analysts Recommend “Flat Funding” Local Road Funding, Again

The Department of Legislative Services has recommended that the General Assembly eliminate the extra “capital grants” provided in the Governor’s proposed budget, to be distributed to local roads and bridges. They recommend only funding the limited extra amount required to maintain current funding levels.

The DLS analysis of the Department of Transportation, Office of the Secretary includes these recommended reductions:

Baltimore City funding reduced from 5,484,423 to 2,000,000
County Governments reduced from 27,422,115 to 4,000,000
Municipal Governments reduced from 20,109,551 to 19,000,000

The analysis, and the presentation from the staff during the hearing, allude to future recommendations that may work in concert with this funding reduction to address technical concerns raised by DLS.

For further background on this county priority issue, and the DLS objections, see previous Conduit Street coverage: Highway User Revenues – What’s On The Table?

MACo Testimony Encourages Amendment to Electric Vehicle Bill

MACo Associate Director, Barbara Zektick, provided written testimony in opposition to Senate Bill 302, “Vehicle Laws – Plug-In Electric Drive Vehicles – Reserved Parking Spaces,”  before the Senate Judicial Proceedings Committee on February 7, 2017.

This bill would create a statewide scheme for enforcing parking spaces set aside for plug-in electric drive vehicles. Counties are concerned that the bill as introduced would unwisely limit enforcement options. However, the bill sponsor agreed to offer amendments that would address MACo’s concerns, allowing MACo to drop its opposition.

From MACo testimony:

MACo does not contest the effort to make this violation a statewide offense. In fact, many counties already enforce this under local laws. However, terms of the bill requiring local governments comply with towing provisions applicable to private parking lot owners under Subtitle 10A of Maryland Vehicle Law, Title 21, have the unintended consequence of prohibiting local governments from being able to enforce the terms of this bill in many cases.

MACo provided oral testimony on cross-filed House Bill 0036 when it was heard in the House Environment and Transportation Committee on January 26.

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

Howard Seeks To Improve Regional Transit System

The Regional Transportation Agency of Central Maryland plans to add new buses to its transit system serving Howard, Prince George’s, Anne Arundel and the City of Laurel, reports Mass Transit MagazineThe $2.5 million, 10-year lease-to-purchase contract would serve to replace aging buses from the late 1990s and 2000s which have long surpassed mileage thresholds and are driving up maintenance costs. From Mass Transit Magazine:

[Howard County Executive Allan] Kittleman is proposing to purchase seven EZ Rider buses by ElDorado, a company based in Riverside, Calif., through a cooperative purchasing program. The county can enter the program through an agreement under the Baltimore Metropolitan Council, a nonprofit organization of regional county executives Kittleman began chairing last month.

If approved by the County Council in March, the buses, which seat up to 33 passengers, could hit the streets by the end of 2017. Kittleman needs the Council’s approval because the agreement covers appropriations over a decade.

Searching for funding in the budget for transportation priorities is a major challenge, according to county officials. …

A draft county budget for next year includes around $4 million for another 10 buses to replace aging buses. Around $79,000 will come from Anne Arundel County, $45,000 from Prince George’s County and $278,000 from Howard County in the next fiscal year.

This spring, the county’s transportation office plans to identify gaps and underserved areas in the transit system as part of a five-year plan required by the state. The plan, last completed in 2009, is two years overdue because of limited state funding to finance the study.

[Howard County Transportation Director Clive] Graham hopes to shift the system from “one of last resort to one of choice.”

 

Highway User Revenues – What’s On The Table?

County governments, still feeling the permanent effects of devastating cutbacks to state roadway funding, have made restoring Highway User Revenues a perennial legislative priority.

In this article, we explain the Governor’s proposed funding in the FY 2018 budget, its components, and where it fits into the broader debate about a multi-year restoration back to historic funding levels.

Part 1 – Highway User Revenues, Deep Cuts Linger

Technically, Highway User Revenues (HUR) are not a budget line item, but rather they are a statutory distribution of the transportation revenues themselves. A share of fuel taxes and other transportation revenues, set by state law, is directed to local governments through the HUR formula. The dramatic drop in that funding is illustrated in the Department of Legislative Services’ “Overview of State Aid To Local Governments” below:

In the FY 2018 proposed budget, the Governor does not make any changes to Highway User Revenues per se. The distributions to local governments remain in place — 1.5% across 23 counties, and 0.4% across the municipalities. Because transportation revenues are expected to decline slightly, so will these local distributions (compared to the amount in FY 2017).

Part 2 – Extra Grants, Take One (FY 2016 and onward)

Given the Governor’s commitment to restore local road funding, he introduced a multi-year restoration bill during his first legislative session, in 2015. That bill failed, but the Governor has remained committed to the principle, and in his subsequent budget has introduced extra funding – in the budget, not by statute – to make comparable distributions.

