Dear Constituent,

The 2012 Budget Highlights

In 2007 the structural budget deficit was addressed by raising $2 billion in new taxes. In 2011, we are still in the same dire situation. Instead of reining in spending during these perilous times we have increased the risk to future tax payers to satisfy special interest groups and unions. Last week, the Governor restored $58 million of the per-pupil cuts previously made in the Governor’s budget. He requested that it would be restored in the House Appropriations Committee (after a “March on Annapolis”).

Tax increases are not on the menu this year but we have fee increases in several areas that will touch people’s wallets.  When we have a special session to deal with Congressional Redistricting in the fall, will there be an appetite for more taxes? What a shame we cannot live within our means without further increases on our hardworking families!

Let me take you through the math from the State Expenditures-General Funds from page 8 of the House Appropriations Committee Report on House Bill 70-The Budget Bill and House Bill 72- The Budget Reconciliation and Financing Act, dated March 21, 2011.

On the Grand Total line, Adjusted Working Appropriation for 2011 for state expenditures is $13,228,000. The 2012 Appropriation is listed as $14,629,000. an increase of 10% or $1,401,000. for one year.

The Treasurer’s office listed that the state’s revenue projections will average around 3%.

If you look at page 3: the Administration Proposal total expenditures lists $14,636,400., the Appropriation actions of $14,629,900. This is a $6.5 million difference. We have a $34 billion dollar budget and to cut
only $6.5 million from it is a miniscule amount of .0004%. Come on!  This would equate to a family making $50,000./year and cutting $20.00 from what they earn.

The members of the Republican Caucus offered a plan that trimmed $651 million from the budget.  It would allow a savings for the future unexpected expenses and keep tax increases at bay.  We offered
cuts and level funding, not to backfill and spend the saving on new projects.

Our credit card budget leaves future generations at risk of affording our greed today. Is that responsible?

The budget is balanced but at what cost?  The 2012 increased by $1 billion from $33.1 billion to $34.1 billion.  Maryland found the increases from the following maneuvers:

The budget includes numerous fees, taxes, and assessments.  I think we all learned during the last campaign that a tax is a fee and a fee is a tax.  Here are some of the fees/taxes/assessments passed by the House leadership in Annapolis:

• Car titling fees increased from $50 to $100
• Land recording fees increased from $20 to $40
• Birth certificate fees increase from $20 to $40
• Hospital assessments increased 2.5%
• Nursing home assessments raised to 5.5% from 2%  2 years ago
• Parole supervision fees increased $25 to $50 per month
• Construction tax – 2% tax on IWIF worker’s compensation insurance + $4 million from IWIF – IWIF insures a majority of the construction companies in MD

The House Leadership is proposing new revenue streams to fund their spending habit and costing more from you.

I voted against the House bill 70 and House Bill 72 in its current state. I am unsure what the Senate will change when the Bill passes back from their House. I will keep you updated on the changes they make.

Below is the link from The Baltimore Sun, “O’Malley budget clears House hurdle, More fees, more money for education and counties” by Annie Linskey.  It outlines what Republicans did on the House floor and
what the burden of increased taxes/fees will mean to your family.

Article Link: http://www.baltimoresun.com/news/maryland/politics/bs-md-house-budget-debate-20110322,0,3464205.story

Dear Constituents,

Due to an oversight, I wanted to let you know my position on the bills I mentioned last week:

• Illegal immigrants and instate tuition for college students, SB 167 I will vote against this bill if it comes to the House Floor.
• Motor Vehicle Fuel Taxes, HB 1059 I will vote against this if it comes to the House Floor
• Texting while Driving, HB 196 I voted for this bill.

Increasing the Cost of Higher Education in Maryland – Fee or Tax?

When is a fee a tax?  That was a question that has been answered on Governor O’Malley’s TV commercial as:  “If more money comes out of my pocket, it is a tax”.

What responses would you expect to hear from parents and students who attend the University of Maryland System Schools if there was an increase in tuition?  I bet it would be vocal and heated.

What if the education cost at University of Maryland was increased through the back door, not as an increase in tuition but through fees, would you notice?  Would the increase in the cost of education concern you?   It is true that tuition was frozen for four years and last year tuition increased 3%. If I told you that the fees are going to increase and you wouldn’t be aware of it until you paid your bill for your education, how would you deal with that?

This year the University of Maryland System wants to increase their debt capacity by $200,000,000.00 for a total of $1,400,000,000.00.  This debt is not the debt of the State because it is backed by the auxiliary fees (fees and rents arising from the use of the auxiliary facility) and academic fees (tuition and student fees).  We are increasing the cost of education for our college students, but not through tuition.

