Conservation Groups, Counties Fighting Proposed Cap on Open Space Funding

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Partners for Open Space prepared this infographic to oppose the diversion of open space funds.

Partners for Open Space prepared this infographic to oppose the diversion of open space funds.

Environmental and land conservation advocates, along with county officials across the state, are gearing up to fight a Senate Budget Committee proposal to limit Program Open Space funding to $100 million a year.

The Maryland Association of Counties said the cap on open space funding would result in “devastating” cuts of as much as $263 million over the next five years.

“These reductions … would affect the State’s and local government’s ability to preserve open space, shorelines, and waterways while providing recreational opportunities,” MACo’s blog told local officials, urging them to contact their senators and delegates.

Program Open Space is funded by 1/2% tax on all real estate transfers, but this dedicated pot of money has been repeatedly raided to fund other programs.

Extra money for stormwater remediation

Sen. James Ed DeGrange called for any money the transfer tax generates over $100 million to help with stormwater remediation. He said it should go to the State Highway Administration as part of its Watershed Implementation Plans.

The state has in effect been replacing cash with loans by diverting over the years much of the open space money from the transfer tax to the general fund, and replacing it with bond funds.

DeGrange, who serves on the state’s Capital Debt Affordability Committee, said, “We’re concerned about getting close to our limit” for bond debt.

By capping the amount spent on open space programs, the Senate committee would reduce the amount of bond debt the state would use to replace the open space money diverted for other programs.

Any extra money would go to fix polluted stormwater runoff from state highways, rather than for buying or maintaining state and local parks and recreation areas.

Open space money can not only be used to acquire farmland and forest, but it also goes toward development and rehabilitation of recreational facilities built on open space.

Unmet needs

“The funds are urgently needed,” said Dru Schmidt-Perkins of 1000 Friends of Maryland, one of the Partners for Open Space, a coalition of environmental, conservation and recreation groups.

According to a fact sheet from the Partners for Open Space, $1 billion has been diverted from the transfer tax for open space over the four-decade life of the program.

Some of those unmet needs include:

  • 148 family farms which are waiting to sell the state development rights to their farmland
  • $1.7 billion in local park and recreation projects,
  • and $178 million in what the partners call “high quality ecological, recreational, public access, coastal resilience and community connections projects” in the pipeline.

“It’s not a slush fund to be used by the Senate for other purposes,” Schmidt-Perkins said.

She said the House Appropriations Committee in the past has sided with the Program Open Space advocates in resisting attempts by the Senate to divert the money.

“Yes, we’ll see this in conference,” when the House and Senate attempt to resolve any differences on the state operating and capital budget.

By Len Lazarick

Len@MarylandReporter.com

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If Legislators Don’t Vote, They Get a 16% Pay Raise

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If legislators do nothing to stop it in the next 19 days, members of the Maryland General Assembly elected this fall — including probably two-thirds of the current members — will get a 16% raise over the next four years, bringing their annual salaries to $50,330. They currently make $43,500 for what is technically a part-time job.

Lawmakers have already allowed the next governor to get a 20% raise to $180,000 by doing nothing to stop it in the first 45 days of the current session.

The lawmakers have not had a raise in eight years; the governor’s salary has been $150,000 for nine years.

The raises come through the decisions of two separate salary commissions created in the Maryland constitution that requires outside bodies to recommend changes in salaries, pensions and expenses for the top elected officials. If the legislature does not lower or reject them, they go into effect automatically — without any senator or delegate having to take a vote on their own pay or that of the governor.

Republican resolutions reject pay hike

The only potential roadblock to next year’s pay hikes are resolutions introduced by all 12 Republican senators and 38 of the 43 Republicans in the House of Delegates.

Both resolutions sit in the Rules Committee of each house, committees dominated by the Democratic leadership where most resolutions are sent to die.

The Senate Rules Committee has not even had a hearing on the resolution late-filed on Feb. 27 and the House has had two brief hearings where only two delegates spoke in favor of rejecting the pay hikes.

“I just think salary increases should be based on some goals, like unemployment figures,” said Del. Wade Kach, the lead sponsor who is a 40-year House veteran running for the Baltimore County Council.

On Dec. 16, the General Assembly Compensation Commission recommended the pay hike based on the cost of living increases for the past eight years and likely COLAs in the next four years. Kach said at the very least the increase based on projected inflation should be cut.

