Maryland's Money Matters

The (Very Busy) Week Ahead

2012-02-27T14:11:00.001-05:00

As the Baltimore Sun so aptly put it, this week the Assembly shifts [its] attention from love to money. In case you missed it, last week MBTPI testified in support of expanding property tax relief for renters. This week we are submitting testimony on at least seven bills.

Monday, February 27^th

Senate Education, Business, andAdministration Subcommittee holds budget hearings on the Canal PlacePreservation and Development Authority, Workforce Development(DLLR), the University System of Maryland Office, and the UM Center for Environmental Science. 1pm, in 3West, Miller.
Senate Health and Human ServicesSubcommittee holds budget hearings on the State Board of Elections, the Office of Home Energy Programs (DHR), and the Infectious Disease and Environmental Health Administration (DHMH). 1pm inAmoss, Senate Office Building.
House Education and EconomicDevelopment Subcommittee holds budget hearings on the Canal Place Preservationand Development Authority and Funding for Educational Organizations (MSDE). 3pm inroom 120, House Office Building.
House Public Safety and AdministrationSubcommittee holds budget hearings on the Judiciary, Office of the Attorney General, and the Department of Veterans Affairs. 3pm in room 150, House Office Building.
House Transportation and theEnvironment Subcommittee holds budget hearings on the State Highway Administration (MDOT) and the Maryland Transportation Authority. 3pm in room 145, House Office Building.

Tuesday, February 28^th

Senate Budget and Taxation Committeeholds budget hearings on the Department of Information Technology, the State Retirement Agency, Maryland Supplemental Retirement Plans, and the Cigarette Restitution Fund. 1pm in 3 West, Senate Office Building.
House Ways and Means Committee holdshearings on a number of proposedrevenue measures beginning at 1pm in the HouseOffice Building, including:

HB 784 (SB 249), which wouldreinstate the 6.25 percent income bracket for millionaires. MBTPI supports this bill. [UPDATE: This hearing has been postponed to March 6th.]
HB 836 (SB 523) would partially repeal the1997 Tax Cut, by adding a quarter of a percent toeach of the four existing tax brackets (over $3,000 of taxable income). This bill is intended as an alternative tothe Governor’s plan to reduce deductions for upper income taxpayers. Unlike the governor’s plan this does notgenerate revenue for the counties. MBTPI prefers the Governor’s proposal,but would support HB 836/SB 523 over the equivalent amount of damaging budgetcuts.
HB 764 (SB 739) would require reviews of a wide range of tax creditprograms every five years in order for the credits to be continued. MBTPI alsosupports this measure.

House Appropriations Committee holds ahearing on the revenue outlook for counties. This will be particularly interesting in light of the debate over splittingteacher pension costs between the state and the counties. 1pm in the House Office Building.
House Economic Matters Committee holds a hearing onthe Rental Purchase Agreements Best Practices Act (HB 997/SB 778). MBTPI supports this bill, which would force rent-to-own businesses to bemore transparent with their customers and promote fairer business practices. A fiscal note is available. 1pm in the House Office Building.

Wednesday, February 29^th

Wednesday will be along day in the Senate Budget and Taxation Committee. The committee holds ahearing on the BudgetReconciliation and Financing Act (or BRFA, SB 152/HB 87). The House AppropriationsCommittee will hold its hearing on the BRFA on Thursday. MBTPIsupports the Governor’s revenue proposals as responsible measures tosupport vital services. However, revenueenhancements should be paired with an increasein the refundable state earned income tax credit (HB 331/SB 943). The committee will also hold hearings on:

Reinstating the millionaire’stax (SB 249/HB 784). MBTPI supports thisbill.
Partially repealingthe 1997 tax cut (SB 523, see description for HB836 above). MBTPI supports this bill.
A constitutional amendment on the budget process. SB 837 wouldallow the legislature to shift funds between budget items, so long as the totalamount is not increased, and would give the Governor a ‘line item veto’ onitems increased. This amendment would make Maryland legislatorsfull partners in the budget process. MBTPI supports thisbill.
A bill to reduce theBoard of Public Works (BPW) power to cut appropriations. SB 838 would limit the BPW to cutstotaling 10 percent of the approved budget, down from 25 percent. The bill would also require proposed cuts tobe presented to the legislative budget committees a week prior to BPWconsideration.

House Health and Human ResourcesSubcommittee holds budget hearings on the Office of the Chief Medical Examiner (DHMH),the Office of Preparedness and Response (DHMH), and the Department of Housingand Community Development. 1pm in room150, House Office Building.
House Public Safety and AdministrationSubcommittee holds budget hearings on the State Treasurer,the Office of the Public Defender, the Department ofInformation Technology, the Department of State Police, and the Maryland StateBoard of Contract Appeals. 1pm in room 120, House Office Building.
House Transportation and theEnvironment Subcommittee holds a budget hearing on the Department of the Environment. 1pm in room 145, House Office Building.

Thursday, March 1^st

Senate Education, Business, andAdministration Subcommittee holds budget hearings on the University ofMaryland-College Park, University of Maryland-Baltimore, and Coppin StateUniversity. 1pm in 3 West, Senate OfficeBuilding.
Senate Health and Human ServicesSubcommittee holds budget hearings on the Department of Housing and CommunityDevelopment, the Office of the Chief Medical Examiner (DHMH), and the Office ofPreparedness and Response (DHMH). 1pm inAmoss, Senate Office Building.
Senate Public Safety, Transportation,and Environment Subcommittee holds budget hearings on the Office of the Attorney General, the Department of State Police, the Maryland EnergyAdministration, and the Maryland Automobile Insurance Fund. 1pm in Schweinhaut, Senate Office Building.
House AppropriationsCommittee holds its hearing on the BRFA (HB 87/SB 152), which MBTPIsupports, along with an increase in the refundable state earned incometax. See first item in Wednesday above.
House EnvironmentalMatters Committee holds a hearing on modifications to the Neighborhood andCommunity Assistance Program (HB 731). This bill increases the amount of contributionseligible for a 50 percent state tax credit from $2 to $5 million (increasing statecosts from $1 to $2.5 million) and allows preference to be given to projects inNeighborhood Conservation Districts designated by the US Department of Housingand Urban Development. This is a limited but valuable source of funds forcommunity level service programs which MBTPI has traditionally supported. 1pmin the House Office Building.

Friday, March 2^nd

House Appropriations Committee holdsbudget hearings on the Department of Juvenile Services and the Governor's Office for Children & Interagency Fund. 1pm in room 120, House Office Building.
Senate Education, Business, and AdministrationSubcommittee holds budget hearings on the Department of Business and EconomicDevelopment, the Maryland State Board of Contract Appeals, the Maryland Public Broadcasting Commission, and MHEC Scholarship Programs. 1pm in 3 West, Senate OfficeBuilding.
Senate Health and Human ServicesSubcommittee holds budget hearings on the Maryland Insurance Administration andthe Medical Care Programs Administration (DHMH). 1pm in Amoss, Senate OfficeBuilding.
Senate Public Safety, Transportation,and Environment Subcommittee holds budget hearings on the Maryland TransitAdministration (MDOT) and the Washington Metropolitan Area Transit Authority.1pm in Schweinhaut, Senate Office Building.