In order to keep the high ratings from the rating agencies, the system must have 55% of outstanding debt supported by a reserve fund.  If the debt capacity is increased to $200,000,000.00. the System must keep a 55% reserve fund, which will make the increase closer to $300,000,000.00. for this additional increase.  Students will have to pay this.

The question is:  “Is a fee a tax”?

It will cost more to educate your student through hidden fees. I voted against House Bill 748 – Academic Facilities Bonding Authority

House Bill 234 – Alcoholic Beverages – Direct Wine Shipper’s Permit.

I have been a co-sponsor of this bill for the last three legislative sessions.  Unfortunately, this bill has never made it out of the Economic Matters Committee and has failed

The bill requires that a person be permitted as a direct wine shipper by the Comptroller’s Office before engaging in direct wine shipping. To qualify for a direct wine shipper’s permit, the applicant must be (1) a person licensed outside of the State to engage in the manufacture of wine; (2) an authorized brand owner of wine, a U.S. importer of wine, or a designated Maryland agent of a brand owner or U.S. importer; (3) a holder of a State issued Class 3 manufacturer’s (winery) license or a Class 4 manufacturer’s (limited winery) license; or (4) a person licensed by the State or outside of the State to engage in the retail sale of wine for consumption off the premises. The direct wine shipper must ensure that all containers of wine shipped directly to a consumer in the State are conspicuously labeled with (1) the name of the direct wine shipper; (2) the name and address of the consumer who is the intended recipient; and (3) the words “Contains Alcohol; Signature of Person at Least 21 Years of Age Required for Delivery.” A direct wine shipper must also (1) report quarterly to the Comptroller’s Office the total amount of wine, by type, shipped in the State, the price charged, and the name and address of each purchaser; (2) file a quarterly alcoholic beverage tax return; (3) pay quarterly to the Comptroller’s Office all sales and excise taxes due on sales to personal consumers in the State, calculating the amount of the taxes as if the sale was made at the delivery location; (4) allow the Comptroller’s Office to audit the direct wine shipper’s records on request; and (5) consent to the jurisdiction of the Comptroller’s Office or other State unit and the State courts concerning enforcement. A direct wine shipper is prohibited from shipping more than 24 9-liter cases of wine annually to any one individual or delivering wine on Sunday to an address in the State. The Comptroller’s Office may adopt regulations for the issuance and enforcement of the provisions of this permit.

I am hopeful that this year this bill will make it out of committee and come to the House floor for a full vote. There are amendments being considered by the Economic Matters Committee on this bill. The sponsor, Delegate Ivey, indicated that it has not been voted on; however they have eliminated shipping directly to the retailers and will allow vineyards to direct ship to the consumer.  One other aspect that is being considered is permitting the shipping of wine of the month clubs. We will keep you updated as things progress.

House Bill 940 – Counties – Kennel Licenses – Requirements for Breeders

This bill requires a person or breeder to obtain a kennel license if they own or have custody of 10 or more unspayed dogs over six months old and intends to breed and sell the offspring. By January 15 of each year, each county must report the information collected for the preceding year to the Department of Labor, Licensing, and Regulation (DLLR).

Under current law, there are no statewide license or fee requirements for dog breeders in Maryland. Dog owners must obtain a license for each dog kept in the State. Specific provisions related to the licensing of dogs vary from county to county. In most counties, the owner of a dog over six months old must apply for a one-year license on or before July 1 of each year. While many counties are authorized to set their own dog and kennel license fees, (and a few others are authorized to also set terms and/or forms for such licenses), in general, the fees for dog licenses are $1 for each male or spayed female dog, $2 for each unspayed female dog, $10 for a kennel license for owning or keeping up to 25 dogs, and $20 for a kennel license for keeping more than 25 dogs.

This bill requires that each county that does not currently license kennels must establish a licensing program and maintain records in a manner specified by the bill. Counties must train animal control officers to collect these records during routine inspections. Finally, the counties must compile records and submit them to DLLR by January 15 of each year. As a result, the bill may have an operational or fiscal effect on some counties. In turn, the counties may increase or establish additional kennel licensing fees to cover the costs of maintaining the records required by the bill.

I support this bill.

Update on Illegal Immigrants

The State of Maryland is currently breaking law.  Maryland taxpayers have supported in- state tuition to illegal aliens who attend Montgomery Community College to the tune of $5.8. million dollars.  The Federal Government states that illegal aliens are ineligible for state or local benefits including post secondary education benefits such as reduced tuition.  Maryland’s current law requires the colleges to charge out of state tuition for non documented aliens.

