2014 Minority Report

 

The Minority Report 2014 End of Session Greetings from the 434th Legislative Session! As the 2014 Session comes to a close we wanted to update you on the major issues of the past 90 days. Thank you for connecting with us and please share this with friends, family and colleagues as well as on your own social media sites! This newsletter will switch to monthly in the interim period from April - December. Budget & Taxes Operating Budget. The FY2015 Budget increases spending by $1.6 billion dollars from last year’s budget and over $10 billion (35%) higher than the first O’Malley/Brown budget in 2007. The budget also robbed dollars from the pensions of Maryland’s employees and retirees to balance the budget. The House Republican Caucus has a solid history of offering credible alternatives to the uncapped spending frenzy that has characterized the O’Malley/Brown Administration. Since 2007, we have offered a variety of alternatives that included zero growth, cuts, and slow growth. Few organizations in this state have done more work to fight against the reckless spending of the O’Malley/Brown Administration. Over the years it has often been like walking uphill through setting concrete, but our members know the taxpayers deserve more than what they have been given by the O’Malley/Brown Administration. This year, our Caucus members offered a series of budget amendments to again reduce state spending and put Maryland on a path of fiscal responsibility.  Our amendments included an across-the-board cut of $364 million, which restored the dollars stolen away from Maryland’s pension fund, and left a fund balance of $186 million in unspent dollars to cushion against any revenue shortages.  Additional amendments offered to the budget would have cut spending even further. Delegate Justin Ready offered an amendment that would eliminate funding for Maryland’s Health Exchange, saving the taxpayers $72 million. Delegate Cathy Vitale offered an amendment eliminating the funding for the over-priced move of a state agency where the taxpayers were on the hook for millions just for new furniture. This saved the taxpayers $4.8 million. Delegate Mark Fisher offered an amendment to eliminate the controversial Film Tax Credit program, saving $7.5 million. Delegate Cluster offered an amendment to return the operation of the scandal-ridden Baltimore City Detention Center back to Baltimore City, the only local detention center operated by the State. Once fully implemented, this would save the taxpayers $140 million. Other members offered amendments to eliminate funding for things that state tax dollars just should not pay for. Delegates Aumann and O’Donnell offered amendments that would significantly curtail the tax dollars spent for Medicaid abortions. Delegate McDermott offered an amendment eliminating funding for ballistic fingerprinting and an amendment to direct Maryland’s Stem Cell funds only to projects involving adult stem cells. In total, our caucus amendments would have reduced spending by nearly $600 million, kept pension payments on track, and left a cushion if revenues fell short like they did earlier this year. Capital Budget. As rapidly as state spending has grown over the last eight years, the growth in state debt has also been rather dramatic. While there are certainly many worthwhile, projects in the Capital budget, Maryland’s debt far exceeds the taxpayers’ ability to pay for it. There are many good projects in the Capital Budget, but many of them are outside the scope of how government should be spending taxpayer dollars. It is charitable giving with taxpayer dollars. It may feel good, but it is not the job of government. Maryland’s debt payments, commonly called “debt service” are funded primarily by the revenue from the property tax; a revenue source which has flat-lined over the last several years due lower property values statewide. To cover shortages, Maryland has supplemented debt payments with dollars from the General Fund. But, Maryland’s General Fund is facing significant deficits in the coming years, and will not be able to cover these growing shortages.  Without supplements from the General Fund, Maryland’s only other option would be to increase the state property tax. As much as a 70% increase in property taxes could be needed to cover Maryland’s debt payments.  