April 12, 2010
Dear Friends:
Thank you for your emails, letters and phone calls during the 2010 Legislative Session. Your input is invaluable. I enjoyed the opportunity to speak with many of you on the phone and, as usual, I was impressed with your knowledge of the various issues we were addressing this session. Many issues were passionately debated in both the House and Senate resulting in various degrees of compromise.
I sponsored two pieces of legislation which passed during the 2010 session. HB 821 – Net Energy Metering – Fuel Cell passed both chambers by a unanimous vote. It was so well received that each member of the Economic Matters Committee asked to be a cosponsor on the bill. I’m very excited about this bill as it has the potential of providing Marylanders with another source of lower cost energy that is environmentally friendly. The fuel cell will join solar panels and wind turbines as a reliable cost saving alternative to traditional power sources. Maryland will be the first state on the east coast to offer this alternative fuel source as an option. By the end of this calendar year, we expect fuel cells to be used to provide electricity on the commercial level.
My second piece of legislation that passed was HB 825 –Vehicle Laws – Required Security – Minimum Amounts. HB 825 raises the basic amount of liability insurance that one must carry on a vehicle. Current law requires $20,000 for bodily injury or death of a single individual and $40,000 for two or more individuals. HB 825 increases the $20,000 to $30,000 and the $40,000 to $60,000. The original amounts were enacted in 1972 to cover medical bills, lost wages and pain and suffering. These amounts have not been increased in 38 years and need to be increased to reflect the cost of these items today. Under the current levels, many victims are not even able to cover their medical expenses. This change will only affect individuals who carry basic coverage. Almost 90% of insured drivers choose to carry a higher level of coverage.
Several of Governor O’Malley’s bills were approved by the General Assembly. I cosponsored and strongly supported SB 106 (HB 92) – Job Creation and Recovery Tax Credit which provides a $5,000 tax credit per employee for any business that hires an unemployed worker between now and December 31, 2010. Each employer may claim a maximum of $250,000 in tax credits. A total of $20 million in credits was approved in the FY 2011 budget. The General Assembly also approved SB 107 (HB 91) – Unemployment Insurance. This bill will assist employers in paying their unemployment taxes and returns the trust fund to solvency by securing $126.8 million in federal money without imposing any costs on employers. By adopting certain modernization measures the bill will also make more workers eligible for additional benefits. After months of negotiations, this bill was approved by business and labor representatives, legislative leaders and the Administration. Both of these emergency bills were signed into law by the Governor on March 25, 2010.
The most divisive issue of this Session was the BUDGET. The FY 2011 budget grows by only 1.1%, exclusive of federal funds and reserve funds. The final budget includes $919.4 million in total reductions. In spite of these reductions, funding is maintained for core State services and priorities including public education, higher education, Medicaid, human services and public safety. The projected general fund balance at the end of FY 2011 is $195.5 million in addition to maintaining a 5% rainy day fund of $633 million. Total available cash will be $829 million. K-12 education aid will be about $5.7 billion, an increase of $209.1 million (3.8%). The budget fully funds the major aid programs. Maryland’s state colleges and universities are essentially funded at the 2010 level. After four years of an in-state undergraduate tuition freeze, tuition will only increase by 3.0%. The Biotech Tax Credit is increased from $6 million to $8 million in fiscal FY 2011. Other actions on the budget will significantly reduce out-year budget gaps. We are still projecting deficits of about $1.5 billion per year for the next four fiscal years (instead of $2.5 billion) so we will need to continue our efforts in prioritizing both spending and reductions within the state’s budget.
The Counties and Municipalities are again taking a big hit by losing local highway monies. There is basically no new money for road repairs or new projects. State employees will not receive any cost of living increases, step increases or 401K matches in next year’s budget. For a third year in a row, they will be required to take furlough days. They will take up to 10 furlough days depending on their salary. This year, I personally took eight furlough days and will again take the same number of days as other state employees. The final budget also cuts an additional 500 positions. Over the past four years, we have eliminated 4,000 State government positions.
The FY 2011 Capital Budget includes $250 million for school construction. Montgomery County will receive $25.9 million with about 10% still to be allocated. District 39 did well on local bond projects. We will be receiving $20,000 for the Lake Whetstone hillside stabilization project; $30,000 for the Montgomery Village Martin Roy Park Pavilion; $100,000 for CSAAC group homes and $100,000 for the Cinnamon Woods lighting upgrades. These projects will help our community to maintain important green areas and needed services. See attached chart for other local projects.
Many of you wrote in opposition to transferring pension costs to the counties. You will be happy to hear that the General Assembly approved the Budget Conference Committee report rejecting the shift of these costs. The State will continue to pay for teacher retirement. The General Assembly established a “Public Employees’ and Retirees’ Benefit Sustainability Commission” to take a look at these costs. You will need to stay vigilant on this issue, as it will probably come up again with our continued financial status. The General Assembly approved HB 223 (SB 476) – Maintenance of Effort – Penalty, this bill eliminates the Maintenance of Effort penalty for FY 2010 saving Montgomery County $24 million. I also heard from a lot of you on the “BOAST” bill. This bill concerning tax incentives for donations to private school scholarship programs and other education-related nonprofits was voted unfavorable in the Ways and Means Committee just before adjournment.
The General Assembly approved SB 590 - Fairness In Negotiations Act. This legislation establishes a process for a neutral Public School Labor Relations Board to decide labor disputes between local public school employers and local public school employees within a specific time frame with a decision that is binding on both parties. This Public School Labor Relations Board is similar to the two existing Labor Relations Boards in Maryland settling labor matters for higher education employees and for State employees. Thirty-two other states already have similar Labor Relations Boards, including neighboring Delaware. In order to prevent gang recruitment and expansion in schools across the State, the General Assembly passed HB 1160 – Safe Schools Act of 2010. This bill expands the types of crimes that law enforcement must report to school personnel if a child is arrested and requires the creation of a statewide model gang policy for local school systems. It also requires the development of an assessment of intervention and prevention programs that schools can access.
Many thanks for keeping in touch during the 2010 Legislative Session. I know that the state and our country are going through some tough economic times. Your ideas and comments are always appreciated so please let me hear from you during the interim period. My legislative aide, Rebekah Wallace, will be in the Annapolis office on Monday and Thursdays. I can be reached by calling or emailing my Annapolis office or my District office. Keep in touch and I hope to see you in the neighborhood.
Sincerely,
Delegate Charles Barkley
Attachments:
Capital Projects
Direct State Operating Aid