Prevailing Wages For TIFs Bill Dies In Committee

The House Economic Matters Committee has killed a bill which would have made it more difficult for counties to use tax increment financing (TIFs). HB 466 – Prevailing Wage – Tax Increment Financing Developments – Application would have required payment of prevailing wages on construction contracts receiving any funds from TIF bond proceeds.

Counties had concerns that the bill would drive up costs of public infrastructure projects, stifle use of a demonstrably successful economic development tool, and squeeze out small businesses from participating in infrastructure construction projects. In addition, it unfairly applies prevailing wage requirements to certain projects receiving TIF bond proceeds when those projects would not otherwise have to comply even if financed with other public funds.

MACo testified on the Senate crossfile, SB 870, on March 16 in the the Senate Finance Committee. From MACo’s testimony:

TIFs are a demonstrably successful economic development tool that enables counties to finance public infrastructure improvements using future property tax revenues associated with the new development. These are revenues which the county would not receive at all unless the development came to fruition. Creating a viable TIF district and development plan requires careful financial planning and forecasting to ensure that the future tax revenues received from the project more than cover expenditures on the infrastructure required to support that development. In general, counties will only use this tool if the development is not financially viable without the benefit of the TIF; in other words, if the numbers do not add up, the county does not issue the TIF bond, and the development never happens.

….This bill will significantly raise costs for development projects funded with TIF bonds. If costs are raised over and above what the development will return in future tax revenues, the county will not issue the TIF because it is not economically viable. This generally prevents the development from occurring, sacrificing blight elimination, job creation, targeted economic development, and growth to the taxable base.

 

Bill to Offset Declining Enrollment Moving in Legislature

House Bill 684, “Education – Grant for Declining Education Aid,” has passed the full House and crossed over to the Senate. MACo supports HB 684, which would help to offset the sudden drop-off in education funding to jurisdictions with declining enrollment, ensuring school systems can offer equivalent courses and programs, even with fewer students.

The bill was amended to allow jurisdictions with declining enrollment average their student populations over three years, rather than account for single-year changes, and allow them to factor all-day pre-K student populations into total enrollment. The House Appropriations Committee also amended the bill to provide grant funding for three years instead of just for one year, as was originally proposed.

Five Jurisdictions–Baltimore City, Calvert County, Carroll County, Garrett County, and Talbot County–are slated to lose a combined $45M in state education funding in 2018. Baltimore City is the most deeply affected, with a $38m loss in year-to-year total state education funds.

From the MACo testimony,

Counties value public education as a high priority, and an essential service and benefit to the citizens and the economy. State Budgeting formulas and requirements complicate this commitment, especially because nearly all state education funding is distributed on a per-pupil basis, meaning that the more students a school system serves, the more funding it receives.

By contrast, when the number of students declines, schools can experience a sudden drop in funding. This dynamic can strain local budgets – reflecting the reality that not every dollar spent in a school system is truly a “variable cost.” A sudden drop in students across a county school system may mean some cost savings in bus transportation and meals service – but may not have any effect on “fixed costs,” which account for most system-wide expenditures on education and administration.

To learn more about Maryland’s school budgeting formula, read “Why do Five Jurisdictions Lose $45M in Education Funds?” on MACo’s Conduit Street Blog.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Both Chambers Move To Streamline County Procurement Requirement

Both chambers of the Maryland General Assembly have passed SB 632/HB 118 – Election Law – Persons Doing Public Business – Reporting by Governmental Entities, a bill that simplifies a campaign finance/procurement law mandate on counties. MACo testified in support of the bill with Kathleen Boucher of Montgomery County’s Intergovernmental Relations Office on February 7 in the House Ways and Means Committee and again on February 23 in the Senate Education, Health, and Environmental Affairs Committee. Both committee passed their respective bills with technical amendments.

The bill repeals the requirement that state and local procurement officials notify the State Board of Elections if awardees of contracts worth $200,000 or more fail to file requisite campaign finance disclosures with that State Board. Instead, it requires those government entities to provide the Board with a list of all individuals and entities receiving contracts worth $200,000 or more who are required to file the subject disclosures.

From MACo testimony:

The Campaign Finance Reform Act of 2013 sought to reduce the risk of “pay to play” activities influencing government contracting – and by streamlining enforcement procedures, this bill helps to further those goals. This bill removes the “middle man” from an enforcement role it is unable to effectively accomplish. Recipients of government contracts worth $200,000 or more are currently required to file statements of political contributions with the State Board. The provision of existing law addressed in this bill holds state and local procurement officers responsible for (1) requiring that the applicable contract awardees certify that they have made their requisite disclosure filings with the State Board, and (2) notifying the State Board if those awardees actually fail to make the requisite filings.

Regarding that latter requirement, procurement officers do not actually have the means to verify whether their contractors have filed the requisite disclosures with the State Board – the State Board has that information. Instead, this bill requires state and local government entities to file a list of applicable contract awardees with the State Board, returning enforcement obligations to the Board which is supposed to receive the campaign finance disclosures in the first place.

 

Body Camera Legislation Defeated in Senate Committee

In a surprise move, the Senate Judicial Proceedings Committee defeated MACo’s initiative bill to refine what footage from police body-worn cameras could be released under the Maryland Public Information Act. MACo’s bill, described by many as a “near consensus,” had sought to limit the worst-case scenario of a broad, untargeted request for footage that could prove costly and cumbersome to prepare for distribution.

