Since I spent the past two weeks reporting on all Kirwan, I wanted to catch you up on our long list of bills that MACo did discuss and take positions on. There really is legislation outside of Education spending and the Sales and Service tax hike, but you will see that many of these bills do tie back in to the big education bill!
Did you think that property tax was a flat rate? This bill, HB1276, “County Property Tax – Classifications of Real Property and Authority to Set Special Rates” may change that. This authorizes a county to set special property tax rates on any sub-class of real property. Properties such as agriculture land, marsh land, small and large commercial properties, industrial, residential condos/rentals and residential greater than 5000 square feet. While counties could theoretically charge a lower rate, a county could also charge a higher property tax rate. This could mean having “progressive” property tax rates. MACo supported the bill because it “authorizes” county control, however, it’s just another way to raise taxes to pay for Kirwan.
A bill that could tax some Marylanders even more is HB1494, “County Income Tax – Maximum Rate and Authority to Impose on an Income Bracket Basis.” This increases from 3.2% to 3.5% as a maximum a county could impose on an individual’s taxable income. It would also require that a county not charge the lower rate to certain income levels, if they have set this bracket policy by ordinance. MACo decided to take no position because we don’t know how it might affect disparity grants or the education “effort” of a county. We believe that this type of bill should wait until next year and the State has acted on an amended version of Kirwan.
Then there are bills that continue to limit or reduce County revenues, just when we need them more than ever. HB1280, “Admissions and Amusement Tax – Small Business Exemption”, would prohibit a county from imposing this tax on businesses with less than $75,000 in gross receipts. MACo mostly opposes bills that impose State mandates, revenue decreases or spending increases. HB1451, “School Bus Purchasing – Zero Emission Requirement,” would be such a bill, requiring that each school bus be a zero-emission vehicle. This is unworkable. Electric vehicles are limited as to how far they can travel and most jurisdictions have to cover many miles of roads, not to mention the cost of purchasing such buses.
Then there’s the BRFA. HB152/SB192 is the annual Budget Reconciliation and Financing Act. This is the “catch-all” to balance the budget. There are several problematic items in it this year. It proposes to shift the cost of SDAT (State Dept of Assessments and Taxation) from 50% to 60% onto the locals. It also reduces the Community College CADE formula and Counties would lose approximately $121 million in funding, which would either have to be added to the tuition or borne by the county taxpayers. And if you remember the Highway User Revenue issue, this would also pull some of what little bit of local dollars we have left to pay for a State tunnel project in Baltimore City.
Speaking of Highway User Revenues, HB1394/SB982 would repeal the “sunset” provision that counties and towns advocated for a couple years ago. Municipalities are nearly fully funded but Counties still have a long way to go. We would like to make permanent the partial restoration we regained. It also adds a gradual restoration of 1% and includes a CPI adjustment. It is very important to have some type of bill on the table each year. Funding was cut 90% ten years ago and many legislators don’t remember how much this has harmed the towns and counties. MACo definitely supports this bill!
A really bad bill, is HB1406, “Land Use Development – Middle Housing.” This would completely preempt local land use control. The bill states that a local jurisdiction SHALL adopt land use regulations and amend its comprehensive plan. Counties would be required to allow duplexes, triplex’s cottage clusters, townhomes and similar on single family lots in qualified census tracts. There are stipulations on what constitutes a qualified area, but this is definitely the proverbial “camel’s nose under the tent.” It would only be a matter of time before most jurisdictions would have this requirement. MACo strongly opposes this bill.
Another bad land use bill is HB1390/SB741, “Public Convenience and Necessity – Electric Study and Procedures.” This is another preemption bill that removes all semblance of land use planning regarding utility scale solar installations, requiring Public Service Commission approval. Solar developers should not “freeze out” local jurisdictions, as this bill would certainly do. What is reasonable along a highway in suburban Montgomery County, may be completely unreasonable in a rural setting, with historic homes and landmarks on the Eastern Shore or Western Maryland. There has already been litigation over this issue and will continue to be a fight. We strongly opposed this bill.
HB991, “Procurement – Transparency and Application to County Contracts” is another bill to eliminate local decision-making authority. County procurement would have to be altered to match the State, which would make it much more complicated. Counties are transparent. We go out to competitive bid, get a minimum number of quotes, or piggy back off State contracts. There is no reason to overturn our own procedures. MACo opposed.
A couple good bills that we did support were HB1485 and HB1496, “Maryland Medical Assistance – Emergency Service Transporters Reimbursement.” Currently, Emergency Service providers are only reimbursed $100 per transport to a hospital. This would increase to $300, transports, not only to hospitals, but also urgent care centers. It would also enable EMS to charge for the response, even if they don’t ultimately transport the patient to a medical facility. Our EMS units can sometimes bill insurance for these transports if a patient has insurance, but if there is no one to charge, it is a large expense to the counties. This could be a big help to help offset the high costs of this very critical service.
Finally, we heard from one of our favorite guests, Budget Secretary, David Brinkley. He gave us an update on the Governors budget and fiscal outlook. A record amount of $7.3 billion is being spent on Education. Environmental programs are fully funded. $1.3 billion is being retained in the reserve account and Maryland is happy to report that it maintained its AAA bond rating. General fund spending is growing at about 1%. The Governors budget is balanced with no tax or fee increases or raiding of funds. $75 million is in the pension funding, and the state has caught up and is ahead of its 80% funding goal.
Having served for three years on the Kirwan commission, Secretary Brinkley stated that the budget has competing interests and we live in a finite world. Future deficits will occur and Kirwan will only add to them and a recession will only make it worse. To quote the Secretary “If everything is a priority then nothing is a priority,” which he pushed for during his time on the commission. He believes we need to get the biggest bang for our buck and allow the locals the opportunity to prioritize their needs.
Secretary Brinkley said that the Kirwan commission was supposed to be a follow up to Thornton, from 18 years ago due to a court order. To quote, “We’re about to repeat history” and pass policy with no funding source. “We are already spending 22% more per pupil and 28% more in teacher salaries than the national average.” Passing a budget is one of only two Constitutional obligations of the State. He agreed that the proposed sales tax increase will do nothing to fund the County share of Kirwan and the Governor opposes any tax increases to pay for Kirwan. “The State must maintain its fiscal discipline and hardworking taxpayers live within their means and the State needs to do the same.”
So that’s the long wrap up of the past two weeks, all while the Kirwan discussions are going on, along with the Sales tax expansion that includes almost every service. It’s a whirlwind of activity, but don’t stop keeping track. Hold those legislators in Annapolis accountable to do what is in everyone’s best interests, and never just one group. Until next week….
Laura Price is 2nd Vice President on the Executive Board of Directors of MACo, Chair of Budget and Tax, Talbot’s legislative liaison and member of the Talbot County Council.
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