Weekly Legislative Newsletter
Dear Constituents:
I’m pleased to present a final legislative wrap-up of the actions of the 2011 Maryland General Assembly.
Listed below are brief summaries of the major issues we addressed, and how I voted on each bill. You will notice that I voted against many, many bills. There were, in my view, many bills that were deserving of opposition. Most of the good bills that I supported never made it out of their respective committees. These were bills that would actually promote fiscal accountability, create jobs, and lessen the tax burden on our citizens and businesses.
The Fiscal Year 2012 State Operating Budget, House Bill 70
Last week, the House of Delegates approved the $34.1 billion State fiscal year 2012 operating budget by a vote of 98-41. This year’s budget, submitted by the Governor in January, is technically balanced as required by the state’s Constitution, but it contains several objectionable provisions. Let me explain these in some detail, and tell you why I voted against the budget.
First, the budget increases overall spending by $900 million. At a time when people are really hurting financially, a spending increase of this size is unconscionable. Folks are tightening their belts, and so should our State government.
Second, the budget postpones the difficult choices we face. Instead of cutting unneeded spending, it raids money from several special funds to balance the general fund budget. Example: a combined $150 million is raided from Program Open Space and the Transportation Trust Fund without any promise whatsoever that these funds will ever be repaid. When you fill up your tank at the pump, you expect your 23.5 cents per gallon state gas tax to be used for highway improvements, not to be siphoned off for general fund overspending. Likewise, when you pay the transfer tax when purchasing a home, you expect this money to go toward preserving open spaces in Maryland. These dedicated funds – and several others – have been diverted to the general fund, which I believe is short-sighted public policy.
Third, the budget contains several increases in taxes and fees. It raises the vehicle titling tax from $50 to $100; vanity plates from $25 to $50; land recording fees from$20 to $40; birth certificates from $12 to $24; and increases assessments to hospitals by 2.5%.
Fourth, we’re borrowing unprecedented amounts of money. In the budget, we’re replacing $193 million in ongoing operating expenses with debt. By increasing the amount we’re borrowing, we’re bumping up against the State’s debt ceiling. This will ultimately force us to do one of two things: increase the general fund supplement for debt service, or increase the State’s real estate tax. Both options mean new taxes one way or another.
Fifth, and perhaps most importantly, the economic recovery is very, very fragile. The housing market – which seemingly bottomed out six months ago – has plummeted again, with major metropolitan areas across the country reporting large drops in home values just this week. Gas prices are exploding and consumer confidence is tanking. This is the wrong budget to implement at this time, with so much economic uncertainty.
Fortunately, there was a viable alternative this year, and I was very happy to support it. The House Republican Caucus,for at least the third year in a row, presented a comprehensive budget that did not increase taxes and fees, and puts us on a sustainable path to completely eliminating the structural deficit in the next two years. While the Republican alternative did rely on some one-time transfers this year like the Governor’s budget, it completely pays back funding to Program Open Space and the Transportation Trust Fund beginning next year.
The GOP alternative also cuts $621 million from this year’s budget, maintains the mandatory 5% in the Rainy Day Fund, andmaintains the State’s AAA bond rating. It contains some tough medicine, and some of the savings are in education. But under our plan, funding for kindergarten through grade 12 education still increases by $300 million, which is a significant increase in these tough times.
In the end, our budget alternative was not approved, but we believe it is important to offer the citizens of Maryland a comprehensive, thoughtful alternative.
Pension Changes Impacting State Employees, Teachers and Retirees
Significant changes were made to our public sector pension system. These changes are absolutely necessary and critically important due to a $35 billion unfunded liability in health care and pension obligations for state employees and teachers. This simply means that our future legal obligations to pay current and future state employees and teachers their health and pension benefits falls short by a whopping $35 billion! Maintaining the status quo is simply unacceptable given the unsustainability of these programs.
In the end, changes include:
1.) requiring new employees to serve at least 10 years before becoming fully vested in the pension system, increased from the current 5 years;
2.) requiring all current and new employees to pay 7% of their pay into the system – up from 5% for current employees;
3.) the yearly multiplier for current employees would remain at 1.8%, and would be 1.5% for new hires – the multiplier is the pace at which benefits accrue. Example: 20 years of service multiplied by a 1.8% annual multiplier equals a 36.8% benefit based upon one’s ending salary;
4.) retirees would receive a 2.5% cost of living increase if the annual return exceeds 7.75% and 1% if the returns are less than 7.5%.
I support these tough but necessary changes.
Senate Bill 167 – the “DREAM” Act
This bill is among the most egregious bills to ever pass the General Assembly, in my view. Under SB 167’s provisions, astudent who is in this country and this state illegally would be eligible for in-state and in-county tuition rates at our public universities and community colleges respectively. The bill passed the House by 74-66.