After more than 80 tax, fee, and toll increases over the last several years, another tax increase is NOT something our citizens can afford. In many ways, what we do in the Capital Budget is like using our children’s credit cards. We run up debt in their names, reap the benefit of all the projects, and then we leave the responsibility of paying to future generations. House Republican Tax Relief Plan. HB0326, The Income Tax Relief Act of 2014, was the House Republican’s signature tax relief proposal for the 2014 Session. Since the start of the O’Malley/Brown Administration there have been more than 80 tax, fee and toll increases, resulting in $8 billion in new revenue to the state, increasing each household’s tax bill by $4,000. HB0326 would have lowered the income tax rate by 10% over the next three years and brought much-needed tax relief for all taxpayers, regardless of their income. Unfortunately, the Democratic majority killed this bill and it never received a committee vote. Estate Tax. After ten years of advocacy by the House Republican Caucus and Delegate Susan Krebs (Carroll), the House and Senate finally voted to loosen the grip of Maryland's high Estate Tax. The bill recouples the tax with the federal exemption by 2018. Our members were pleased to see their Democratic colleagues coming around on this issue and finally realizing that Maryland’s tax climate is driving citizens and their resources out of this state. While our members believe in the complete elimination of death taxes, they supported any reduction that alleviates the crippling tax burden placed on Maryland’s citizens. Corporate Income Tax. There were four separate corporate tax bills (HB0170, HB0330, HB0339, and HB0457) introduced this year which would have reduced the corporate tax rate from 8.25% to as little as 4%. Our members see the reduction of the corporate tax rate as good for Maryland.  It encourages new corporations to come to Maryland and companies that are already here to invest more heavily in the state all the while creating new jobs for Marylanders. Unfortunately none of the bills made it out of committee. Rain Tax. In 2012, Maryland lawmakers passed HB0987 – The Stormwater Management-Watershed and Restoration Program, known today as the “Rain Tax”.  The purpose of the legislation was to reduce the pollution levels in the Chesapeake Bay. Funding for the program was to come from taxing Marylanders on anything that prevented rain water from reaching the earth.  Our members agree that the Chesapeake is one of the State’s greatest natural treasures and keeping it healthy is a laudable goal, however the Rain Tax is not the way to go about it. Given the disparate ways in which it is being implemented and the fiscal impact on our small businesses, churches and charitable organizations, the Republican Caucus introduced legislation that would have repealed or modified the tax. The Rain Tax repeal effort, HB0050, was championed by Delegates Norman and Vitale. Unfortunately, the Democratic Speaker of the House Mike Busch declared that such legislation was dead on arrival. He was correct. The bill was referred to the House Environmental Matters Committee where it received an unfavorable vote. However, restricting the Rain Tax got a bit of new life during the budget negotiations between the House and the Senate, and in a bit of good news, Frederick and Carroll counties are now exempted from the Rain Tax.     HEALTH CARE Health Care Exchange. One of the largest financial fiascos to hit the State in years is the Maryland Health Care Exchange. After spending $150 million on a computer system that didn’t work, wrangling more money out of the legislature to cover those individuals who were not able to sign up before the deadline and increasing the number of personnel in the call center from 100 to 400; the entire system will be scrapped. With less than a week in the Session, Governor O’Malley announced that Maryland will be transitioning to the Connecticut system. The cost? No one knows for certain, but an emergency contract for $50 million has been approved to pay the contractor that will handle the transition. According to testimony earlier this month by Secretary Joshua Sharfstien, the chairman of the Maryland Health Benefit Exchange, 60,000 Marylanders have enrolled in qualified health plans sinceJanuary 1. When you consider a Baltimore Sun report from November which stated that based on information from the Maryland Insurance Administration, approximately 73,000 policy holders around the state would be losing their health care coverage because of plans not grandfathered in under Obamacare, it seems that Maryland is actually losing ground. It gets worse. The Office of Legislative Audits issued a rather scathing report after their examination of Maryland’s Health Exchange. In the thousands of pages of documents turned over to the auditors, 26% of the documents were “heavily redacted”. Thomas Barnickel, the Legislative Auditor wrote in his report “Generally we were unable to determine who the key decision makers were, and what decisions were attributable to them.” Why the disaster?  