The Week Ahead

2012-02-21T09:31:00.000-05:00

Happy President's Day! There's no rest for the weary, as the General Assembly soldiers on despite the holiday. In case you missed it, MBTPI testified last week in support of increasing the refundable state earned income tax credit, an alternative minimum tax assessment for corporations, and the Housing Opportunities Made Equal (HOME) Act.

Monday, February 20^th

Senate Education, Business, andAdministration Subcommittee holds budget hearings on the Comptroller of the Treasury, Department of General Services, Maryland Economic Development Corporation (MEDCO), and the Maryland Technology Development Corporation (TEDCO). 1pm in 3 West, Senate Office Building.
House Education and EconomicDevelopment Subcommittee holds budget hearings on St Mary's College of Maryland,the Historic St Mary's City Commission, Aid to Education (MSDE), and the Maryland Public Broadcasting Commission. 3pm in room 145, House Office Building.
House Transportation and theEnvironment Subcommittee holds budget hearings on the Maryland Aviation Administration (MDOT) and the Public Service Commission. 3pm in room 120, House Office Building.

Tuesday, February 21^st

Senate Budget and Taxation Committeeholds budget hearings on the Maryland Emergency Medical System Operations Fund,and the Department of Budget and Management (Personnel). 1pm in 3 West, Senate Office Building.
House Ways and Means Committee holds a hearing on the Maryland Renter's Property Tax Relief Program (HB 629). This bill would expand the number of renters who qualify for property tax relief. MBTPI supports this bill, which would expand property tax relief for renters to low-income, non-elderly or disabled households. A fiscal note is also available. 1pm in the House Office building.

Wednesday, February 22^nd

Senate Finance Committee holds a hearing on SB 884. This bill would require the State Highway Administration to use the maximum amount of federal funds available for a highway constructiontraining program and supportive services. A fiscal note is also available. 1pm in the Senate Office Building.
Senate Budget and Taxation Committee holds a hearing on the Maryland Business Tax Fairness Act (SB 269). This bill would require multi-state corporations to use a combined reporting method when computing their Maryland state taxes. MBTPI supports this bill, which would level the playing field for Maryland-based businesses, more accurately reflect where large corporations make their profits, and raise needed revenues. A fiscal note is also available. 1pm in the Senate Office Building.
House Education and EconomicDevelopment Subcommittee holds budget hearings on Workforce Development (DLLR),Scholarship Programs (MHEC), and the University System of Maryland Office. 1pm in room 145, House Office Building.
House Health and Human ResourcesSubcommittee holds budget hearings on Infectious Disease and EnvironmentalHealth Administration (DHMH), Family Investment (DHR), and the Department ofDisabilities. 1pm in room 150, HouseOffice Building.
House Public Safety andAdministration Subcommittee holds budget hearings on the Military Department,and the State Board of Elections. 1pm inroom 120, House Office Building.

Thursday, February 23^rd

House Education and EconomicDevelopment and Senate Education, Business, and Administration Subcommitteeshold a joint briefing on performance metrics in higher education. 1pm in room 145, House Office Building.
House Health and Human ResourcesSubcommittee holds budget hearings on the Office of Home Energy Programs (DHR) andDevelopmental Disabilities Administration (DHMH). 1pm in room 150, House Office Building.
House Public Safety andAdministration Subcommittee holds budget hearings on the Police andCorrectional Training Commissions (DPSCS), Criminal Injuries Compensation Board(DPSCS), Workers' Compensation Commission, State Retirement Agency, and MarylandSupplemental Retirement Plans. 1pm inroom 120, House Office Building.
Senate Health and Human ServicesSubcommittee holds budget hearings on the Military Department, and FamilyInvestment (DHR). 1pm in Amoss, SenateOffice Building.
Senate Public Safety,Transportation, and Environment Subcommittee holds budget hearings on the Judiciaryand Department of Natural Resources. 1pmin Schweinhaut, Senate Office Building.

Friday, February 24^th

House Appropriations Committee holdsbudget hearings on the Maryland Emergency Medical System Operations Fund, the State Reserve Fund, Payments to Civil Divisions of the State, andthe Department of Budget and Management (Personnel). 1pm in room 120, House Office Building.
Senate Education, Business, andAdministration Subcommittee holds budget hearings on the State Treasurer, EarlyChildhood Development (MSDE), and Funding for Educational Organizations (MSDE). 1pm in 3 West, Senate Office Building.
Senate Health and Human ServicesSubcommittee holds budget hearings on the Developmental DisabilitiesAdministration (DHMH), Department of Veterans Affairs, and Department ofDisabilities. 1pm in Amoss, SenateOffice Building.
Senate Public Safety,Transportation, and Environment Subcommittee holds budget hearings on the StateHighway Administration (MDOT), Office of the Public Defender, Maryland FoodCenter Authority, and the Maryland Transportation Authority. 1pm in Schweinhaut, Senate Office Building.

DBED audit highlights need for tax credit accountability

2012-02-17T14:05:00.000-05:00

Alegislative audit has found seriousproblems with programsmanaged by the MarylandDepartment of Business and Economic Development (DBED). The audit found that:

DBED did not require eight companies applying for the OneMaryland tax credit to document costs that serve as the basis for the amount ofcredit awarded. Total tax creditsawarded equaled $34 million.
DBED investment agreements contain provisions to forcerepayment plus interest if companies leave Maryland within five years of thestate investment. Yet DBED failed tofollow up when the recipient of a $250,000 investment in 2008 left the state oneyear later. The audit estimated that theamount owed the state now totals $325,000. After the legislative audit raised the issue DBED sent the company aletter demanding repayment.
Internal users of DBEDs financing programs tracking systemswere not adequately restricted. SomeDBED employees had access to many actions, such as bill initiation and paymentprocessing, which were outside the scope of their responsibilities. Disturbingly some former employees still hadaccess up to 20 months after they left DBED. The department corrected security permissions once they were brought toits attention.
DBED did not collect required expenditure and performancereports from all grantees. Consequently,the state does not know if the funds were used for their intendedpurposes. Grantees may well be incompliance with the terms of their grants, but DBED has no way of knowing inmany cases.

Encouragingly, DBED’s response to the audit (included as anappendix to the report) was generally positive. They agreed with the auditors findings and, as noted above, tookimmediate action in several cases.

MBTPIsupports the Tax Credit Evaluation Act (SB 739/HB 764), becauseMarylanders deserve to know what they are getting for their tax dollars. Unfortunately, this audit highlights the needfor continued oversight to make sure that existing and new regulations areproperly followed.

Unemployment remains high for African American Marylanders

2012-02-16T15:41:00.000-05:00

The Economic Policy Institute released an issuebrief today on minority unemployment in 2011, and looking forward to theend of 2012. Yet again the data showthat the unemployment rate for African Americans is significantly higher inMaryland and the rest of the country than the rate for other groups.

Source: Annual unemployment rate data for 2007-2010 is fromthe Bureau of Labor Statistics. Data for the third quarter of 2011 is fromthe EPI report linked to above.

At 11.2 percent, Maryland had the lowest African Americanunemployment rate in the country in the third quarter of 2011—among the 25states (including the District of Columbia) for which this rate could bedetermined. However, this wassignificantly above the Maryland average of 7.3 percent and far above thestate’s White unemployment rate of just 5.6 percent. Out of all fifty states, only in Nevada wasthe White unemployment rate (11.7 percent) higher than Maryland’s AfricanAmerican unemployment rate.