The exact cost of this bill is likely in the tens of millions of dollars, but throughout the lengthy debate, a reliable and accurate fiscal note was never produced to provide a good estimate of the ultimate cost. I asked the proponents on the House floor how they could justify spending huge sums of money to benefit illegal immigrants at a time of great fiscal uncertainty, and they could not produce a good answer. As an example, allowing illegal students to attend one community college – Montgomery College – costs $6 million each year! Extrapolate that cost among all the community colleges and universities and the cost is huge. This bill will undoubtedly prevent legal students from attending one of our universities since there is a finite number of seats. Obviously, I voted NO on this bill.
House Bill 72 – the Capital Budget
Each year, the General Assembly passes a capital budget, which funds capital needs such as new and renovated schools,support for local nonprofit groups, hospitals and clinics, and other needs. While the capital budget contained several good projects, like $6.5 million for funding an expansion of Hampton Elementary School, in the end there was way too much in unnecessary spending, and I voted against it. We are incurring too much debt at a time of great economic uncertainty.
House Bill 1213 – Alcohol Tax Increase
This was undoubtedly the worst moment in the session this year. Not only was this a job-killing tax increase
on working people, but the process by which the majority party shoved this bill through was truly shameful. We read in our civics text books about how the democratic process should work – everyone should have a voice to air their views, debate should be unfettered, open and transparent, and we should make decisions in the open, not behind closed doors. This bill was originally touted as a “dime a drink” to support programs for mental health and disability programs. Advocates for the mentally ill and disabled came to Annapolis to lobby for the bill. Then, within two days of adjournment – without the benefit of a public hearing – the majority party drastically changed the bill to increase the tax by 50%, and dedicated the proceeds to school construction in a closed-door, subjective and very political process. We were assured during the campaign that no taxes or fees would be raised, and on the very last day of the session we raised a major tax, extracting $85 million from Maryland’s private economy, killing thousands of jobs in the process. In the end, the bill passed 78-62. I obviously voted against it. This is not the time to raise a tax of this magnitude, regardless of where the funds would be dedicated.
House Bill 173 – Invest Maryland
This was one of the Governor’s major policy initiatives of the year. It proposes a $100 million venture capital fund designed to provide start-up money to Maryland-based companies which have trouble attracting seed money. The $100 million was eventually cut to $75 million, and would come from premium tax credits paid by insurance companies to the State; the fund would be controlled by the Governor through his appointees to a statewide commission.
State government, through the use of tax dollars, should not be in the business of picking economic winners and losers. This is a highly questionable way to assist start-up companies. Instead, we should be lowering our corporate rate to attract new companies, and generally attempting to make Maryland more business-friendly. This would be a better long-term way of helping companies grow and prosper. The bill passed by 94-43. I voted against this bill.
Septic Tanks
While this bill does not directly impact our district, it does have a major impact on the State’s beleaguered housing industry. The Governor unexpectedly introduced this bill during his State of the State address in January. The bill, which was not enacted, would have prohibited any new septic systems in new housing developments of fifteen homes or more within designated “critical areas” near the Chesapeake Bay. In the end, the legislature opted to study the idea further.
House Bill 23 – Regulation of Abortion Clinics
Regardless of your position on abortion, it would be surprising for most citizens to learn that free-standing abortion clinics in Maryland are completely unregulated. No statistics are collected, and basic regulations such as having running water in each room, and requiring doors wide enough to accommodate portable beds, are not required under state law or regulation.
I supported HB 23 as a reasonable step toward providing appropriate regulations and safeguards in the same way that ambulatory and surgical centers are currently regulated. Several well-publicized examples of women being harmed or killed in Maryland demonstrate the need for this bill. In the end, the bill was not approved by the committee, but we have received assurances in writing from the Department of Health & Mental Hygiene that regulations will begin to be promulgated this summer. I will be vigilant to make certain that this process moves ahead expeditiously.
Wind Energy
This bill would have placed unrealistic mandates on utilities, and the accompanying costs would have been passed down to ratepayers. In the end, the legislature opted to study the issue in greater detail.
Senate Bill 308 – Medical Marijuana
I signed on as a co-sponsor of this bill, which would have allowed the use of marijuana for strictly medical reasons under stringent criteria. The final bill which passed requires a study to develop and implement a plan to make this happen. In the meantime, we passed an “affirmative defense,” allowing sick people to argue medical necessity if found with less than one ounce of marijuana.
Wine Shipping
Beginning July 1st, Marylanders can have up to 18 cases of wine shipped directly to their homes. This is a major step in the right direction of updating our antiquated liquor laws, and I supported it.
Senate Bill 116 – Same Sex Marriage
After weeks of emotional debate and discussion, the House of Delegates referred this bill on March 11th back to the House Judiciary Committee, essentially killing the bill for this year. Proponents lacked the votes in the House to pass the bill after it had cleared the Senate in February. It will undoubtedly be back next year. I voted against the bill because I strongly believe that marriage should remain between one man and one woman in the State of Maryland.
Thank you for your interest in issues impacting Maryland.