2015-transp-grantsIn 2015, the Governor proposed a supplemental budget, with $25 million in new “transportation grants” to local governments. The essential effect of this extra funding was to keep funding flat for each of the three recipients of HUR (because municipal governments has previously received a special municipal-only grant from other sources, their share of the $25m was the largest). The General Assembly passed the budget with that funding intact – thereby creating a two-tier funding for local roadways, using a combination of Highway User Revenues (by statutory allocation) and Grants (by a budget line item). The grants were designated to be distributed (among municipalities and counties) according to the same formula as HUR, and their use was restricted to the same purposes as HUR funding. While they look different in the budget, these funds are effectively just an additional layer of HUR funding.

Part 3 – Extra Grants, Take Two (proposed for FY 17, and again for FY 18)

After the General Assembly did not pass legislation requiring a phase-in restoration of HUR, the Governor still followed through on his intention to fund incrementally more funds, beginning in FY 2017. The Governor proposed to do so by expanding the extra transportation grants, to effect the first year of the 8-year phase-in proposed in his own bill (HB 484 of 2015). This extra $28 million layer of funding was proposed to be distributed more in keeping with the traditional HUR formula:  $23.7m across 23 counties, $3.5m to Baltimore City, and $1.4m to municipalities.

During the 2016 legislative session, this funding was passed by the full Senate, and passed by the full House. However, in a surprise late-session decision, the conference committee appointed to resolve differences in the budget plan struck the final layer of grant funding — and the $28 million of new funds was struck from the budget, leaving only the “hold harmless” grants to continue for a second year.

fy18-proposed-transp-fundingThe Governor has responded by submitting a FY 2018 budget, once again, with the first installment of the phase-in funded as extra grants. The county-by-county detail on these grants is available online from the Department of Legislative Services.

The debate for the General Assembly, again this year, will primarily be the affordability of the “new capital grants” — the line in the chart at left totaling $28 million. That is the difference between a simple flat-funding budget and the first installment toward a multi-year restoration of local road funding – a top priority for MACo.

Is The Terminology “Capital Grants” A Problem?

At the February 1 meeting of MACo’s Legislative Committee, DLS Director Warren Deschenaux offered his opinion that the term “capital grants” for the extra transportation funding was a misnomer – in budgeting parlance, “capital” refers to buildings and permanent structures – and would not ordinarily include the sort of routine maintenance and repairs that constitute the bulk of local Highway User Revenues spending. This follows on similar concerns raised by the staff analysts during last year’s debate.

A solution exists, though, as recommended by the staff analysts:

To ensure adequate oversight by the General Assembly, it is recommended that language be added to the budget bill making the appropriation of this local transportation aid contingent on enactment of legislation modifying the HUR formula and authorizing transfer of the appropriation to the operating program of the State Highway Administration (SHA) to be distributed pursuant to changes made by that legislation.

In other words – eliminate the special capital grants, and simply add the extra distributions via the original statutory formula distribution of transportation revenues. This could be done for one year only, or in some ongoing basis. By placing the new revenues in the HUR statute, all the assurances and protections of that longstanding program would apply, and the full range of proper uses would be continued. The technical issue has a fairly simply solution – particularly in a year where a budget reconciliation bill is expected to be part of a final fiscal package.

The Road Ahead For The 2017 Session

MACo, the Maryland Municipal League, sympathetic legislators, and many other stakeholders who support the restoration of local roadway funds will focus on:

-retaining the funding level provided in the proposed FY 2018 budget

-pursuing a statutory change to lock in a multi-year restoration of funds back to historic levels

Highway User Revenue Restoration, With a “Trigger,” Gets MACo Support

MACo Execuitive Director Michael Sanderson testified in support of Senate Bill 161, “Transportation – Highway User Revenues – Allocation,”  before the Senate Budget and Taxation Committee on February 1, 2017.

This bill phases in restoration of highway user revenues to counties over seven years, provided that Transportation Trust Fund revenues exceed the most recent estimate of the Board of Revenue Estimates for the applicable fiscal year. INtroducing the bill, its sponsor Senator Steve Waugh expressed the need to “find an affordability trigger” to move the restoration forward – an element that has not been present in other similar proposals in recent years.

For more than 40 years, local roadways received 30% of highway user revenues (motor fuel tax and vehicle registration fees). The Great Recession forced cuts to this area deeper than those in any other component of the state budget. 23 counties’ share of funds plummeted from $282 million in 2007 to only $27 million today. Baltimore City alone now receives $85 million less each year than before the cuts. The cumulative loss of local roadway investment since Fiscal 2010 is nearly $3 billion.

From MACo testimony:

Highway user revenues fund roads and bridges throughout our entire state, through an equitable, time-tested formula based on road mileage and vehicle registrations. This touches the roads our kids ride to school, the roads our first responders travel to keep us safe, and the roads where we all live. SB 161 begins to bring transportation dollars back to 83% of the roads and bridges in Maryland, and brings transportation dollars back to everyone’s home. SB 161 offers a path to restore these desperately needed funds, with a contingency based on ongoing revenue strength.

Maryland’s 23 counties and Baltimore City identified reinvestment in local roads, bridges, and infrastructure as one of their top legislative initiatives this Session. All 24 jurisdictions – of varying sizes, budgets, and regions – are united in the need for a Local Infrastructure Fast Track for Maryland (LIFT 4 MD).

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