Tuition and fees paid by students constitutes less than a quarter of the colleges revenue, the remaining three quarters are supported by state and federal funds, or taxpayer funded.

Non Documented aliens usually do not have the capacity to establish residency in Maryland as their illegal status makes them eligible for deportation at any time.

This bill reflects poor judgment that is why I do not support it.

We are heading into the final weeks of session.  I appreciate your views and opinions on bills that come before the legislature.

Dear Constituents,

Over the past few weeks, I have received thousands of phone calls and/or emails expressing either support or opposition to Senate Bill 116 – Civil Marriage Protection Act.  I wanted to inform you that this bill came to the House Floor for a vote today.  After several hours of discussions and personal reflections on the House Floor, Delegate Vallario, Chairman of the Judiciary Committee, recommitted the bill to the Judiciary Committee.  The outcome is uncertain.

Life Sentence – Parole with- out the signature of the Governor

Currently, a Maryland inmate serving a term of life imprisonment may only be paroled with the approval of the Governor. House Bill 302, as amended and given preliminary approval by the House, now provides that if the Patuxent Institution Board of Review or the Maryland Parole Commission decides to grant parole to an eligible prisoner sentenced to life imprisonment who has served 25 years without application of diminution credits, and the Governor does not transmit a written disapproval of the decision within 90 days, the grant of parole becomes effective. I think this another attempt to water down our laws that should protect us.  I voted against this bill.

Illegal immigrants and instate tuition for college students

A Senate committee significantly amended and favorably reported Senate Bill 167 to exempt specified individuals who attended and graduated from Maryland high schools from paying out-of-state tuition at a community college. These persons are also exempt from paying out-of-state tuition at a public institution of higher education in Maryland if they first attend a community college in the State and are awarded an associate’s degree or obtain 60 credit hours. Additional qualifications for the exemption require that the individual must:

• have attended a secondary school in the State for at least two years;
• have graduated from a high school in the State or received the equivalent of a high school diploma in the State;
• register as an entering student at a community college within four years of graduating from high school;
• register at a public four-year institution within four years of obtaining an associate’s degree or 60 credits; and
• provide documentation that the individual or the individual’s parent or guardian has had Maryland income tax withheld during the year prior to high school graduation and annually before, between, and during attendance at community college and/or a public institution of higher education.

An individual who qualifies for the exemption and is not a permanent resident must also provide an affidavit stating that the individual will file an application to become a permanent resident within 30 days after becoming eligible to do so. Documented immigrants who are in the country on student visas do not qualify for the exemption, but otherwise the exemption applies regardless of residency status. The governing board of each public institution of higher education must adopt policies to implement the bill. House Bill 470,  the original companion measure, is scheduled for House committee consideration next week.

Motor Vehicle Fuel Taxes

House Bill 1059  increases the State motor fuel tax rate for all fuels, except aviation gasoline and turbine fuel, by 20 cents per gallon. After an initial increase of 10 cents per gallon, the remaining rate increase is phased in semi-annually by 2 cents per gallon over two years. In fiscal 2012 and 2013, the bill requires a transfer of motor fuel tax revenues to the general fund in an amount equal to the revenue generated from the 10 cents per gallon tax increase. The bill takes effect July 1, 2011. Companion bills, Senate Bill 714/House Bill 1001, beginning July 1, 2011, increase the State motor fuel tax rate for all fuels, except aviation gasoline and turbine fuel, by 10 cents per gallon. Under the bills, beginning July 1, 2013, the motor fuel tax rate is effective for one year and every subsequent year, on July 1, the motor fuel tax rate must be increased in accordance with the annual percentage growth in the construction cost index, up to one cent per gallon annually; or maintained at its current level if there is no increase in the annual percentage growth in the construction cost index. Beginning July 1, 2011, State vehicle registration fees increase by 50% for all classes of vehicles.

Texting While Driving

House Bill 196 passed the House with the addition of several sponsors. It prohibits a driver from reading any text message while in the travel lane of a roadway, whether or not the car is in motion. A companion bill, Senate Bill 424, passed second reading in the Senate without amendment, although floor amendments were offered.

I appreciate your views and opinions and please continue to keep me informed.

Dear Constituents,

On March 1, 2011, the House Republican Caucus‘ alternative budget proposal was presented to the Appropriations Committee.  Minority Leader Tony O’Donnell and Minority Whip Jeannie Haddaway-Riccio made the presentation but our Republican Delegates on Appropriations, including Delegates Bates, Beitzel, Eckardt, McConkey,Szeliga, Stocksdale and I worked tirelessly on crafting the proposal.  The House Republican Caucus is taking a firm stand to reduce spending, not just this year, but long-term.  By reducing spending, we’ll also be on a parallel track of reducing Maryland’s onerous tax burden, particularly sales, gas, and business taxes by FY2014 and 2015. I believe it is very important to research and offer recommendations so that Marylanders are relieved from increased taxes and expenses.