Unfortunately, as the graph and EPI report make clear, thisdisparity is a longstanding problem that is unlikely to disappear any timesoon. Even as the economy recovers fromthe Great Recession the only way this problem will improve is if Maryland supportseducation and job training programs, removes barriers to employment for ex-offenderswho have paid their debt to society, and otherwise encourages job growth(including state employment) across the state.

O’Malley’s gas tax proposal should be paired with EITC changes

2012-02-15T21:00:00.000-05:00

Governor O’Malley released the finaldetails of his gas tax proposal yesterday. Wealready knew that he was going to propose phasing out the sales tax exemptionon gas over three years. Now we know what’sin the fine print.

The governor introduced a “braking mechanism” toease the effects of implementation on consumers. This braking mechanism would hit the pausebutton on implementation if, during the prior year, the price of gasoline roseby more than 15 percent. So in year oneof implementation consumers would pay a 2 percent sales tax on the retail priceof gasoline (less the 18.4 cent per gallon federal and 23.5 cent per gallonstate gas taxes). If during that firstyear the price of gasoline rose more than 15 percent, the sales tax on gaswould remain at 2 percent during year two instead of rising to 4 percent. Only after a year in which the price of gasrose less than 15 percent would the sales tax on gas rise to 4 percent. This braking mechanism would remain in placeuntil the sales tax on gasoline rises to 6 percent, where it will remain.

How likely is it that Maryland will need to use this brakingmechanism? I did some digging, andaccording to data from the federal Energy Information Administration, it wouldhave engaged in six out of the last eleven years. So it seems likely that implementing GovernorO’Malley’s proposal will take longer than the minimum three years.

Source: MBTPIanalysis of EnergyInformation Administration data

The second new detail of the governor’s proposal is anincrease in the amount transportation funding given by the state to countygovernments. Under his proposal, localgovernments would eventually get one fifth of the money raised by the gasolinesales tax. This doubles the current level of 10 percent, but it’s still lessthan the historic local share. Prior to the 2007 recession, the local share oftransportation revenues was 30 percent.

Governor O’Malley also proposed several mechanisms torestore faith in the transportation trust fund, though his proposal does not goas far as somelegislators want. First, anytransfer of money from the transportation trust fund to non-transportationpurposes would require a stand-alone bill in the General Assembly, passed bythree fifths of all assigned committees in each house. Transfers could also be made if the governordeclared a state of emergency. In eithercase, an automatic repayment plan must be included.

While MBTPI is focusing on revenue measures that provide generalfund support, raising funds for transportation needs is also important. We believe that this and other necessary taxincreases should be paired with an increase in the state refundable earnedincome tax credit (EITC) to minimize the harm done to those Marylanders leastable to pay.

MBTPI Director Neil Bergsman testifiedyesterday before the House Ways and Means Committee in support of HB331. This bill would increase therefundable portion of the state EITC to 30 percent of the federal EITC, fromits current level of 25 percent. EITC isone of the most powerful anti-poverty tools Maryland has in its toolbox. Lawmakers should use it, as they did in 2007,as part of a package of tax reforms that raise needed revenues while enhancingthe progressive nature of our tax code.

The Week Ahead

2012-02-13T11:10:00.000-05:00

Monday, February 13th

Senate Public Safety, Transportation, and EnvironmentSubcommittee holds a budget hearing on the DPSCSDivision of Correction. 1pm inSchweinhaut, Senate Office Building.
House Education and Economic Development and SenateEducation, Business, and Administration Subcommittees hold a joint budgethearing on college completion. 1:30 pmin 3 West, Senate Office Building.
House Health and Human ResourcesSubcommittee holds budget hearings on the MentalHygiene Administration and the MDInstitute Emergency Medical Services Systems. 3pm in room 150, House Office Building.
House Transportation and the Environment Subcommittee holdsbudget hearings on the Maryland Department of Transportation, including debtservice requirements and the MarylandPort Administration. 3pm in room120, House Office Building.

Tuesday, February 14^th

Senate Budget and TaxationCommittee holds budget hearings on the State Reserve Fund, payments to civil divisions,and the Interagency Fund for Children and Youth. 1pm in 3 West, Senate Office Building.
House Environmental Matters Committee holds a hearing onHB 292, whichwould reduce the waiting period to apply for a driver’s license for adultdrivers over the age of 25 who already have a learner’s permit. 1pm in the House Office Building.
House Ways and Means Committee holds a hearing on HB 331, whichwould increase the refundable portion of the state Earned Income Tax Credit(EITC) from 25 percent to 30 percent of the federal EITC. EITC is an important support for many low andmoderate income families. It is alsoimportant because it makes the tax code more equitable. With so many important and needed taxincreases on the table this session, increasing the refundable portion of thestate EITC would ensure that those Marylanders least able to pay are not undulyburdened. MBTPI Director Neil Bergsmanwill testify in support of this bill. 1pm in the House Office Building.

Wednesday, February15^th

House Education and EconomicDevelopment Subcommittee holds budget hearings on aidto community colleges and BaltimoreCity Community College. 1pm in room145, House Office Building.
House Health and Human Resources Subcommittee holds budgethearings on the Department of Aging, the Laboratories Administration (DHMH),and the Office of Health Care Quality (DHMH). 1pm in room 150, House OfficeBuilding.
House Transportation and the Environment Subcommittee holdsbudget hearings on the Motor Vehicle Administration and the Departmentof Planning. 1pm in room 120, HouseOffice Building.
House Ways and Means Committee holds a hearing on HB 457, whichwould require MDOT to use the maximum amount of federal dollars available fortraining programs (the feds allow states to use up to a certain percentage of somegrants for training). MBTPI supportsthis job-creating bill. 1pm in the HouseOffice Building.
Senate Judicial ProceedingsCommittee holds a hearing on the HOME Act (SB 277/HB 168, fiscal note). The Housing Opportunities Made Equal Actwould prohibit housing discrimination based on source of income. MBTPI,Maryland Nonprofits, and many of our partners will submit testimony in supportof this bill. MBTPI’s testimony insupport of the House version is availablehere. 1pm in the Senate OfficeBuilding.

Thursday, February 16^th

House Education and EconomicDevelopment Subcommittee holds budget hearings on the UM Center forEnvironmental Science, Maryland Economic Development Corporation, the MarylandTechnology Development Corp (TEDCO), and DLLRBusiness Regulation. 1pm in room145, House Office Building.
House Public Safety andAdministration Subcommittee holds budget hearings on the Comptroller, theDepartment of General Services, DPSCSDivision of Pretrial Detention and Services, DPSCS Patuxent Institution. 1pm in room 120, House Office Building.
Senate Education, Business, andAdministration Subcommittee holds Budget Hearings on St Mary's College ofMaryland, the Historic St Mary's City Commission, and MSDEHeadquarters. 1pm in 3 West, SenateOffice Building.
Senate Health and Human Services Subcommittee holds budgethearings on the Department of Aging, the Laboratories Administration (DHMH),and the Office of Health Care Quality (DHMH). 1pm in Amoss, Senate Office Building.
Senate Public Safety,Transportation, and Environment Subcommittee holds budget hearings on the MotorVehicle Administration, Maryland Aviation Administration, and the PublicService Commission. 1pm in Schweinhaut,Senate Office Building.