It started with Governor O’Malley’s rush to make Maryland the first state in the nation to implement Obamacare and ended with Lt. Governor Brown’s failure to properly oversee the construction and implementation of the exchange. Even more outrageous has been the Administration’s complete lack of accountability for the screw-ups, and Democratic leadership circling the wagons to protect Lt. Governor Brown from the political fallout. EDUCATION Common Core. Concerns about the transition to Common Core in Maryland’s public schools prompted several bills to slow down and even abandon it’s implementation. HB1164 established a Work Group that would study and oversee the implementation of Common Core across the state. Delegate Pat McDonough (Baltimore County) attempted to amend the bill to include parent representation within the Work Group, but the amendment was defeated. A majority of our members supported the establishment of the workgroup. Additionally, Delegate Ron George (Anne Arundel) submitted HB0925 that would have given each county the ability to set their own timeline for Common Core implementation. Despite being co-sponsored by many of our members, the bill died in the House Ways and Means Committee. LEGAL MATTERS “Bathroom Bill” SB0212 – The Fairness for All Marylander’s Act of 2014, nicknamed the “BATHROOM BILL” passed the Senate by a vote of 32-15 and the House by a vote of 82-57.  While the bill was advertised as a way to prevent discrimination against transgendered individuals, there were several unintended consequences of the bill that caused the Caucus to oppose it.  The chief concern was with public facilities, specifically restrooms, locker rooms, dressing rooms, etc. that are traditionally designed for separate genders. There was nothing in the bill to prevent sex offender or some other person with nefarious intent from posing as a transgendered person just to gain access to such a private facility. Our members do not believe that because someone is transgendered it automatically means that they’re a sex offender. But, we do believe that people who prey on children would abuse this law and use it as another opportunity to gain access to children. The Caucus presented and supported several amendments that would eliminate these private facilities from the bill. Unfortunately all of the amendments were rejected. Marijuana Decriminalization. SB0364, that would decriminalize possession of “small” amounts of marijuana, was resurrected at the 11th hour of the 2014 Legislative Session. As passed, the bill makes the possession of 10 grams or less of marijuana a civil offense, like a parking ticket. Driving will impaired by marijuana would be prohibited. A first-time offender would pay a $100 fine, and second offenses would be $250 and $500, respectively. The House amended the bill to require offenders under 21 be evaluated and potentially referred to substance abuse counseling, and mandated a court appearance after the third offense for offenders under 21. While the bill was passed by the House and the Senate, it is still unclear if Governor O’Malley will sign it into law. The majority of House Republicans opposed this bill because it sends a message, especially to young people, that drug use is OK. Amidst the current issues in our state with youth drug abuse, most of our members felt that this bill gives greater access to a known “gateway” drug and will be a step backwards in keeping Maryland’s kids away from controlled substances. ELECTIONS Preventing Voter Fraud. HB1406, sponsored by House Minority Leader Nic Kipke (Anne Arundel) and Delegate Kathy Afzali (Frederick), HB1406 would increase the amount of time county boards of election must retain voter authority cards to 48 months. This would ensure that when investigating and prosecuting voter fraud, authorities would have a longer time to access the voter authority cards as evidence. This bill passed the House and the Senate and awaits Governor O’Malley’s signature to become law. HB0212, The House unanimously passed a bill sponsored by Delegate Kathy Afzali (Frederick) that would make it easier for the State Board of Elections to remove the names of dead individuals from voter registration rolls by using federal Social Security Administration data to purge the rolls. It is estimated that there are as many as 20,000 such names on current rolls. The legislation would streamline the system and make it easier for these names to be removed. The bill’s crossfile in the Senate also passed and this measure awaits Governor O’Malley’s signature. PUBLIC SAFETY Baltimore City Detention Center. In the wake of the widespread scandal at the Baltimore City Detention Center in which nine correctional officers from the Baltimore City Correction Center were convicted of criminal activity, members of the House Republican Caucus introduced legislation to bring changes to the operation of the center.  Both HB0081 and HB0084 would have prohibited individuals, as well as correctional officers, from distributing telephonic devices and accessories or contraband to individuals incarcerated at the Center failed in committee.  