May be no opportunity for a vote

“As time goes by, the chances of [the resolution] passing are diminished,” Kach said. “If it’s put in a drawer in Rules, we won’t have an opportunity to vote it up or down.”

Rules Committee Chair Anne Healey pointed out that, “We hardly ever do resolutions at all,” and wouldn’t predict whether the committee would take a vote.

House Minority Whip Kathy Szeliga, one of five Republicans on the 24-member committee, said, “We’re going to try to see what we can do to get it out.”

One possible move is to petition it out of the Rules Committee, but that would require the signature of 47 members — meaning some Democrats would need to sign on.

Here is the report of the General Assembly Compensation Commission. It includes history of pay increases, comparisons with other Maryland officials and other states, and reports on use of expense accounts.

In 2010, the legislature rejected a recommended pay increases that would have been based on reducing the unemployment rate.

Here is the report of the Governor’s Salary Commission, and the story about its recommendations.   

Original story>

By Len Lazarick
Len@MarylandReporter.com

Higher Wages for State-Funded Construction Pass Senate, House

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Construction workers by RICarr on Flickr Creative Commons

Construction workers by RICarr on Flickr Creative Commons

Workers on many local school construction projects would be paid at a higher rate under a prevailing wage bill approved Tuesday by the Maryland Senate.

The bill would increase overall construction costs by as much as 5%, estimates the state Department of Legislative Services.

Republican legislators were critical of SB 232, sponsored by Baltimore County Democrat Norman Stone. The bill passed 32-15 and requires that local governments pay the prevailing wage if the state has contributed 25% of funding or more to a school construction project.

Any other public work project valued at $500,000 or higher will be built by workers paid at prevailing wage if the state has subsidized 50% of the project, which is current state law.

Prevailing wage intended to promote fair compensation

The measure, along with prevailing wage requirements as a whole, is pro-union and meant to ensure construction workers are paid adequately. The state Commissioner of Labor and Industry determines the fair prevailing wage.

The bill would likely only affect 10 of Maryland’s 23 counties — those with school boards which accept roughly 50% from the state to fund school construction projects. The Department of Legislative Services estimated that overall construction costs would rise as much as 5%.

Construction Photo by RICarr on Flickr Creative Commons

Construction Photo by RICarr on Flickr Creative Commons

The areas likely impacted would be Anne Arundel, Baltimore, Calvert, Carroll, Garrett, Kent, Montgomery, Queen Anne’s, Talbot and Worcester counties.

Republicans question higher project costs as result of bill

Republican Sens. Allan Kittleman of Howard County and Stephen Hershey Jr. of the Upper Shore were particularly critical of the legislation, citing high labor costs for prevailing wage workers.

Kittleman, a member of the Task Force to Study the Applicability of the Maryland

Prevailing Wage Law, called it unfair that the local governments would need to scrape together money themselves to supplement the higher pay for the workers.

Kittleman’s task force has investigated the issue of prevailing wage laws for more than a year, but has yet to conclude whether projects associated with prevailing wages cost more in the long-term.

“By adopting this legislation, we’re going to make it harder for our local school systems to build more schools,” Kittleman said. “We’re going to make it harder to have better quality in those schools and I just think it doesn’t make sense to encourage our school systems to pay more.”

Hershey also raised concerns about the cost.

“I’ve been in construction management for many years,” Hershey said. “And with prevailing wage – union-rate jobs — they cost more up front.”

Varies by county

Prevailing wage rates vary by county and type of worker. For instance, an electrician in Montgomery County would be paid $40 an hour under prevailing wage, while in Carroll County an electrician is paid $35.10 an hour. All prevailing wage positions pertain to construction or other workers, such as bricklayers, painters or plumbers.

While legislators are considering raising the minimum wage for all workers to $10.10 an hour from $7.25, a common or unskilled construction laborer in Anne Arundel County would make $15.47 an hour according to prevailing wage state guidelines. In Frederick County, the same laborer might make $18.67 an hour, or $12.70 in Queen Anne’s County.

The bill supersedes local laws exempting certain projects from prevailing wages. In Montgomery County, for instance, the law states that school projects are exempted from prevailing wage requirements. But all counties would be subject to the stipulations of the bill, according to Sen. Thomas Mac Middleton, D-Charles County and chair of the prevailing wage task force.

All projects within the University System of Maryland and private nonprofit higher education institutions are also exempt from the bill.

