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As Long as We Remember...

April 19, 2012

Wrapping Up The Session Part 1

Joan Marie Aquilino

Much of what follows is be bits and pieces from those I trust to help me share some of what has taken place in the General Assembly during this just concluded 2012 session of the Maryland General Assembly.


The main reason I’m posting it this way is because so many have asked and this is the most concise and accurate way I know to share it with you.


The Republican Caucus and Del. Kelly Schulz (R., Frederick 4-A) are the source of much of this. I hope this offers some clarity of a few things, hopefully not to be revisited anytime soon. Enough damage was done and Maryland taxpayers need a break from its meddling in our pocket change, which is all that is left for many of us. The cost alone of convening a Special Session will be yet another tax on you.


Stop the madness and let your governor and legislators know that Enough is Enough and to leave the taxpayers alone.


Budget/Fiscal Issues


Over the last several years, while Maryland’s families have had to figure out how to do more with less, Annapolis has been doing more with more. Taxes, tolls, and fees have increased multiple times since Gov. Martin O’Malley came to office. Spending has increased by more than over $1 billion every year. This year was no exception.


Governor O’Malley’s budget as proposed included over $300 million in higher taxes and fees, and shifted the costs of teacher pensions to the counties, all but guaranteeing a tax increase on the local level as well.


Again this year, the House Republican Caucus offered a budget alternative that rejected tax increases and rejected shifting the pension burden to county governments. This level-headed, level-funded approach maintained spending at FY 2011 levels for most programs. This proposed budget alternative forced Maryland government to live within its means just like our citizens do. Unfortunately, this alternative was rejected in favor of perpetuating Maryland’s tax and spend cycle. Things did not go as planned, however.


In the last days of session, posturing by the Democratic leadership in the House and the Senate led to a stalemate that went unresolved. With a compromise not reached by midnight on Sine Die, the budget passed but the revenue measures didn’t.


The contingency language in the budget left it balanced due to automatic reductions that would kick in if the revenue package and pension shifts did not pass. Coined by Democrats as the “Doomsday Budget,” these reductions include many things the House Republican Caucus has advocated for over the last few years including cutting GCEI, eliminating funding for stem cell research, and eliminating the senatorial and delegate scholarship programs.


The governor proposed shifting the cost of teacher pensions to county governments as a part of his overall budget plan. The governor, the House, and the Senate all had different ideas on how to accomplish this. The teacher pension shift was a part of the Budget Reconciliation and Financing Act (BRFA), which did not pass. So, as it stands right now, pension costs will not be shifted to the counties.


Like the pension shift differences between the House and Senate on exactly how to increase taxes came down to the last minutes of session. The basic idea was to increase income taxes and limit exemptions for those making over $100,000/year. However, time ran out before the conference committee could report the ultimate compromise and the tax increases, fee hikes and pension shifts that were a part of the budget proposal did not pass.


Business & Economics


SB 358 – Public Private Partnerships, commonly referred to as the “P3” bill, establishes a state policy on the use of public private partnerships.


While public-private partnerships can be successful, and have been beneficial in many circumstances, this bill drew many concerns. First, the bill significantly changes the manner in which procurement is handled in Maryland. In addition, the bill would give private industries the ability to set and increase tolls on roads or bridges they may build with no government oversight or input.


Also under the bill, any projects that receive a portion of state money would require unionized employees to do the work. There were also serious concerns of combining corporate finances with the state’s ability to take property under eminent domain. The amended bill passed the House 91-45 but the Senate did not review the amendments before midnight so the bill failed.


HB 443 – Maryland Health Benefit Exchange Act of 2012 is Maryland’s first step in enacting the federal Affordable Healthcare Act (“Obamacare”).


The bill creates a Health Benefit Exchange, a website that allows individuals and businesses to shop for health insurance online. The governor’s proposed FY13 budget includes $26.5 million in funding for the Exchange.


This legislation expands the scope of the exchange by establishing the Small Business Health Options Program (SHOP) and navigator programs for the business and individual exchanges. Navigators will be licensed or certified personnel that assist individuals and businesses in making insurance choices from qualified plans.


Although the intent of the exchange is to make health insurance more accessible and affordable, there are many concerns primarily related to the cost to taxpayers. There are also religious liberty concerns, fear that fewer doctors will be willing to accept Medicaid patients, and the current debate over constitutionality.


Maryland has committed to the exchange whether or not the Obamacare is ruled constitutional. The exchange promises higher taxes, higher federal deficits and will not eliminate the problem of uninsured residents. The bill passed the House 94-44, and the Senate 35-11.




SB 848 – Education – This legislation alters the waiver process for the Maintenance of Effort (MOE) requirement and could have devastating impacts on county budgets.


Passed in 1984, MOE requires local governments to provide local school boards with a constant level of per-pupil funding. In 1996, a waiver provision was added to allow counties to apply to the State Board of Education for partial or temporary waivers from the MOE requirement.


The waiver provision was not used until 2009 when a combination of the economic downturn and cuts in other state funding put serious strain on county budgets. SB 848 changes the waiver process and allows the state to intercept a county’s local income tax revenues if it is denied a waiver.


Another problem with SB 848 is that it discourages local government funding at a higher level in better fiscal times. When counties fund above the MOE level, they do not receive credit. Instead that amount is added to the total amount they owe the following year. This constantly ratchets up spending without any additional accountability and is a disincentive for counties to ever give more when times are good.


The bill may also give the state the authority to override county tax caps passed by referendum – a tremendous overreach of government. Having already passed the Senate by a vote of 32-14, the bill passed the House 93-44.


Tomorrow we’ll look at Natural Resources & Energy, Courts and Civil Issues, and the Middletown Wine Festival License.


. . . . .'til then . . .


As always, I’d love to hear from you; so, let me know what’s on your mind by emailing, or contacting me directly at


“Just Joan” saying, be safe and “don’t believe everything you think.”


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