However, HB962, which would require that the State begin to polygraph all correctional officer applicants in order to identify individuals with gang affiliations passed the House, but died in the Senate. In addition, Delegate John Cluster (Baltimore County) also submitted legislation HB1274 to return ownership of the Baltimore City Detention Center to Baltimore City. This location is the only detention center in Maryland that is run by the State Department of Corrections. All others are operated by counties and/or local municipalities. Unfortunately, this bill was killed in committee. In addition, the Caucus also supported a budget amendment that would have removed state funding for the Baltimore City Detention Center to achieve the same goal. That amendment was defeated. Speed Cameras. House Republicans unsuccessfully attempted to ban speed cameras with amendments to HB 929. And while we would like to see speed cameras completely eliminated in the State, many of our members supported measures that would reform the way speed cameras operate and give drivers more protections. The legislation raises the standards for speed camera vendors, ensures investigation of erroneous tickets and tightens the definition of a "school zone." Our members offered numerous amendments, including one by Delegate Steve Schuh (Anne Arundel) to completely eliminate speed cameras in Maryland and another by Delegate Kelly Schulz (Frederick) to ensure that cars with legislator license plates would receive the same treatment as those without and lawmakers would not receive special exemptions. In addition Delegate Justin Ready (Carroll) offered an amendment to only activate speed cameras in work zones when work was happening.  LABOR ISSUES Minimum Wage. Governor O'Malley's signature legislative priority of the 2014 Session would raise Maryland's minimum wage from $7.25 to $10.10 an hour (a 39% increase over the next three years). HB0295, passed the House despite House Republican efforts to lessen the negative impact of a minimum wage increase on Maryland's low wage workers and employers, but unfortunately a majority of Democrats were more interested in furthering the Presidential ambitions of Governor O'Malley and election year politics than enacting policies that would actually create jobs and stimulate economic prosperity for low-wage workers. A minimum wage increase is effectively a job killer and job tax. A small victory form the House Economic Matters committee held the minimum wage for tipped workers at $3.63/hour. After moving to the Senate, the minimum wage bill underwent the following significant changes:   Minimum wage will be increased incrementally and reach $10.10 by 2018 Wages for state-supported development disabled caregivers would increase by 3.5% annually through 2018.   According to the Congressional Budget Office, a non-partisan analyst in Washington DC, raising the minimum wage to $10.10/hour will cost the nation half a million jobs. In Maryland, this extreme hike will cost our state nearly 12,000 much-needed jobs. The caucus supports helping the working poor through other alternatives such as the Earned Income Tax Credit and cut in the Income Tax Rate; but a minimum wage of this nature does nothing to help low-wage workers - it will put them on the unemployment line. STATE GOVERNMENT Legislator Salaries. The subject of automatic pay increases was a heated issue during the 2014 Legislative Session. Since the start of the Session, House Republicans attempted to force a vote to block automatic pay increases but were twice thwarted by the Democratic Majority who buried the resolutions in the House Rules Committee. A letter was also sent to House Speaker Michael Busch in February protesting the increases. House Republicans oppose these pay increases because the job of a legislator is supposed to be a part-time. It’s a job you take for the honor of serving the public, not for a salary. Maryland has a citizen legislature and being a Delegate or Senator was never designed to be full-time employment. This pay increase becomes even more hypocritical as we learned last month that Maryland lost more than 10,000 jobs in February. The legislators that want to give themselves a raise are the same legislators that raised taxes, tolls and fees more than 80 times over the last 7 years and continue to promote policies that are costing Maryland much-needed jobs as citizens have to work even harder to make this state their home. Legislative Transparency. The Caucus tried again to bring transparency to the legislative process when Delegate Michael Hough (Frederick) introduced HB0177. The bill would have required live and archived video of both Senate and House Sessions as well as each standing committee and voting session. Unfortunately efforts failed as the bill never made it out of committee.    About the House Republican Caucus The Maryland House Republican Caucus is comprised of the 43 Republican members of the House of Delegates, all of whom are dedicated to fighting the good fight for the issues of individual liberty and personal responsibility. Ably led by House Minority Leader Nicholaus Kipke and House Minority Whip Kathy Szeliga, the House Republican Caucus is committed to enacting real change in the state of Maryland through lower taxes, smaller government, and the protection of family values.