Proponent argues prevailing wage would promote skilled workers

Middleton called on the legislature to look past the costs on paper.

“With prevailing wage, you get more skilled workers and if you don’t get skilled workers you get the job training component vs. the non prevailing wage where you just don’t have that. Besides the dollar value, you have to look at … the millions of dollars the state of Maryland has just dropped in job training,” Middleton said.

The House version of the bill, HB 727, passed 90-46 Monday, with some Democrats joining near unanimous opposition by Republicans in both chambers.

By Jeremy Bauer-Wolf

Jeremy@MarylandReporter.com

Senate Rejects GOP Cuts to $39 Billion Budget, Miller Gripes About Environmental ‘Whackos’

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With minimal debate, the Maryland Senate rejected a half dozen Republican attempts to further trim Gov. Martin O’Malley’s $39 billion budget Wednesday, and gave preliminary approval to the spending plan that will be sent to the House this week.

The Senate Budget and Taxation Committee ultimately cut $492 million from the current budget and O’Malley’s proposal for next year, partly to make up for lowered revenue estimates in both years.

The overall fiscal 2015 budget will spend $1.7 billion more than last year, a 4.5% increase. Some of the biggest gains are in spending on medical assistance and welfare, with federal dollars funding most of those gains.

Screen Shot 2014-03-13 at 2.55.58 PMBudget Committee Chairman Ed Kasemeyer called it a “lean budget.”

“The committee worked very hard to protect programs and services, to honor the recently ratified collective bargaining agreement, and to leave a fund balance [surplus] of at least $100 million in addition to 5% in the rainy day fund,” Kasemeyer said.

Much of the budget cuts came from a $200 million reduction in extra pension contributions that were originally intended to be $300 million each year.

 1% across-the-board cut proposed

Senate Minority Leader David Brinkley proposed an additional across-the-board reduction of 1% in the general fund, saving another $162 million. State agencies “should be able to function properly” with 99% of what they requested.

“The current crisis that we’re in was manufactured by the governor,” Brinkley said. “He wasn’t willing to make the tough calls.”

Kasemeyer said the committee had discussed across-the-board cuts, but determined “that’s a meat-clever approach.”

Brinkley’s amendment failed 12-34 in a straight party-line vote.

The Senate also rejected attempts to cut funding for stem cell research and for state-paid abortions based on the mental health of the mother. Republicans said the state had paid for 49,485 abortions since the year 2000 based on the “mental health” provision of state law for Medicaid-funded abortions.

The anti-abortion item picked up a few Democratic votes, but failed 16-29, as did an attempt to cut funding for stem cell research, and proposal to withhold money to fix the Health Benefit Exchange website.

Miller decries use of bay fund votes by environmentalists

mike miller

Senate President Mike Miller

Sen. Bryan Simonaire, R-Anne Arundel, sought to prevent any further diversion of money from the Chesapeake Bay Trust Fund.

“People support the bay overwhelmingly,” said Simonaire. “People want us to clean the bay.”

He said $125 million had been diverted to other programs over the past five years.

His amendment to prevent that was rejected 12-33. Senate President Mike Miller warned that such votes have been used by environmental groups to lower the rating of senators who basically support the environment.

“That’s how these whackos work,” Miller griped, clearly annoyed. He eventually calmed down, calling them “uncalled for remarks.”

“This is about the elections,” he said.

March 13, 2014 at 7:43 am

By Len Lazarick

Len@MarylandReporter.com

Senate Passes Compromise Bill On Dog Owner Liability

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In a unanimous vote Friday, the Maryland Senate passed legislation that would hold owners of all dog breeds liable for bites, but allow owners to challenge that liability in court and let a jury decide.

The bill has been the subject of lengthy debate. In what lawmakers called a “compromise” between the House and the Senate, the measure holds the owner liable if their dog attacks someone, but the owner also has a right to offer a defense to a court jury. The measure states that evidence that the dog caused an injury or death creates the rebuttable presumption of whether the owner knew, or should have known, that the dog had dangerous propensities.

Sen. Robert A. Zirkin, D-Baltimore County, voted for the bill despite earlier, strident opposition. “I think it is a much better compromise,” Zirkin said.

Zirkin had publicly opposed prior versions of the measure, stating that it did not provide adequate protection for dog-bite victims. In prior interviews, Zirkin said that he wanted to make sure the right bill passed and that he would not relent. “I don’t care if I am the only one left standing.” Zirkin said early February.