Friday, February 17^th

House Appropriations Committeeholds budget hearings on the State Reserve Fund, payments to civil divisions,and the Interagency Fund for Children and Youth. 1pm in room 120, House Office Buidling.
Senate Education, Business, and Administration Subcommitteeholds budget hearings on MSDE Aid to Education and the MarylandStadium Authority. 1pm in 3 West,Senate Office Building.
Senate Public Safety,Transportation, and Environment Subcommittee holds budget hearings on the Departmentof the Environment and the DPSCS Patuxent Institution. 1pm in Schweinhaut, Senate Office Building.

What does Maryland get for its tax credits?

2012-02-08T12:38:00.000-05:00

That’s the question Senator Richard S. Madaleno Jr. and DelegateBill Frick want the General Assembly to ask. On Tuesday, Senator Madaleno introducedthe Tax Credit Evaluation Act, and Delegate Frick will introduce the Houseversion shortly.

The legislature examines normal expenditures every yearthrough the budget process. Tax credits—sometimes called tax expendituresbecause they cost the state money in terms of lost revenue—are seldom revisitedonce established. Yet there are morethan 300 tax credits available in Maryland. I blogged about this issue previously in December (Moneyfor Something?) and January (Marylandsubsidy programs score B- in national study).

The Tax Credit Evaluation Act (SB 739) wouldrequire the President of the Senate and Speaker of the House to appoint acommittee to review most tax credits every five years on a rotating schedule. Each tax credit would be evaluated based onfive criteria:

the purpose for which it was established,
whether that purpose is still valid,
whether the credit is meeting its objectives,
whether the intentions of the credit could be bettermet through alternative mechanisms,
and the administrative and lost revenue costs tothe state.

The committee’s final report to the General Assembly wouldrecommend specific action on the tax credit (renew, modify, allow to expire),as well as any legislation needed to accomplish the recommendations. Without affirmative action by thelegislature, the tax credit would then expire.

The bill covers tax credits that the Institute supports,like the Earned Income Tax Credit, not just credits that benefit specificbusinesses and industries. We believe that these credits will withstand fairscrutiny, and that regular reviews will only result in their expansion andimprovement.

The Tax Credit Evaluation Act would establish a reviewprocess for tax credits that is sorely needed in Maryland. This is doubly true at a time when revenueshortfalls threaten vital services. Theprinciples of good governance and due diligence with the people’s money makethis a no-brainer. MBTPI supportedthis bill last year, and we support it again this year.

The Week Ahead

2012-02-06T17:02:00.000-05:00

We got some good news about the national economy lastFriday—the unemployment rate fell for the fifth straight month to 8.3 percent in January. And in case you missed it, MBTPI DirectorNeil Bergsman appeared on WYPR’sMidday Politics and WJZ’sOn Time with Kai Jackson, and had an op-ed in the Baltimore Sun calling for a sensible diet when it comes to thebudget.

Monday, February 6^th

Senate Health and Human Services Subcommittee holds budgethearings on the FamilyHealth Administration, ChronicDisease Services, and HealthRegulatory Commissions. 1pm in 3Miller, Senate Office Building.
House Health and Human Resources Subcommittee holds budgethearings on a variety of Department of HumanResources programs, including socialservices and childsupport. 3pm in room 150, HouseOffice Building.
House Public Safety and Administration Subcommittee holds budgethearings on parole,probation,and the Governor’sOffice of Crime Control and Prevention. 3pm in room 120, House Office Building.

Tuesday, February 7^th

Senate Budget and Taxation Committee holds budget hearings onthe Departmentof Transportation, and publicdebt. 1pm in 3 West, Senate OfficeBuilding.
Senate Capital Budget Subcommittee holds budget hearings on PAYGOacross multiple agencies. 4pm in 3 West,Senate Office Building.

Wednesday, February 8^th

House Education and Economic Development Subcommittee holdsbudget hearings on the MarylandHigher Education Commission, the University of Baltimore, and Morgan StateUniversity. 1:30pm in room 145, HouseOffice Building.
House Health and Human Resources Subcommittee holds budgethearings on various DHMH programs. 1:30pm in room 150, House Office Building.
House Transportation and the Environment Subcommittee holdsbudget hearings on the Departmentof Agriculture and the StateLottery Agency. 1:30pm in room 120,House Office Building.
House Capital Budget Subcommittee holds budget hearings onPAYGO across multiple agencies. 4pm inroom 120, House Office Building.

Thursday, February 9^th

House Environmental Matters Committee will hold a 1pmhearing on the Housing Opportunities Made Equal (HOME) Act (HB 168), whichwould prohibit housing discrimination based on source of income. MBTPI, MarylandNonprofits, and many of our partners will submit testimony in support of thisbill.
House Education and Economic Development Subcommittee holdsa budget hearing on the State Department of Education Headquarters and theMaryland Stadium Authority. 1pm in room145, House Office Building.
House Public Safety and Administration Subcommittee holds budgethearings on corrections, assessments, and the Secretary of State. 1pm in room120, House Office Building.
Senate Education, Business, and Administration Subcommittee holdsbudget hearings on the MarylandHigher Education Commission, the University of Baltimore, and Morgan StateUniversity. 1pm in 3 West, Senate OfficeBuilding.
Senate Health and Human Services Subcommittee holds budgethearings on the Alcohol and Drug Abuse Administration and the Health OccupationBoards. 1pm in Amoss, Senate OfficeBuilding.
Senate Public Safety, Transportation, and EnvironmentSubcommittee holds budget hearings on the Department of Transportation and the MarylandInstitute Emergency Medical Services Systems. 1pm in Schweinhaut, Senate Office Building.

Friday, February 10^th

House Appropriations Committee holds a budget hearing on theDepartment of Budget and Management. 1pmin room 120, House Office Building.
Senate Education, Business, and Administration Subcommitteeholds budget hearings on aid to community colleges, Baltimore City CommunityCollege, and business regulation. 1pm in3 West, Senate Office Building.
Senate Health and Human Services Subcommittee holds budgethearings on the Mental Hygiene Administration and tax assessments. 1pm in Amoss, Senate Office Building.
Senate Public Safety, Transportation, and EnvironmentSubcommittee holds budget hearings on the Department of Planning and theDivision of Pretrial Detention and Services. 1pm in Schweinhaut, Senate Office Building.

Groundhog Day: Labor Market Edition

2012-02-02T15:42:00.000-05:00

Happy Groundhog Day! While the groundhog predicted six more weeks of winter this morning, lookingat the thermometer lately I have to imagine spring is just around the corner.

But a groundhog’s shadow isn’t the only news we got thisweek. New jobs numbers for Marylandhighlight the need to prioritize investment in the building blocks of a strongeconomy, like quality schools, sound roads and bridges, and safecommunities.