HB 767, Sponsored by Delegate Sydnor, passed the House of Delegates with a comfortable bipartisan majority, but that bill and its Senate cross-file SB 970 were debated in the Senate Committee and ultimately rejected by nearly the full Committee membership. That vote spells the end of the debate on this issue for the session, and potentially for good.

A similar fate befell MACo’s bills in the 2016 session, when the House made modest amendments and passed the bill. The Senate committee, citing an extraordinary workload from other high profile legislation, did not focus on the body camera bills and they died without a formal vote, for lack of action.

 

Legislation to Close Gap in Teachers’ Pensions Moving in House and Senate

A bill which addresses the shortfall in funding required to meet the portion of Maryland state teacher pension costs that exceed costs anticipated during the 2012 “pension shift” is on the move in the General Assembly. House Bill 1109 / Senate Bill 1001, “Teachers’ Retirement and Pension Systems – County Boards of Education Payments,” passed both the House and Senate and have now crossed over to be heard in the opposite chamber.

The actual normal costs of teacher pensions in fiscal year 2017 are approximately $19.7 million more than the amount that local school boards were estimated to provide in legislation passed by the General Assembly in 2012.

The additional funding required in fiscal year 2017 is mainly attributable to changes outside of the control of local school boards. At the same time, absorbing this additional cost in fiscal year 2017 could put pressure on school board budgets, and county governments who provide much of their funding.

The amendments allow the state to pay the difference in either FY 2018 or FY 2019.

MACo joined the Maryland Association of Boards of Education in supporting the bill.

Useful Links

MACo testimony on HB 1109 / SB 1001

For more on 2017 MACo legislation, visit the Legislative Database

Community College Collective Bargaining Bill Remains in Committee

Neither the Senate Finance Committee nor the House Appropriations Committee has taken action on a prescriptive, one-size-fits-all collective bargaining bill that would affect all Maryland community colleges. HB 871 / SB 652 failed to move prior to yesterday’s “crossover” deadline, and bills passed out from now on go to the Rules Committee of the second chamber, a procedural hurdle impeding their chances of final passage.

Counties oppose the one-size-fits-all approach of HB 871 / SB 652, which limits local decision-making. The move to collective bargaining outlined in this bill could create potentially unsustainable costs for counties, who provide substantial funding for community colleges throughout Maryland – especially since the legislation does not envision any added State support.

From the MACo testimony,

Despite counties’ role in supporting community colleges, this legislation would not provide any opportunity for county governments to participate in collective bargaining negotiations. The combination of these effects – State-imposed system and costs, no county participation in bargaining, and no additional State funding – is simply not affordable as a statewide county mandate and could present substantial budget difficulties.

MACo opposed identical legislation in past sessions of the General Assembly. Click here for previous Conduit Street coverage.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Local Collective Bargaining Mandate Misses “Crossover” Deadline

A bill 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, has not moved out of the House Appropriations Committee. HB 1370 failed to move prior to yesterday’s “crossover” deadline, and bills passed out from now on go to the Rules Committee of the second chamber, a procedural hurdle impeding their chances of final passage.

MACo opposed the bill, as it mandates a prescriptive, one-size-fits-all design that would expand collective bargaining rights in a third of Maryland’s counties.

From the MACo testimony,

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.

Useful Links

2016 Bill: HB 736

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

Local Preemption Bill Dies in Committee

A bill that would prohibit counties and municipalities from increasing wages and benefits above state levels has died in the House Economic Matters Committee.

MACo opposed the one-size-fits-all approach of HB 317, which limits local decision-making. The preemption of local authority outlined in this bill would significantly undermine a local government’s ability to implement policies that reflect the diversity of local economies.

Useful Links

Previous Conduit Street Coverage: MACo, Counties Defend Autonomy On Labor Issues

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Sick Leave Legislation Heading to Conference Committee

Both the House and Senate have passed sick and safe leave legislation with veto proof majorities. The bills would require Maryland employers to provide paid sick and safe leave for many of their employees. However, since SB 230 and HB 1 are not identical, the differences are likely to be worked out in a conference committee in the coming days.

The bill would also require county governments to provide sick leave to all employees. While county governments generally provide generous benefits, at a much higher rate than the legislation would require, MACo opposed the legislation, raising concerns about the bill’s potential effects on provision of emergency and essential services and with the bill’s broad requirements for providing leave to part-time, seasonal, and contractual employees in the same manner as full-time employees.

Useful Links

MACo testimony on SB 230

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

“Trust Act” Limiting Local Engagement on Immigration on the Move

HB 1362, a bill that would set explicit parameters limiting state and local agencies and officials from cooperating with federal immigration efforts, has passed out of the House with amendments. It will move on to the Senate where the Judicial Proceedings Committee has not yet taken any action on the crossfile SB 835. An article in The Baltimore Sun notes Governor Hogan as saying he would veto the bill.

MACo opposed the bill at it imposes stringent limitations on local government autonomy that have far-reaching and significant consequences.

Prior coverage on Conduit Street: MACo: Don’t Impose Limitation on Local Law Enforcement

Related coverage:

Revised immigration trust act moves forward in House (The Baltimore Sun)

As counties move to help immigration officials, Maryland lawmakers weigh policy change (The Baltimore Sun)

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