Lawmakers have tangled over similar measures in the wake of a 2012 Maryland court ruling that pit bulls are inherently dangerous.

The bill is next headed to the House of Delegates, where Delegate Luiz Simmons, D-Montgomery, said Friday that he would support the measure.

Simmons said that there were parts of the initial bill that both the House and the Senate did not like, but he and Sen. Brian Frosh, D-Montgomery, worked together on a compromise.

Simmons said the matter of “strict liability” was one of issues from the bill that needed compromise because no other area of law places strict liability on the owner, including automobile accidents.

He also said that the widely debated “one free bite rule” is not applicable under the measure. The measure passed Friday does not require proof that a dog has previously bitten someone. Instead, it requires that a dog has shown a past propensity for violence, such as aggressive behavior.

“I can live with it.” Simmons said of the amended measure passed by the Senate. “I am going to support the bill that comes over.”

Simmons said that he doesn’t have a problem with the amendments, but thought it “unwise” for the Senate to add amendments, because it undermines the process and may complicate passage in the House.

“If we amend it, it isn’t a compromise,” Simmons said he previously told House members on the subject of possible amendments. He said that now, because the Senate bill passed with amendments, this may “open the floodgates to everyone that has amendments.”

By 
Capital News Service

Marijuana Legislation Could Save or Cost Taxpayers More

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Screen Shot 2014-03-03 at 11.10.32 AMTwo bills aiming to decriminalize or legalize marijuana heard in a Senate committee last week could potentially bring in millions in new revenue for the state, or could wind up costing taxpayers more than ever.

Proponents of the bills point to possible savings on jail time, courts and police, not to mention extra income from taxes on what is now illegal.

To get at these potential savings and earnings though, Maryland taxpayers will have to shell out $8 million on implementation.

Even if the bills do not wind up being the pay-dirt some are envisioning, however, sponsors still say the funds would be well worth spending to keep people from having their lives ruined by arrest and incarceration for a minor crime.

What doesn’t work

“What we’re doing now doesn’t work,” Sen. Allan Kittleman, R-Carroll-Howard, said of existing laws. “It’s as simple as this. It doesn’t work, and we need to do something.”

Kittleman is co-sponsor of SB364 with Sen. Bobby Zirkin, D – Baltimore County, to make possessing marijuana a civil offense subject to a $100 fine like a speeding ticket. Similar legislation passed the Senate last year but did not get out of committee in the House.

Implementation of the measure would have a one-time cost of $112,600 and the state would lose some money from lowering fines for possession of less than 10 grams from $500 to $100.

Following these initial expenditures, the state would save money on enforcement going forward. Sixteen states so far have decriminalized marijuana, and 11 states that studied the effect saw savings in law enforcement and court costs, which were, in most cases, diverted to pursuing and prosecuting cases of more serious drug trade.

“If you’ve ever been in the district court before then you’ve seen rows of police officers sitting there,” Zirkin said. “They’re subpoenaed to court, they have to be there, everyone in the chain of custody will be there for what essentially will be a PBJ  [probation before judgement] or a stet [inactive docket] or a nolle-pros [dropping criminal charges]. And they sit there for hours upon hours, not out on the street, not dealing with crime.”

Legalization brings in dollars

The much broader measure legalizing pot, SB658, sponsored by 10 senators led by Sen. Jamie Raskin, D- Montgomery, would have considerably more far reaching consequences for the state’s finances. For starters, the net expenditure for implementing the bill comes in at $8 million, spread over five years.

As steep as the cost of the bill would be, however, the projected revenue from the legalization of marijuana could cover its total cost almost 10 times over within the first year.

Precise revenue estimates are difficult because marijuana is a controlled substance, but the fiscal note on the bill predicts revenue from taxes would be around $71 million in the first year. Further estimates call for revenues of up to $95 million in subsequent years.

Screen Shot 2014-03-03 at 11.11.29 AM“We will be able to make a lot of money in revenue,” Raskin said. “Someone said to me today, ‘Well look at Colorado, they’ve already sold tens of millions of dollars of marijuana.’ I said that’s right, that’s tens of millions of dollars that won’t go into the coffers of drug dealers and organized crime in that state. They will be able to tax it and that money will be put back into public health and public education.”