The entire presentation on our budget proposal can be viewed here: http://marylandhousegop.files.wordpress.com/2011/03/house-republican-caucus-fiscal-vision-for-maryland-2012.pdf

Some key points to know about Governor O’Malley’s budget versus our proposal:

Our plan reduces state spending by an additional $621 million in FY 2012 and holds growth at 2% for Fiscal Years 2013-15.  The plan allows for 4% budget growth in FY 2016.  It replenishes the Transportation Trust Fund without increasing the gas tax.  It also reverses the raiding of the Bay Restoration Fund and Program Open Space of cash and funding the projects with debt.  The plan allows for a gradual rollback of the increases in the sales and corporate income taxes beginning in FY 2014 making Maryland a more business-friendly state.

Transportation Trust Fund:
I wanted to include some background on the Trust Fund.  The Maryland Department of Transportation (MDOT) is structured as a special funded agency. Transportation funding in Maryland occurs through the Transportation Trust Fund and the Transportation Authority Fund. The Transportation Trust Fund receives funding from the motor fuel tax, motor vehicle titling tax, corporate income tax, rental vehicle sales tax, sales and use tax, operating revenues from transit, port, and aviation fares and fees, federal funds, and various other income sources.  All MDOT expenditures are made through the Transportation Trust Fund, including debt service, operating costs, the capital program, and support to local governments. The Transportation Authority Fund is funded primarily with toll revenues.  Maryland’s citizens, residents and businesses alike, expect that taxes and fees assessed for using the transportation system will be used to maintain and expand that system. The portions of Maryland’s sales and use tax and corporate income tax dedicated to transportation serve as the means for businesses and other indirect beneficiaries of transportation to support the infrastructure. Despite the intent to dedicate these revenues to transportation uses, large transfers from the Transportation Trust Fund to the General Fund have occurred over the years. While the majority of these transfers have been repaid, a significant amount, especially from the local government portion, approximately $997 million has not been replenished.

House Bill 518: Transportation Trust Fund Protection Act :
This bill sponsored by Delegate Krebs had an extensive hearing on February 22, 2011 in the Appropriations Committee. The bill requires that the funding structure remains intact and the funds collected through the sources mentioned above continue to be used to insure our roadways and bridges are drivable and reliable.  Over the past few years our State’s Budget has experienced issues with meeting our obligations and turned to the TTF as a way of continuing operations.  Most of the money that the Governor borrowed from the TTF was repaid except for what was borrowed from the portion that goes to local governments.  The amount not repaid to the locals amounted to over $900 million.  The locals still need to do road and bridge repair but the funding has been swept and they have been left with dealing with the issues within their own resources. The pressure has been hard to deal with especially with the amount of snow and salt needed in the last few years.

Last year Governor O’Malley had a bill to give an incentive to small businesses who hire new employees; the employer would receive $5000.00 per qualified new hire. This incentive was paid for by funds diverted from the Transportation Trust Fund. In addition to lower funds coming through because of the recession, the General Assembly diverted Highway User Funds from the local governments for road maintenance and it has had a negative effect.

Some on the Appropriations Committee stated that having a Constitutional Amendment would limit the flexibility to respond to pressing needs that Government may run in to. There is a provision that allows for catastrophic needs in the bill. I think that flexibility is already restricted by the undisciplined budgeting and spending by the Governor. We need to put the TRUST back in the Transportation Trust Fund. I support Delegate Krebs’ effort in HB 518.  The Budget Bill for FY 2012 requires the TTF to put $39 million into the Rainy Day Fund; I ask why is it the responsibility for the TTF to have to divert funds for this purpose?

HB1001 Transportation Trust Fund-Financing- Use of Funds:
Generally requires the same protections as HB518 through a constitutional amendment but this bill provides for an increase in taxes:

• Ten-cent increase in the fuel tax effective July 1, 2011
• One-cent maximum annual increase in fuel tax beginning 2013 indexed to the construction cost index (CCI) and
• 50% increase in the annual vehicle registration fee.

This legislation is consistent with the findings of the Blue Ribbon Commission on Maryland Transportation Funding that Maryland’s transportation system is facing a fiscal crisis.  I understand the needs but feel additional taxation at this time, when our economy is trying to recover, will have detrimental effect on our citizens and businesses. We, the Government need to evaluate the new programs being suggested and postpone some until our State’s economy recovers.

I appreciate your input and please continue to keep me informed of your views and opinions.