Unemployment declined across Maryland in December, accordingto encouraging new numbers that the Bureau of Labor Statistics releasedyesterday. The unemployment rate droppedin all four regions of the state -- Baltimore-Towson, Cumberland,Hagerstown-Martinsburg, and Salisbury -- compared to one year ago.*

Metropolitan Unemployment Rate (not seasonally adjusted)	Dec 2010	Dec 2011	Change
Baltimore-Towson MSA	7.4%	6.8%	-0.6
Cumberland MSA	8.7%	8.0%	-0.7
Hagerstown-Martinsburg MSA	9.8%	8.3%	-1.5
Salisbury MSA	9.1%	8.6%	-0.5
Maryland	7.0%	6.5%	-0.5

Unfortunately, that doesn’t mean that the labor market isheaded for an early springtime, too. Economistsstill see shadows cast by the housing market and Congressional gridlock, amongother indicators, and are therefore predicting a continued slow economic recovery. While the numbers released this week are goodnews, it is important to remember that these unemployment rates are stillsignificantly higher than they were four years ago and mask local differencesbecause they cover large geographic areas. In reality, many Maryland communities continue to experience higherunemployment than these numbers suggest.

Given the sluggish recovery, creating jobs by investing inschools, transportation, housing, public safety, and the environment is moreimportant than ever. As Governor O’Malley emphasized yesterday in his Stateof the State address, returning Marylanders to work and helping those whoare between jobs or otherwise struggling must be a top priority. The governor’s proposed budget does justthat, and the General Assembly should take the same approach.

* BLS uses a Census Bureau geography called “metropolitan statistical areas”(MSAs). Baltimore-Towson MSA includesBaltimore City and Anne Arundel, Baltimore, Carroll, Harford, Howard, and QueenAnne’s counties. Cumberland MSA includesAllegany County and Mineral County, WV. Hagerstown-Martinsburg MSA includes Washington County and Berkeley andMorgan counties, WV. Salisbury MSAincludes Somerset and Wicomico counties.

Apply the sales tax to gas

2012-02-01T10:54:00.000-05:00

[This post has been updated and revised for accuracy]

On Monday, Governor O’Malley unveiledhis plan to improve Maryland’s roads, bridges, and transit systemsby making the first changes in the state’s gas tax in two decades. . TheMaryland gas tax has been 23.5 cents per gallon since 1992, but itspurchasing power has declined dramatically over the last twenty years, to thepoint where it now approaches that of the 1920s. With this decline in value, it’sclear why Maryland’s transportation system is in serious financial troubletoday.

The governor’s plan addresses thisproblem by phasing out the sales tax exemption for fuel over three years, whilecontinuing the 23.5 cent per gallon tax.

Maryland State Fuel Tax
	Current Tax Rate	Proposed Tax Rate	Proposed Tax per gallon *	Difference per gallon
First year	23.5 cents	23.5 cents plus 2%	29.7 cents	6.2 cents
Second year	23.5 cents	23.5 cents plus 4%	35.8 cents	12.3 cents
Third year	23.5 cents	23.5 cents plus 6%	42 cents	18.5 cents
* Assumes average price of regular gasoline is stable at $3.50 per gallon [which includes 18.4 cents in federal gas tax and 23.5 cents in state gas tax]. AAA makes available data on current state average gas prices.

Good transportation is one of thefoundations of a healthy economy, and we need to raise the gas tax to makejob-creating investments in better transit, roads, and bridges. At thesame time, applying the sales tax to gas will cost working Marylanders more,and we need to take that into account. Pairing this change in the gas taxwith strategic investments in public transportation, as well as askingwealthier Marylanders to pay their fair share of costs for vital services,are good places to start.

The Week Ahead

2012-01-30T09:27:00.000-05:00

Monday, January 30^th

House Education and Economic Development Subcommittee looksat highereducation. 3pm in room 145 in the HouseOffice Building.

Tuesday, January 31^st

Department of Legislative Services (DLS) will give a fiscalbriefing to the House Environmental Matters Committee at 10:30am.
MBTPI director Neil Bergsman will discuss the budget onMidday with Dan Rodricks at noon on WYPR (88.1 FM). Ron Wineholt, the Maryland Chamber of CommerceVice President for Government Affairs, joins Dan and Neil.
Senate Education, Business, and Administration Subcommitteemeets to discuss a variety of issues, including the Interagency Committee onSchool Construction. 1pm in 3 West, Miller Senate Office Building.
Senate Health and Human Services Subcommittee meets todiscuss the Departmentof Health and Mental Hygiene and the HealthBenefit Exchange. 1pm in the AmossRoom, Miller Senate Office Building.
Senate Judicial Proceedings Committee will hold a hearing onthe Civil MarriageProtection Act (SB 241) starting at 1pm. All Senate Bills relating to same-sex marriage will be heard on thisdate. Testimony will be limited to 2hours per side.
DLS will give a fiscal briefing to the Senate Capital BudgetSubcommittee on the capitalbudget. 4pm in room 3 West, MillerSenate Office Building, Annapolis.

Wednesday, February 1^st

Bureau of Labor Statistics releases December 2011 employmentfigures for metropolitan areas.
House Appropriations Subcommittee on Education and EconomicDevelopment meets to discuss a variety of issues, including the InteragencyCommittee on School Construction. 1:30pmin room 145, House Office Building.
DLS will give a fiscal briefing to the House Health andGovernment Operations Committee. 2pm inroom 240 in the House Office Building.
Senate Budget and Taxation Committee receives an update onhealth care reform, starting at 2:15pm.

Thursday, February 2^nd

Happy Groundhog Day! With the way this winter’s gone, it seems likely that groundhogseverywhere will predict a short season. Pleasecelebrate safely.
House Ways and Means Committee will be briefed on local aidby the Maryland Association of Counties,the Maryland MunicipalLeague, and DLS. 11am in room 130,House Office Building.
DLS will give a fiscal briefing to the Senate Education,Health, and Environmental Affairs Committee at 1pm.
Senate Finance Committee will receive an update on HealthCare Reform Implementation by the Maryland Health Benefit Exchange Board, alsoat 1pm.
House Appropriations Subcommittee on Transportation and theEnvironment will hold a budget hearing with an overview of the ChesapeakeBay. 1pm in room 120, House Office Building.

Friday, February 3^rd

Senate Budget and Taxation Subcommittee on Health and HumanServices will hold a budget hearing on the Maryland Health Insurance Plan,among other topics. 1pm in the AmossRoom, Miller Senate Office Building.
House Appropriations Committee will hold a budget hearing onthe Maryland Department of Transportation, and public debt. 1pm in room 120, House Office Building.

Details of revenue proposals emerging

2012-01-27T12:20:00.001-05:00

We are now getting some details aboutseveral of Governor O’Malley’s revenue proposals.

Sales Tax on DigitalProducts

Part of the Budget Reconciliationand Financing Act of 2012 (or BRFA), the governor's proposal would requiremerchants to collect the state sales tax on purchases of digital productssuch as music, videos, electronic books, ringtones, and newspapers based onwhere the purchaser is, regardless of where the merchant is located. While online purchases of physical goods fromout of state merchants are legally subject to tax, they are collected directlyfrom the taxpayer in what amounts to an honor system. The governor’s proposal would treat digital (i.e.non-physical) goods as equivalent to their physical counterparts and place theburden of collection back on the merchant, but opponents worry about unintendedconsequences. In the long run, thisis an issue that requires federal action, but Maryland and other states areright to do what they can in the interim.

