After a few weeks of hearings now that all the legislation has finally been introduced, MACo is following closely everything we took positions on. There has been lots of testimony, many conversations with Legislators, working on amendments and compromise. Then we waited for the magic day of Crossover, which was on March 21st, to see what bills in Annapolis were moving forward and which ones have died. Here is what we know so far.
Most subtraction modification tax bills are DEAD. This is important because as I wrote in Report 3, these bills mandate that the taxes are reduced at the State and County level. Because Counties only have two main revenue sources, income tax and property tax, there is very little flexibility in our budgets and we would not be able to cover the costs to provide much needed services here at home. MACo urged the Committee to primarily consider state income tax credits as the best means to incorporate local tax relief as part of a broader policy.
On Wednesday, we had our final Legislative Committee meeting. It was in person for the first time this year and we had a surprise guest, Senate President, Bill Ferguson. He was very aware and attentive to the issues MACo is concerned about. I was relieved to hear him say that the tax reduction package the legislature is considering, are State Tax Credits and not ones that will impact the County revenues. This is of huge importance to us and we are grateful to him and leadership for recognizing that.
Senator Ferguson also spoke about two of our critical MACo initiatives. The Highway User Revenues and the Emergency Services Transport bill and he seems to appreciate the significant impact those would have to the counties.
In Report #6, I covered the four different Highway User Revenue Bills. The MACo bill is HB1187 / SB726. As a reminder, restoring these revenues has been a priority almost every year since 2009 when the State severely cut the local share. HB1187 was dramatically amended down by the House. It only increases the county share marginally from 3.2% to 3.6%, over 4 years, then we get cut down to 1.5%, so we lose it all again. Our share used to be 15.3% for 40 years and we need to get back to that level.
Hearings took place on March 9 and 10. First up was the Senate, which was in person! What an impact and nearly every jurisdiction showed up to testify. We were seated in the front rows and SB726 was moved to the top of the agenda. It was powerful and MACo expects that the committee (Budget and Tax) will pass it with relatively minor amendments, or possibly intact. Then it will move to a conference committee to try to work through the differences with the amended HB1187. The other bills HB410/SB400 and SB946 will be considered as a package along with MACo’s bill. We expect a vote in B&T early next week.
In Report #1, I wrote about HB44/SB295 “Emergency Service Transporters – Reimbursement” It is one of MACo’s four initiatives. I was able to testify alongside the Executive Director, Michael Sanderson and other county leaders. As a reminder, this bill would ensure that the State is reimbursing the critical functions of EMS at a fair and modernized rate which would gradually increase to $300. It would allow for billing of treatment in the field, when transporting a patient is not necessary and it would also recognize that transport to an ER is not the only place a patient could go. It would also allow for transport to an Urgent Care facility or other appropriate location.
The bill has passed the Senate and is now headed to the House, where it will first be considered in the Health and Government Operations committee. Bills tend to be more challenging in the House, so we are working diligently to communicate with committee members before they vote on it.
In Report #2, I discussed HB 8 / SB 275 “Family and Medical Leave Insurance Program. This is the bill under consideration that creates an insurance fund through payroll deductions. As introduced, it is an equal split between the employee and employer. Currently, there is a Federal law (FMLA) that requires employers with 50 or more employees to give 12 weeks of unpaid leave to care for a family member and guarantee that they can come back to their job and also maintain their health benefits. Under this bill, employees would receive pay during their time away from the job.
This bill has passed the Senate, more substantial amendments. Most notably it changes the split to 25% employer and 75% employee. The Chamber of Commerce proposed most of the amendments and all were accepted. The House has done nothing policy wise; they are just establishing a commission to study and their current version doesn’t codify anything into law. Which version will ultimately be the compromise remains to be seen. You can read more details on our MACo Blog.
In Report #3, I shared information about SB259 / HB611 “Procurement – Prevailing Wage.” This bill expands the prevailing wage law beyond building construction to include ALL mechanical systems, HVAC, refrigeration, plumbing and electrical. Under current law, the County must pay the State’s prevailing wage on any capital project (primarily school construction), where the State contributes just 25% of the cost. The bill, once again, usurps local authority and prescribes a one size fits all (read, one size fits none) approach over facilities management.
The counties thought we were safe for this year, because both versions weren’t moving, then suddenly it came out of both committees. It passed both chambers without much discussion just before crossover day this week. This will be very expensive and have huge implications to the counties. We will see how the final floor votes in each chamber come out to know how much.
In Report #4, I wrote about SB567 / HB1282, “Property Tax – Agricultural Use Assessment – Improvements.” Agricultural properties are taxed at a far lower real property rate than other businesses. We support accessory activities on farms, to help supplement their revenues and make them more sustainable. However, we don’t think it is fair to incentivize businesses to simply buy up agriculture land and have wineries, breweries or wedding venues, just to be able to save on taxes. In order to keep the playing field level for all businesses, they should be taxed the same rate.
Good news on this bill, it has passed the Senate with the MACo amendments. That changes it to apply to accessory uses only on working farms. We will continue advocating and see what happens in the House.
There were many more updates that the Legislative Committee received this week and I will fill you in on those next week. Even though, I haven’t been writing each week, please know that I and other county leaders, along with our MACo policy team have been hard at work, advocating for you, the citizens, to make proposed legislation much better for all.
Laura Everngam-Price is President of the Executive Board of Directors of Maryland Association of Counties, former chair and current member of Budget and Tax, member of MACo’s Initiative subcommittee, Talbot’s legislative liaison and member of the Talbot County Council.
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