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General Assembly of Maryland 2014

Dec 30, 2013 11:21AM ● By Cate Reynolds
BY LEN LAZARICK

The next election is always in the back of the mind of legislators, but for the 2014 session of the Maryland General Assembly, this year’s election is front and center, especially since the new June primary date comes just 11 weeks after the session wraps up.

“I think it will throw a new dynamic into it,” House of Delegates Speaker Michael Busch of Annapolis says. To comply with a federal law to accommodate military and overseas voting, the state moved the primary from September to June 24th, with early voting starting June 12th. “Everything will be more highlighted,” says Busch, who will be running for his eighth four-year term.

Seven of the 141 members in the House of Delegates are running for statewide office, including Ron George of Arnold for governor and, on a separate ticket, Jeannie Haddaway of Talbot County for lieutenant governor. They will be “posturing” or “positioning” themselves in voter eyes, Busch says. Others are running for Senate, and even more are retiring.

“There will be a lot of legislation,” Nic Kipke of Pasadena, the new House Republican leader, says. Of course, even in a slow year, more than 3,000 bills are introduced.

“That will be more about messaging voters than serious or substantive issues that will be dealt with,” Kipke says. With the primary so close, that “will entice some delegates to use the session as a playground for their political ambitions.”

But not to worry, assures Sen. Joan Carter Conway, chairman of the Education, Health, and Environmental Affairs Committee, “I don’t really believe there will be a lot of contentious legislation,” and, if there is, the committee chairs like herself will shove them into the chairman’s drawer, never to be acted on after a hearing. “You know we have deep drawers,” Conway says.

No increases in taxes, but minimum wage hike eyed

Various taxes and fees have been raised almost every year in the past eight, but tax hikes are generally off the table in an election year. Lawmakers will be looking for positive programs that don’t require higher taxes and are even looking for ways to cut some of the tax increases they enacted in the recent past.

Top of the list is increasing Maryland’s minimum wage from $7.25 to $10 or higher. The proposal went nowhere last year, dying in the Senate Finance Committee, despite the backing of progressive and labor groups.
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But in recent months, Busch, Gov. Martin O’Malley, and Senate President Mike Miller have gotten on board in support of the increase. “The preference for everyone would be to have sort of a national standard,” Busch says, but any wage hike is stalled at the federal level. Maryland already has its own generous Earned Income Tax Credit supplementing the incomes of low-wage earners.

“They’re certainly getting their ducks in line” to raise the minimum wage, says Sen. Steve Hershey, the Queen Anne’s County delegate chosen to represent the Upper Shore after the abrupt departure of Sen. E.J. Pipkin last August.

Business groups such as the Maryland Retailers Association and the National Federation of Independent Business are expecting an uphill battle to stave off any increase that will put upward pressure on pay scales.

Only the minority Republicans are inclined to challenge the push. “Some people are going to make more and some people are going to lose their jobs,” Hershey says, citing the recent experience in Connecticut, where the minimum wage was raised.

Kipke points out that only 2 percent of Marylanders make the minimum wage and 85 percent of them are 16 to 24 years old. “For many of these people, it is their first job,” Kipke says. “I think there is a lot to lose. It will do more harm than good.”

This is a tough political argument to make, giving the prevailing mood of the electorate. Two statewide polls in the fall found Marylanders strongly back raising the minimum wage, and there was majority support among Democrat, Republican, and independent voters.

Tax cuts may be on the agenda

Tax cuts are often popular in election years. The one getting the most serious attention is the corporate tax rate, raised six years ago in Maryland to 8.25 percent. That is 2 percent higher than our most economically competitive neighbor, Virginia.

Business groups are focused just as much on Maryland’s high personal income tax rates. The Greater Baltimore Committee, in particular, has created a private commission to make recommendations on easing the tax burden.
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There are much fewer traditional corporations than there are chapter S corporations and sole proprietors, where the owners pay personal income taxes on their earnings.

“When you want to help business, that’s where you have to cut it,” Hershey says. “Small businesses don’t benefit from” a corporate tax cut.

Kipke says Republicans will be pushing for an income tax reduction for all Marylanders, as much as a 10 percent reduction. “We think all Marylanders are paying too much for government.”

Even a far left progressive, such as Democratic Del. Heather Mizeur, who is running for governor, agrees. But other progressive groups are organizing to fight attempts to cut taxes because they believe it will hurt the social programs they support.

Speaker Busch said any tax cuts should be focused on creating jobs, still the most serious economic need.

There also will be efforts to reduce or eliminate the so-called “rain tax” that suburban counties such as Anne Arundel County were required to impose on home and business owners. These stormwater runoff fees don’t apply to the Eastern Shore, where there are continuing concerns about mandated pollution reduction from septic systems and agriculture.

On both sides of the Chesapeake Bay, the highest priorities for county and municipal governments is a replacement of their highway user revenues, which the state dramatically cut back to use on its own road and transit needs. The near loss of their share of the transportation taxes have left counties and towns struggling to pay for road maintenance.

Deficits come back

Any talk of tax reduction or new programs is complicated by the resurgence of structural deficits. For seven years running, the state has had less revenue than the expenditures on programs it has promised to fund, especially local school aid.

Gov. Martin O’Malley and the General Assembly thought they had the problem largely cured last year with a combination of tax and fee hikes and reductions in mandates spending. But it has come back like a bad rash.
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“I was surprised and quite candidly disappointed,” Busch says, of the state being possibly $400 million in the hole for next year’s budget.

To balance its budget, the state has also been taking cash out of special funds raised by dedicated taxes such as Program Open Space and the Chesapeake Bay Restoration Fund, and replaced the money with bond debt to be paid off in later years with interest.

Reductions and uncertainties of federal government spending, which fund many Maryland-based agencies and government contractors, have eroded state revenues.

These reductions in federal spending from sequestration and the October government shutdown have reduced Maryland income and sales tax revenues.

Congress again will confront the same issues in early 2014, causing a loss in consumer confidence.

“The federal government has been no help to the states” recently, Busch says. He believes much of the session will center around budget issues. The most controversial social issues have been tackled, he says, passing gay marriage and stricter gun control, while abolishing the death penalty.

“In tough times, we’ve pulled together to do some pretty difficult things,” the speaker says.

“The state has money coming in by the dump truck load” due to tax hikes during the O’Malley-Brown administration, says Senate Republican Leader David Brinkley of Frederick County.

“Some of the job creators are leaving the state” due to those tax hikes, he says. In addition to the tax cuts mentioned earlier, Brinkley hopes the gas tax increase can be trimmed, as well.

Len Lazarick is the editor and publisher of MarylandReporter.com, a news website on state government and politics. Any opinions expressed within are the author’s own work and do not necessarily reflect those of the publication.