Flush tax

The flush tax funds the BayRestoration Fund, which works to reduce pollution from wastewatertreatment, and urban and agricultural runoff into the Chesapeake Bay. Currently, wastewater treatment customers pay$2.50 per month and septic system owners pay $30 per year (the equivalentamount), regardless of how much water they use. The TaskForce on Sustainable Growth and Wastewater Disposal recommended triplingthe fee by fiscal year 2015. Thegovernor’s proposal would double the revenue collected by moving to aconsumption based system, charging $0.90 per 1,000 gallons for the first 2,000gallons per month and $1.25 per 1,000 gallons thereafter. Septic system users would see their feedouble, to $60 per year. There are someincome-based exemptions. The governorargues that the average fee would double, but some argue that the 2,000 gallonbreak between the high and low fee is toolow.

Motor Fuel Tax andIncome Tax

What we don’t have details on yet is the governor’s gas taxproposal. We do know that it will probablyraise the state gas tax between 5 and 15 cents per gallon, spread out overseveral years. For the last twentyyears, Maryland’s gas tax has been stuck at 23.5 cents per gallon, while fuelefficiency and the cost of infrastructure and maintenance keep rising. Adjustingfor inflation, Maryland’s gas tax is now at its lowestlevel since the early 1980’s. Without an increase, it will soon be atlevels not seen since the 1920’s. Thegovernor has also expressed some interest in indexing the rat e to inflation(it isn’t currently), but it is unclear how likely that is.

It is important to remember that the proposed increases for flush and fuel taxes would bededicated to their specific purposes. They do not help with the state’sbillion-dollar general fund revenue shortfall. Keep an eye out for our report next week on the proposedchanges to income tax deductions and exemptions.

Maryland unemployment rate falls again in December

2012-01-24T13:11:00.000-05:00

Maryland’s monthly unemployment rate fell again last month,to 6.7 percent,according to data released today from the Bureau of Labor Statistics. This is the lowest the rate has been sinceFebruary of 2009.

The state added 8,100 jobs in December. Unfortunately, there are still 125,000 feweremployed Marylanders than there were four years ago.

Given the continuing weak economy, Governor O’Malley is rightto emphasize jobs in recent weeks. Whether it is leveling the playing field for local employers by implementingan online sales tax, hiring new state workers in critical areas, fundinginfrastructure projects and school and rental housing construction through thecapital budget, or asking the wealthiest Marylanders to help pay for servicesto help their less fortunate neighbors, finding the revenues to pay for vitalservices is responsible governing.

On the other hand, Maryland can ill afford more job-killing budgetcuts to schools, healthcare providers, childcare centers, and other vitalservices that provide employment, help families get back on their feet, andkeep Maryland competitive. As theGeneral Assembly takes up the budget, we call on them to build on theGovernor’s proposal and pass a budget that helps low and moderate incomeMarylanders continue to recover from the effects of the Great Recession.

The Week Ahead

2012-01-23T09:24:00.000-05:00

Now that the governor has released his budget, the legislature and MBTPI are putting noses to the grindstone. Don’t forget to check back here for more post about specific aspects of the budget, and look for our Instant Analysis this week and the annual Regular Person’s Guide to the Budget in a couple of weeks.

Monday, January 23^rd

The Federal Reserve Bank provides an update on Maryland’s economy to the Senate Budget and Taxation Committee and the House Appropriations Committee at 1:30 pm in the Joint Hearing Room.

The Federal Reserve briefing is followed at 3pm by the Fiscal Briefing from the Department of Legislative Services (DLS).

Tuesday, January 24^th

The Bureau of Labor Statistics releases state unemployment figures for December 2011. Maryland’s unemployment rate fell half a percent in the first two months of the fourth quarter.

The Senate Budget and Taxation Committee has a busy briefing schedule on Tuesday:

Starting at 1pm, the committee will be briefed by the Maryland Association of Counties and the Maryland Municipal League, who will surely discuss the governor’s proposal to transfer pension costs to the counties.

Then Baltimore City Schools will brief the committee on an alternative financing proposal at 1:30pm.

Alcohol tax revenues will be the focus of the next two briefings, from the Interagency Committee on School Construction at 2pm and the Developmental Disabilities Administration at 2:30

Finally, the Maryland Alliance for the Poor (@MAPAdvocacy, blog will update shortly), which MBTPI is a member of, will brief the Senate Budget and Taxation Committee. We will be highlighting the need for critical services for Maryland’s most vulnerable and asking legislators to protect them.

The House Appropriations Committee will hold a hearing on the new youth detention facility in Baltimore City, which Occupy Baltimore brought attention to last week.

The House Ways and Means Committee will receive a fiscal briefing from DLS at 2pm in the House Office Building.

Wednesday, January 25^th

The Senate Budget and Taxation committee continues its briefings, with K-12 education at 1pm and the University Maryland’s study recommending against a College park-UM Baltimore merger at 3.

Thursday, January 26^th

The House Appropriations Subcommittees start off their agency budget hearings. The Subcommittee on Health and Human Resources holds a budget hearing on the Department of Health and Mental Hygiene, and the Maryland Health Benefit Exchange. 1pm in Room 150 of the House Office Building.

Friday, January 27^th

The House Appropriations Committee receives a Capital Fiscal Briefing at 1pm in Room 120 of the House Office Building.

This will be immediately followed by a briefing from the Maryland Alliance for the Poor, which MBTPI is a member of and will participate in. We will be highlighting the need for critical services for Maryland’s most vulnerable and asking legislators to protect them.

Governor’s budget – a solid start

2012-01-19T16:53:00.000-05:00

Governor O’Malley’s proposed budget employs elements of a balanced approach and significantly reduces the state’s structural deficit. In his budget message, the Governor emphasized creating jobs, building on our quality education system, protecting public safety and restoring the environment. The budget is relatively free of accounting gimmicks and temporary measures.

The budget makes $800 million in cuts; with the result that the state will expend fewer general fund dollars in fiscal 2013 that it does in the current year – the 2% growth in the general fund budget is wholly attributable to a required payment from the general fund to the state’s Rainy Day Fund. Some of these cuts will have severe consequences for the lives of real people. We’ll be reporting on details as we learn them. The largest cut is a transfer to Maryland’s counties and Baltimore City of responsibility for $240 million in teacher retirement costs.

The budget also uses new revenues so that our state won’t depend on cuts as the only solution to this year’s revenue shortfall. The largest revenue measure would phase out income tax exemptions and deductions for high-income filers. No one likes to raise taxes, but if you have to, it’s good to have a proposal based on people’s ability to pay. These revenue increases will be much less damaging to Maryland’s economy than would further cuts to education, healthcare and infrastructure.

In future blog posts, we’ll explore some of the specifics.

Most everyone will find some things they don’t like about this budget proposal – including us here at the Budget and Tax Institute. Overall, though, it is a very solid starting point for legislative deliberations.

Maryland subsidy programs score B- in national study

2012-01-18T09:52:00.000-05:00

Maryland is fourth in the nation when it comes toenforcement mechanisms for economic development projects that fail to meettheir performance objectives, according to a report out today from GoodJobs First (GJF). However, there isstill work to be done as Maryland only achieved a B- grade. This new report comes a month after GJF rankedMaryland fifth in terms of subsidy performance and job quality standards.

