Proposed state budget has no tax, fee increases
Thursday, 23 January 2014 14:23
by Bill Gates

The proposed state operating budget released by Gov. Martin O’Malley last week contains no new taxes or increased fees.
    By sheer coincidence, this is also an election year.
    “I was pleased to see Gov. O’Malley heeded the sensible call to not balance the budget through any new taxes or fees,” said Del. John Olszewski Jr. (6th District), chairman of the Baltimore County House delegation.
    The $39 billion budget focuses on more funds for education, prisons, the environment and job creation.
    It also includes a two percent cost-of-living pay increase for state employees beginning in January 2015.
    For job creation, the budget calls for tax credit iniatives of $27.5 million to boost investment in the fields of biotech, life science, cybersecurity and the film industry.
    There is $335.7 million directed toward public school construction that the adminstration believes will support an estimated 8,200 jobs.
   
The Employment Advancement Right Now (EARN) program is to receive $2.5 million to foster workforce training collaborations between business and government in industries such as cyber technology, health care and wellness, construction and manufacturing.
    Olszewski helped create EARN during last year’s session, during which he was the lead House sponsor of the bill.
    There is also $73.7 million earmarked to assist state residents who are unemployed through no fault of their own and are actively seeking employment.
    Education receives a record $6.1 billion to fully fund public schools from kindergarten through 12th grade, as well as $4.3 million to launch an expansion of pre-kindergarten programs for four-year-olds and the aforementioned funds for school construction and renovation.
    “It was encouraging to see a down-payment on the expansion of pre-kindergarten education,” Olszewski said. “That is something studies have consistently shown to improve educational outcomes.
    “It is also encouraging to see a continued capital investment in our educational infrastructure.”
    The proposed increase to college tuition is three percent, which state officials say is one of the lowest increases in the nation.
    Tuition rates will be frozen at Morgan State University and St. Mary’s College, and the budget includes $122.6 million in state scholarships and grants for 56,000 students and $16.5 million for campus-based financial aid at public universities.
    There is $100 million to help control polluted runoff into the Chesapeake Bay, and $20 million to encourage farmers to plan cover crops that absorb pollution.
    Other money in the budget will provide grants for urban and suburban communities to restore streams and build rain gardens to help control stormwater.
    The budget proposes hiring 100 new corrections officers, mainly for prisons in western Maryland, training a team of dogs to detect contraband in prisons, $1.3 million to expand the prison system’s internal investigations division and $2 million for new camera and security systems.
    For gun control, the budget includes $3.8 million for the Maryland State Police to cover expenses related to the large increase in background checks caused by the rush to buy guns before the gun law passed last year went into effect.

Criticisms
    Republicans have criticized the budget, saying O’Malley closed the gap between spending and revenues by capping the annual payment to the state pension fund at $200 million (freeing up $172 million to cover the budget deficit).
    “There are a few provisions of the budget that are worthy of more scutiny by legislators,” Olszewski said. “Most notable among these are a heavy reliance on savings at the expense of the state’s expected contribution toward employee retirement benefits and health care, and shifting of funding from other programs.
    “For example, the budget proposes to use preservation money intended to buy open space land for current programmatic spending, while borrowing money for these open space land purchases.”
    That, Olszewski said, would actually drive up the overall cost of the program.
    The legislature may only make cuts from the governor’s proposed budget; it may not make any increases or changes.
    Warren Deschenaux, director of the Office of Policy Analysis in the Department of Legislative services, cautioned on Monday that the budget lacks enough of a cushion to cover unforeseen expenses.
    Deschenaux told legislators the budget leaves only a $30 million ending balance, while the state has encountered $112.3 million in unanticipated costs during the current fiscal year.

Local impact
    There is little in the budget which relates directly to Dundalk-Edgemere, but Olszewski said there are many places in the budget “that have the potential to improve and enhance the quality of life in the area.”
    That improves $5 million for improvements to public boating (dredging channels, placing signage and boat ramps), $32 million for maintenance and improvements to state parks (including North Point State Park and the North Point Battlefield State Park) and money for CCBC Dundalk and public schools.
    
Counties minimum wage bill
    Del. Neil Parrott (Washington County) and Sen. Barry Glassman (Harford County), both Republicans, provided a new spin on the minimum wage debate when they introduced the “County Choice” bill last week.
    The bill would tie Maryland’s statewide minimum wage to the federal rate, but allow Maryland counties to set their own minimum wage.
    Two counties, Prince George’s and Montgomery, have already voted to increase their minimum wage, but there is nothing in place to allow them to enforce the new rate.
    “For the minimum wage rate in Maryland, one size does not fit all,” Parrott said. “Each county can serve the needs of its citizens best. For some counties, a raise in the minimum wage would suit them. For others, the consequences would be severely negative.”
    The Montgomery County Council voted in November to increase the minimum wage to $11.50 per hour by 2017.
    The current federal minimum wage is $7.25 per hour.
    Prince George’s County also voted to increase its minimum wage to $11.50 per hour by 2017.
    Glassman said the County Choice bill would bring “a significant economic factor back into the hands of local governent, back into the hands of the people. Local governments know best the needs of the people and the impact different laws might have on their communities.”
    Olszewski said he will evaluate the County Choice bill along with all of the other bills related to the minimum wage.
    “I continue to believe we can and should help our lowest wage workers with an increase,” Olszewski said. “But we should implement any changes thoughtfully, with a special sensitivity to the smallest businesses in our state.”