Colorado, Washington state will report revenues

Colorado, which began commercially selling marijuana in January, had its first tax day on Feb. 20.  In initial predictions Colorado had estimated its earning from taxes would be around $40 million. Now, the state is placing the figure at closer to $100 million.

Many skeptics, including a few economists, say these numbers are too optimistic, and don’t take into account increased costs of enforcement and regulation. Law enforcement officers say the move will lead to increased cases of driving accidents caused by marijuana use, but how much is in dispute.

When revenue numbers do come in for Colorado, and for Washington state, which begins selling commercial marijuana in June, that information will impact the debate in states like Maryland considering legalizing the drug.

Screen Shot 2014-03-03 at 11.11.43 AMFor many lawmakers, however, it will be human factors which lead them to decide whether or not to support the bills, not financial.

Del. Curt Anderson, D-Baltimore, is the lead sponsor of legalization in the House, HB880, along with 31 co-sponsors. The same bill which failed last year had only four co-sponsors.

“The reason I sponsored these bills is that there is an overwhelming number of African American males being arrested in the state of Maryland and being convicted and getting criminal records for simple possession of marijuana,” Anderson said. “You get a criminal record you can’t get a job, you can’t get into some schools, can’t get a loan, in some cases you can’t get into housing. That’s just unfair.”

March 02, 2014 at 6:44 pm

By Margaret Sessa-Hawkins

Margaret@MarylandReporter.com

Original Story>

Maryland’s Obamacare Fiasco Continues, By Barry Rascovar

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Screen Shot 2014-03-03 at 9.39.30 AMHow high will it go? How much more will it cost the O’Malley-Brown administration to fix or totally replace the dysfunctional online health insurance system that it bragged about until the software crashed on Day One?

It already is the most costly debacle in state history.

None of the state’s options are appetizing.  Meanwhile, problems keep mounting, the latest being $30 million in extra taxpayer expenses due to the Internet computer software’s inability to identify recipients no longer eligible for free Medicaid insurance.

Just fixing this deeply flawed software will cost untold tens of millions of dollars. Moving to a new, proven system used in another state could send new spending into the stratosphere. Converting to the federal system has heavy costs as well as severe limitations and the potential for more breakdowns.

Frantic scramble            

“It seems like we’re shooting in the dark,” said an exasperated Del. Addie Eckardt, an Eastern Shore Republican at a hearing last week. She’s right.

State officials have been frantically scrambling ever since the administration’s highly touted online system froze and refused to work as promised on Oct. 1.

Officials are still grasping for straws, hoping the new prime contractor can make lemonade out of this lemon of an IT jalopy.

As for the next step once insurance enrollment closes on March 31, it’s another shot in the dark. Whatever the choice, it will be very expensive.

But will it work? There’s no guarantee that it will.

What a mess.

Screen Shot 2014-03-03 at 9.40.01 AMLooming loss of federal funds

Complicating matters is the looming end of federal largesse. Come 2015, the state is supposed to foot the entire bill for its health insurance exchange.

Maryland has expended $182 million in federal funds with little to show for it.  How much the state will be on the hook after Jan. 1 is another unknown, but we do know it will no longer by Martin O’Malley’s problem.

What a distasteful present he’s leaving on his successor’s desk.

It’s baffling that no one running the administration is insisting on an immediate and thorough investigation of this historic screw-up. This won’t be viewed favorably by future historians.

Not only is accountability lacking but the O’Malley-Brown administration is running away from this question as fast as it can.

Where’s Anthony Brown?

Note that Lt. Gov. Anthony Brown, the widely promoted point man on healthcare reform, continues to be missing in action. Yet he owes the Maryland public a full and frank explanation of his central role in this debacle.

How this affects Brown’s candidacy for governor remains of pivotal importance.

Does his “deer caught in headlights” performance disqualify him from serious consideration?

Is this the type of evasiveness on vital issues we can expect from him if he’s elected governor?

Do we want a governor who takes cover when controversies rage and lets underlings take the heat for him?

As Desi Arnaz famously said to Lucy, Brown has got “some ‘splainin’ to do.”

More sinkholes ahead?

Meanwhile, legislative committees continue to treat this disgraceful public embarrassment with kid gloves. History will not look kindly on their performance, either.

Digging out of this enormous sinkhole hasn’t been easy. The road ahead looks susceptible to similar perils.

What’s lacking is responsible, accountable leadership. That could become a dominant bone of contention as the June 24 primary approaches.