Subsidy enforcement mechanisms are a timely topic inMaryland, as several programs have been in the news recently. Officials with the Department of Business andEconomic Development (DBED) testifiedyesterday in front of the Senate Budget and Taxation Committee about twoprograms, InvestMaryland,and the JobCreation Tax Credit, which are intended to spur innovation and jobgrowth. On Monday, Lieutenant GovernorBrown highlighted a proposal that will be in Governor O’Malley’s budgetreleased later today; HealthEnterprise Zones (HEZ’s). Similar toMarylandEnterprise Zones, HEZ’s would provide financial incentives to doctors andclinics that set up shop in areas with poor health outcomes (usually poor ruralor urban areas). The House Ways andMeans Committee may also revisitthe Tax Credit Evaluation Act, which would require tax credits to undergo acost-benefit review every five years. Thebill died in theSenate last year.

Narrowing the health outcome gap is a laudable goal, as arejob creation and spurring innovation. However, as the GJF reports highlight, accountability standards andenforcement mechanisms are key to the success of any subsidy program. DBEDis rolling out a database that is a step in the right direction, andpassing the Tax Credit Evaluation Act would be another. Maryland should continue to improve itssubsidy programs, to the benefit of all Marylanders

The Week Ahead

2012-01-16T12:23:00.000-05:00

Happy Martin Luther King, Jr. Day! Today we are reminded of Dr. King’s quest forsocial and economic justice. Jobs,income, and housing were the main focus of the last few years of his life, andthat struggle continues today. At a timewhen Maryland is experiencing highunemployment, tremendous wageand income disparities, and highhousing costs, we as advocates must follow in Dr. King’s footsteps and pressour leaders in Annapolis to enact a budget and pass other legislation that strengthenslow and moderate income Maryland families.

Monday, January 16^th

Unions, civil rights organizations, Lieutenant GovernorBrown, and members of Congress and the state legislature will rallytonight to honor Dr. King and call for jobs, justice, and equality. From6pm to 8pm on Lawyers Mall, Annapolis.

Tuesday, January 17^th

The House AppropriationsCommittee receives a briefing from the DevelopmentalDisabilities Administration (DDA) at 1pm. This should be particularly interesting because of the fight last yearto increase the taxon alcohol sales to fund DDA services, coupled with the revelation inNovember that DDA returned $25million in unspent funds to the general fund.
The HouseHealth and Government Operations Committee meets to discuss the publichealth perspective on health care reform, among other topics. The briefing is scheduled for 1pm in room 240of the House Office Building, Annapolis. The SenateEducation, Health and Environmental Affairs Committee will receive asimilar briefing at the same time.
The SenateBudget and Taxation Committee meets for a briefing on property taxassessment, tax subsides, and other topics. The briefing is scheduled for 1pm.

Wednesday, January 18^th

The day we’ve all been waiting for, when GovernorO’Malley introduces his budget for Fiscal Year 2013.
The House Appropriations subcommittees hold briefings from1-3pm, including on the Bay Restoration Fund.
Good Jobs Firstpublishes the third in their series of papers on state tax subsidies. This latest report will look at enforcementmechanisms states use when projects fail to meet their goals, for example whennot enough jobs are created. I bloggedabout their secondpaper when it came out a month ago.

Thursday, January 19^th

The House Waysand Means Committee receives a tax briefing from the Comptroller’s office at 11am in room130 of the House Office Building, Annapolis.

The Maryland Health CareCommission meets at 1pm in room 100 of their offices at 4160 PattersonAvenue, Baltimore.

Friday, January 20^th

The House Appropriations and Ways and Means Committees holda joint briefing on maintenance of effort (MOE) and K-12 education. MOE promises to be a significantissue this year. The briefing isscheduled for 1pm in the Joint Hearing Room.

Coming up

Look for MBTPI’s Instant Analysis later in the week, ourfirst look at the governor’s budget. NextMonday the Department of Legislative Servicesgives its Fiscal Briefing to a joint meeting of the House AppropriationsCommittee and the Senate Budget and Taxation Committee. The schedule for other budget hearings can befound on the General Assembly’s website,and of course highlights will be provided every Monday right here on Maryland’s Money Matters.

At start of session, Governor signals a balanced approach to balancing the budget

2012-01-11T14:45:00.000-05:00

Governor O’Malley signaled his intention to adopt a balancedapproach to balancing the budget this morning at the annual Annapolis Summithosted by the Marc Steiner Show andthe Baltimore Business Journal. In addition to supporting raising the gas taxand flush tax, he indicated his support for raising the sales tax by onepercentage point as his preferred solution to the structural deficit in thestate’s operating budget. His comments are a good indication of what his budgetwill include, but we still have to wait until next Wednesday for the completepackage.

After years of job-killing cuts, the Governor’s sales taxproposal is a good way to begin a conversation about rebalancing the budget. The legislature can improve on it. A salestax increase will have a disproportionately negative effect on lower incomefamilies. This is because low-income and working families need to spend alarger share of their incomes on taxable goods compared with more affluenthouseholds. Increases in gas taxes and the “flush tax” to help Bay waterquality will also hit low-income and working families the hardest. Theseincreases should be paired with increased refundable tax credits for low andmoderate income earners.

Unfortunately, increasing the sales tax will not besufficient to protect the vital services that Marylanders depend on and thatthis state needs to prosper into the future. The legislature and the governor need to also look at developing othernew revenues sources, including closing loopholes for multi-state corporations,reinstating the millionaire’s tax, and modernizing the sales tax to includeservices.

Happy session!

MD average weekly wages high, but growth is sluggish

2012-01-10T13:03:00.000-05:00

Maryland jobs paid the 7^th highestaverage weekly wage in the second quarter of 2011, according to datareleased today bythe Bureau of Labor Statistics. Only CA,CT, DC, MA, NJ, and NY were higher. The averageweekly wage in Maryland of $987 was 3.1 percent higher than in the secondquarter one year previously.

	Employment			Average Weekly Wage
County	June 2011	% Change, June 2010-2011	National Ranking, by % Change*	Second Quarter 2011	% Change, Second Quarter 2010-2011	National Ranking, by % Change*
Anne Arundel	233,400	1.5%	82	$960	1.8%	238
Baltimore County	363,300	-0.4%	248	$906	1.1%	280
Baltimore City	329,000	-0.2%	237	$1,034	3.3%	101
Frederick	92,100	-1.4%	293	$861	1.1%	280
Harford	84,800	2.8%	22	$890	8.8%	3
Howard	153,700	1.5%	82	$1,080	4.9%	30
Montgomery	453,000	1.1%	114	$1,213	3.3%	101
Prince George’s	301,700	-0.4%	248	$981	2.1%	209
Maryland	2,513,500	0.5%		$987	3.1%
* National rankings are out of the 323 largest counties.

These figures are calculated based on where jobs arelocated, not where workers live. Therefore it is not surprising that Baltimore City had one of thehighest average weekly wages in the state at $1,034. Harford County saw greater growth in averageweekly wages between the second quarters of 2010 and 2011 than in almost everyother county in the country, and Howard County wasn’t far behind. Yet growth in average weekly wages inBaltimore County and Frederick County was in the bottom twenty percent ofcounties nationwide.

Today’s numbers confirm that, while Maryland is doing wellrelative to the rest of the country, the state’s economy is still recoveringslowly from the Great Recession. As weprepare for the opening of the legislative session, we are reminded once againthat manyMarylanders are still struggling to make ends meet. We will be working hard to make sure thelegislature and the governor prioritize those most in need, raising neededrevenues and resisting further job killing cuts. We hope you’ll join us, starting withtomorrow’s Save Our State rally inAnnapolis.

