April 5, 2011
The Final
Countdown
The last week of the legislative session looms ahead and
there are still major issues yet to be addressed. This week’s newsletter
examines the second half of the state budget – capital projects, and some of
the bills still lingering in the legislative process. The important thing to
remember this week: no legislation is
completely dead until the confetti falls at midnight on Sine Die.
Capital
Budget…Debt? What debt? Keep Spending!
The capital budget, HB 71, is expected to be on the House
floor today. The capital budget funds
the construction and improvement of state buildings and state infrastructure
known as capital improvements. Some of
those projects this year include community parks and playgrounds, upkeep of
battle fields, and replenishing the Ocean City beach, to name just a few of the
many projects. In order to fund these
projects, the state sells bonds, which are paid out to investors with interest.
The debt is supposed to be covered by revenue from property taxes, however this
year the cost of the capital improvements will be greater than the revenue
generated by property taxes. Rather than
scaling back on the projects and remaining within the debt limit, the state
treasurer has recommended that the affordability limits can be breached. Essentially she is saying that although the
credit card is maxed out and there is not enough money coming in to pay the
bill, it’s okay to keep spending.
The already strained general fund will have to be tapped in
order to make up the difference. This is a quick fix, and may work temporarily,
but it is not a sustainable solution. If the spending is not reigned in,
property taxes will have to be raised in order to relieve the projected strain
on the general fund for fiscal year 2013.
According to Treasurer Kopp, this could mean an increase of 17 cents per
$100 of assessed value – resulting in a 50% increase in Marylanders’ state
property tax bills!
O’Malley’s Wind
Farm Swirling In The Air
With growing pressure from the O’Malley
administration on both the House and Senate, there is still a drive to pass
legislation in support of a $1.5 billion wind farm off the coast of Ocean
City. Governor O’Malley and his
administration have proposed several amendments purportedly intended to limit
the cost to ratepayers, the effectiveness of which are questionable. Before the
Governor went in front of the Economic Matters Committee, the Maryland Public
Service Commission estimated that the cost of the project would increase
ratepayers bills up to $8 a month. According to the Daily Record “cost
estimates for the governor’s proposal have ranged from less than $1.50 per
month on residential electric bills, to more than $8. A report by Baltimore-based
Sage Policy Group Inc. found offshore wind energy to be the second-most
expensive type [of renewable energy], behind only solar. And a legislative
analysis of the governor’s proposal estimated residential customers would pay
$3.61 more per month starting in 2016.”
There is also the question of influence from
Governor O’Malley’s former members and associates, including O’Malley’s former
Chief of Staff Michael R. Enright, who is now a “managing
director of an energy firm behind a joint venture competing for federal leasing
rights to develop the project.”
With the multiple unanswered questions lingering about the legislation, it
is still uncertain whether the proposal will move forward in this final week of
session. The Senate Finance Committee chair, Senator Thomas “Mac” Middleton has
formed a workgroup to examine the issue over the next few days.
Invest Maryland
Becoming a Gamble in Committee
Having appeared twice before the House Ways and Means
Committee, Governor O’Malley is determined to see his proposed joint venture
capital fund called “Invest Maryland” succeed.
However, there is a growing
movement to significantly alter the legislation from what the Governor
originally proposed. Some lawmakers would like to see the fund become less
political by limiting the Governor’s, and the
Department of Business and Economic Development’s, influence in decision making
with regards to the fund. As the
legislation currently stands, the Governor and DBED have the authority to pick
which companies to invest in and the makeup of the board of directors which
will oversee the fund.
Since the fund would be raised by
selling tax credits to insurance companies and taking money out of taxpayers
wallets, it would be highly inappropriate to establish what is effectively an
entitlement to companies that have interests or influence within the O’Malley
Administration.
At this time, the legislation is
still awaiting action in committee, a status which can change quickly,
particularly during the last days of the session. The caucus will continue to
monitor and respond to this and other outstanding pieces of legislation.
Dream Act Still
Could Become Reality
Having moved out of the Senate a few weeks ago, SB 167 Public Institutions
of Higher Education - Tuition Rates - Exemptions also known as the MD Dream
Act, is trying to gain traction out of the House Ways and Means Committee
during the last week of Session.
This
legislation would allow illegal immigrants residing in the state and attending
Maryland public schools the ability to receive in-state tuition benefits at
Maryland public colleges. The Senate version, which is being reviewed, focuses
primarily on community colleges in Maryland. During a heated hearing last week
many questions were raised about how to implement the law as well as how taxpayer
identification numbers would be used for enrollment purposes.
If passed
into law, the Dream Act would also cause a loss of opportunity for legal high
school graduates in the State of Maryland. Currently, there are a select number
of admission slots open to in-state residents. If the bill were to pass, the
opportunities for legal in-state residents would necessarily decrease.
The
Dream Act is still in committee awaiting action but again, things can move
quickly during these last days of session so its status could change within the
next few days.
