February 9, 2010

Dear Constituents,

Another week in Annapolis proved to be less then exciting and exposing more of our fiscal problems to come.

GENERAL OBLIGATION BONDS

Bond bills are introduced each year that aim to support specific projects in the State. These capital projects must serve a wide spectrum of public purposes. The bonds that are issued are General Obligations bonds and are sold with a single coupon rate of 5% for 15 years. The debt service for the General Obligations bonds are funded almost entirely through property taxes. In Appendix F of the 2010 Budget Highlights has a worrisome note that the “Property tax collections are not expected to keep up with the debt service payments, thus requiring additional general funds effective in Fiscal Year 2011.” If the State of Maryland accepts more Bond Bills and increases our General Obligations, the funding of the debt service may increase property taxes. This year, Fiscal Year 2012, the O’Malley administration has provided $15,000,000 in the budget for Bond Bills.

Cutting back on grants and bonds when the State is facing debt service requirements that will out-pace property tax revenues is a sensible action to take.

UNEMPLOYMENT INSURANCE

In 2009 the General Assembly passed an expansion of the Unemployment Benefits, HB 740 which will take effect in October 1, 2010. This expansion has caused many businesses to realize up to 300% increase in their bi monthly payments. Unemployment benefits are paid by the employer in the form of unemployment taxes, any increase in benefits necessitates an increase in taxes on business.

House Bill 740 expanded the Unemployment benefits to part time workers. The Department of Legislative Services Issue Papers, 2010 Legislative Session, states “Maryland employers will pay from the highest tax rate table for calendar 2010 due to the low balance of the Unemployment Insurance Trust Fund.” When the funds are fully depleted, states may borrow from the Federal Government’s unemployment trust fund. The amount borrowed should be paid back within one year in order to prevent interest from accruing. Under the Obama plan states were required to amend their UI statute in-order to qualify for additional funds. These changes would include: (1) making part time workers eligible for benefits; (2) providing coverage to individuals who separate from work for compelling family reasons (illness of a family member, safety reasons due to domestic violence, change in spouse’s employment location); (3) providing Workforce Investment Act training benefits for at least 26 weeks in high demand industries; or (4) adding a $15 weekly allowance to UI payments for dependents.

As reported in the Baltimore Sun paper on January 21, 2010 Maryland is seeking a short-term advance (loan) around $250 Million from the Federal Government so the state can continue paying unemployment benefits. Maryland currently pays out $22 million a week to residents who lost their job through no fault of their own. The effect of the increases on the Unemployment Insurance to businesses has been devastating. I have received a number of emails form business owners in my district who are worried about how they can afford the increase in rates and stay in business. One employer stated that she employed 50 people and her rates went from $800.00 every two weeks to $3800.00. It is crushing and businesses are locked into this without an appeal process for hardship.

LEGISLATION

I am sponsoring a bill entitled, Public Safety-Electronic Control Devices-Training Program and Permit Process. In light of the recommendations from the Attorney General’s report on electronic weapons, I have selected two points that will strengthen the training and permit process for citizens.

This bill would prohibit a person from possessing or using an electronic control device unless the person has been issued a certain permit. It would prohibit the sale and activation of an electronic control device in the State unless the purchaser provides valid proof to the seller that the purchaser has completed successfully an electronic control device training program approved by the Maryland Police and Correctional Training Commission.

Another bill that I am sponsoring is Public Schools – Maryland Youth Crisis Hotline – Distribution of Information. This bill would require each county board of education to provide certain students with the telephone number of the Maryland Youth Crisis Hotline. It would also require certain schools to hold a school assembly at a certain time each year. It would also require certain schools to send certain information about the Maryland Youth Crisis Hotline to the parents or guardians.

I hope that you and your family stay warm and safe during these extreme weather conditions.

Kindest Regards.

Very truly yours,

Susan L.M. Aumann

This entry was posted on Monday, March 1st, 2010 at 4:05 pm and is filed under General, Legislative Updates. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.