The Week Ahead

2012-01-09T10:00:00.000-05:00

Monday, January 9^th

We’re at the MarylandNonprofits Legislative Preview this morning from 8:30am to 12:30pm at the Doubletree Hotel, 210 Holiday Court, Annapolis. A few spaces are still available for walk-inregistrations.

Tuesday, January 10^th

The Bureau of LaborStatistics releases county-level employment and wage data for the secondquarter of 2011.

Wednesday, January 11^th

The 2012 Legislative Session starts at noon.

Save Our Statehas a rally at 10am in the Public Lounge in the Taylor House Office Building.

Thursday, January 12^th

Legislative committee hearings begin.

Friday, January 13^th

The Commissionto Study Campaign Finance Laws has a meeting at 1pm in Room 130 of the HouseOffice Building, 6 Bladen Street, Annapolis. The Commission will consider potential recommendations to be included intheir initial report.

The Week Ahead

2012-01-03T10:11:00.000-05:00

MBTPI’s blog has a newname! I hope everybody had a restfulholiday, storing up energy for the impending legislative session.

Wednesday

The Bureau of Labor Statistics will release November 2011 unemploymentnumbers for metropolitan areas.

Thursday

The HealthCare Reform Coordinating Council meets at 1pm in the Joint Hearing Room ofthe Legislative Services building, 90 State Circle, Annapolis.

And next Monday

Maryland Nonprofits’ 2012Legislative Preview is from 8:30 to 12:30 at the Doubletree Inn,Annapolis. Once again they have a greatlineup of speakers, including our own Neil Bergsman. Don’t forget to register! Tomorrow (January 4^th) is the lastday for regular registration.

Last Week’s Highlights

The big highlight of last week (other than the name change) wasthat our office moved! We’re now located at 1500 Union Avenue, Suite 2500, Baltimore, MD21211. We will have limited access to phones andemail today, but feel free to drop us a line and we’ll get back to you as soonas we can.

Welcome to Maryland's Money Matters

2011-12-27T11:02:00.000-05:00

The people have spoken. The blog of the Maryland Budget and Tax Policy Institute is now "Maryland's Money Matters." Congratulations to Bonnie Braun at the University of Maryland - College Park. And thanks to everyone who nominated names and voted.

Happy Holidays from MBTPI

2011-12-23T14:39:00.000-05:00

MBTPI is on vacation next week, so the blog will be dormantas well. Please note that our office is moving over the holidays. Starting January 3^rd, we will belocated at 1500 Union Avenue, Suite 2500, Baltimore, MD 21211.

Have a safe and happy holiday!

A Christmas (Budget) Carol

2011-12-22T09:54:00.000-05:00

My family and I love to see Charles Dickens’ Christmas Carol performed at this time of year. (I must admit that the Muppets’ version with Michael Caine is one of our favorites.)

Ebenezer Scrooge’s London is apparently the ideal model for the “you’re on your own” crowd in America today. Scrooge and his fellow financiers and factory owners are able to create great wealth, free of any government constraints. They keep most of this wealth for themselves. As a result, the mass of workers are on starvation wages. Poverty is the norm. Working conditions are inhumane and unsafe. Scrooge's clerks don't have the coal they need to keep warm. London’s factories pollute the air, creating Victorian London’s famous “pea soup fog.” Without access to affordable health care, Tiny Tim is doomed.

Those were the good old days of limited government, and free markets unconstrained by regulation that today’s conservative activists seem to want back.

The conditions Dickens portrayed in 1870’s London were real. The rest of the story is a fantasy. There were no ghosts of Christmas past, present and future to convince the Scrooges of the day to mend their ways. Instead, the determined efforts of real workers, leaders of the labor movement, progressive public officials, conscientious citizens, “muckraking” journalists, and responsible business people over many years brought about reforms through public policies. These policies included restrictions on child labor; a five-day work week; minimum wages; unemployment compensation and injured workers’ compensation; progressive taxation; safety and sanitary regulations; and many other measures that we have taken for granted for decades.

Today, we must rebuild and re-energize the progressive coalition to protect these reforms and to expand opportunities. We can start with a few good policies here in Maryland in 2012:

A budget that protects education, health care, and supports for families struggling in the poor economy.
A law to end housing discrimination based on the tenants’ source of income.
An increase in the state minimum wage to cover Maryland’s actual cost of living.

The ghosts of Christmas will not be calling on Governor O’Malley and the members of the legislature to promote these policies. We need to do that.

Happy Holidays to you all. We look forward to working with you in 2012 to help Tiny Tim and all of Maryland’s Cratchits.

Spending Affordability Committee recommends a path to structural balance

2011-12-21T13:16:00.000-05:00

Last week, the Maryland General Assembly’s Spending Affordability Committee issued its final report. The committee’s major function is to issue a recommendation for how much the budget for the coming year should be allowed to increase. The recommendation is not binding – either on the governor or the legislature.

However, the legislature generally uses the spending affordability recommendation as a policy target. If the governor’s proposed budget exceeds the recommendation, the legislature will usually cut it back.

This year, the committee’s major recommendation is that the 2013 budget should “reduce the estimated structural deficit for that year by at least 50%.”

The “structural deficit” is a measure of the state’s fiscal sustainability. Every year the state is required to balance its budget. During the recession and its aftermath, it has done so by depending on temporary measures to stay in the black, such as drawing down funds that have built up in the state’s accounts. This can get us through a rough year or two or four, but it means we always have a new budget problem the next year.

The committee estimates the structural deficit at $1.1 billion, so the recommendation requires $550 million in ongoing budget balancing actions –revenue increases or more budget cuts. By cutting the structural deficit in half, the committee aims to restore the state’s financial health without abrupt disruptions to education, health care, and other state-funded functions.The recommendation is sensible and responsible and the governor should seek to meet it.

However, in doing so, the Governor should use a balanced approach. Maryland has already cut $2 billion from annual spending for education, health care, transportation, public safety, and other important services since 2007.

Source: Spending Affordability Committee, October 2011

Further cuts are going to throw more Marylanders out of work; damage the services we need now from our state counties and schools; and withdraw the investments we need to secure Maryland’s prosperous future. It’s time to turn to some reasonable and fair revenue options.

Unemployment falls, but still twice the rate in 2007

2011-12-20T12:04:00.000-05:00

Maryland’s unemployment rate continued to fall inNovember, according to data released today bythe Bureau of Labor Statistics. Afterrising to 7.4 percent in September, the state unemployment rate fell to 7.2percent in October and 6.9 percent in November.

While this is good news, the state’s jobs crisis is farfrom over. There are still 134,000 fewerMarylanders working today than when employment peaked in February 2008.

As the governor prepares his budget and the legislature readiesfor the 2012 session, it is imperative that they craft a budget that focuses oncreating jobs for Marylanders through increases in targeted spending funded by new revenue streams. The Capital Debt Affordability Committee hadthe right idea yesterday, when they recommended issuing an additional$150 million in state bonds to fund needed infrastructureinvestments now rather than later, creating construction jobs and takingadvantage of low borrowing rates. Marylandcan’t afford more job-killing budget cuts.