Not being a native, I have had to learn some nuances of the region’s political history. I remember reading a post submitted by Ron Fithian, President of the Kent County Commissioners. He talked about the high regard in which Clayton Mitchell, and by extension, our seat in the General Assembly, was held. Whether the motive for that comment was a lament of our situation or a challenge for his town compatriot, the message was clear: the time has come to reclaim a seat at the big person’s table.
Troup’s Corner shares that sentiment. At the risk of sounding like the Israeli Prime Minister, the situation on the ground has changed. Our region has an opportunity to be part of the discussion, if it wants to be. For example, last week’s inquiry into the State’s maintenance of effort education mandate was picked up by Montgomery County circles. Mandates that have affected smaller counties are now starting to become cumbersome for larger jurisdictions, as the fine political line must be walked between pulling the trigger on the constant yield rate and cutting funding for various programs.
While Kent County is on a smaller scale compared to Montgomery, all of these decisions are relative. Eastern Shore counties have made these tough decisions in recent years. Now they must be made on the I-95 corridor.
Montgomery County BOE President Barclay (see last week’s edition) recently submitted a letter to the county’s Annapolis delegation. Mr. Barclay also wants a change to the maintenance of effort standard. The difference is he would like to double down on it, by keeping the annual standard, extending the taxing authority of the counties, and penalizing the county government if the mandate is not met.
While we agree that not meeting the MOE standard for the purposes of “rebasing” education funding is spiteful and violates the spirit of the mandate, yours truly advocates a four-year approach so that counties can handle year-to-year economic hardships. By sharpening the teeth of MOE, Mr. Barclay’s ideas could be counter-productive. If MOE is institutionalized as an absolute minimum and taxpayers wind up footing the bill for the penalty, then counties may only use the mandate as a magnet. Significant increases would set the bar artificially high for the following year (as I noted last week, this “rebasing” seemed okay at the time).
So Montgomery County’s BOE appears to want the attention of the State. Hopefully our 36th district delegation will do the same. Now that it has been agreed upon that MOE as currently constructed no longer works, the conversation should begin on how to fix it. Will Annapolis welcome everyone to the table?
Earning a seat, part deux
The degree to which Eastern Shore counties can best the beltways in a funding battle is TBD at best. It may take a baby steps approach. Is there somewhere that the 36th can impact the discussion, and have a positive impact on the overall budget situation?
One such situation may come in the form of affecting a change to the State’s Abandoned Property Act. In an ironic twist of fate, the state ranked 31st in business friendliness by a study documented in the April 20, 2011 edition of the Baltimore Business Journal, has exclusions for business to business transactions (B2B) in its unclaimed property law.
Backing up a little bit, after an elapsed period of time established by the various states, the states afford themselves the right to take “custodianship” of money unclaimed by owners domiciled in their state. An “owner” is usually the payee on a check. The state takes responsibility for distributing the funds to the rightful owner, if they make a claim. Short of a claim, funds go to the general fund as miscellaneous revenue.
If one were so inclined, they could take a peek at the fund by going here . A $50 million reduction was forecasted between 2010 and 2012. If excluded B2B transactions were only a tenth of the value of the 2010 figure, the State of Maryland could realize $330 million in revenue over a decade.
There’s more to the story. Abandoned property laws are owner driven, which is to say that holders (payors) are compelled to act in the interest of owners (payee). Maryland is actually declining to take custodianship of funds owed to Maryland businesses; consequently, allowing other states without a B2B clause to realize this revenue (just about every state has this “if you won’t then we will” clause in their law).
Rest assured, readers, that nobody has kidnapped the author of Troup’s Corner and replaced him with Peter Franchot. I get the irony that I am telling you all that the State isn’t taking enough from businesses. Let’s not cry too many tears for them. In accrual accounting, the funds were kissed goodbye when the check was written. So this would really be a matter of taking funds out of one liability account and placing it in another.
As we discuss millionaires’ taxes, increasing tolls, gasoline taxes that somehow morphed into grants, and delegation of liabilities to the locals, there are other tweaks that can be made. Perhaps this solution should be looked at during the next legislative session. Even though we’re all coming for the dinner, the folks at the table usually remember a well-prepared dip.
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