Read other columns by Barry Rascovar at www.politicalmaryland.com

 

Treasurer, Comptroller Urge Senators to Restore $100M Cut in Pension Funding

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Md. Treasurer Nancy Kopp at her 2011 swearing in with Gov. Martin O'Malley.

Md. Treasurer Nancy Kopp at her 2011 swearing in with Gov. Martin O’Malley. (Photo by Jay Baker, Executive Office of the Governor)

In unusual joint testimony, Maryland State Treasurer Nancy Kopp and Comptroller Peter Franchot, chair and vice-chair of the state pension board, pleaded with Senate budgeters not to permanently cut $100 million in state payments to the retirement system.

They said the cut proposed by Gov. Martin O’Malley had high long-term repercussions and undermined the state’s credibility with bond rating agencies by reneging on promises made in 2011 pension reforms.

Leaders of the Senate Budget and Taxation Committee asked the state two top financial officials where they would make up the $100 million O’Malley has used to balance the budget as the senators search for other potential ways to trim the $39 billion spending plan.

“Help me out,” said committee vice chair Nathaniel McFadden, D-Baltimore City, and say where to cut the rest of the budget.

“We find ourselves a week away from having to make a final decision,” said budget chair Ed Kasemeyer.

Revenue write down expected

The committee members had already been told to expect an official write-down of revenue estimates next week of $100 million to $200 million. They were also seeking to boost what they saw as an inadequate surplus of only $30 million O’Malley had left as a cushion for unexpected expenses that often average more than $100 million each year.

Comptroller Peter Franchot

Comptroller Peter Franchot

Kopp and Franchot, former delegates who served as appropriations subcommittee chairs in the House, declined to propose any cuts in other areas of the budget while advocating for a higher pension contribution.

“We think this was a wrong choice,” said Kopp, repeating comments she had made to other lawmakers.

Promises made in 2011

In 2011, the legislature passed major reforms of the pension system that raised employee contributions from 5% to 7% of salaries and reduced future benefits — moves strongly opposed by state employees and teachers. In exchange, the legislature promised to use $300 million of the savings to bolster future liabilities.

“While in the short term, [the governor's cut] does save money from the general fund,” Kopp said, in the long term, over 20 years, “it costs $1.75 billion to the employer — the taxpayers,” because the lost funding must ultimately be made up along with all the expected investment returns on the missing money.

“We would urge you to recognize the reforms and stick to them,” Kopp said.

Franchot said, “Backing away from our commitments undermines our credibility … in the eyes of the financial community.”

Other committee members asked about making the $100 million cut in pension contribution, just for fiscal 2015, rather than over the next 20 years.

In reports released last week, two New York rating agencies that reaffirmed Maryland’s triple-A rating for its March 5 bond sale noted that the legislature had already cut $100 million in this year’s budget, setting aside the money in case of federal budget cuts.

This would be the second year in a row that the state has not lived up to the promise made in 2011 pension reform.

In general, legislators cannot add money to the governor’s budget. But in this case, the $300 million extra contribution is written into law and the legislature must approve a change in the law to reduce it to $200 million as part of the Budget Reconciliation and Financing Act (BRFA, or burfa in State House parlance.)

By Len Lazarick
Len@MarylandReporter.com

Original story>

Legislative Staff Recommends Cutting Raises, Benefits of State Employees Just Ratified in Contract

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State employees last Wednesday ratified a new one-year contract that provided 2% raises, regular step increases, health premium holidays and other financial benefits they had been denied in the lean years of the Great Recession.

Two days later, the legislature’s budget staff recommended rolling back about half the negotiated increases, moves that took the largest state union by surprise, calling them “alarming” and “disturbing.”

“We find this budget analysis almost shocking,” Sue Esty, legislative affairs director for Council 3 of the American Federation of State, County and Municipal Employees, told the House Appropriations Committee Friday.

O’Malley Budget Secretary Eloise Foster urged the committee to reject the recommendations and live up to the collective bargaining agreement the administration had negotiated.

Maryland’s legislature is only allowed to cut the governor’s budget, so it is routine for its staff to focus on spending cuts.

Revenue write down

But according to several senators on the Senate Budget and Taxation Committee, Warren Deschenaux, the legislature’s chief budget analyst, has warned them that the official revenue estimates due next week are likely to see a write down of $100 million to $200 million. In particular, the sales tax revenues from December shopping were lower than projected.

This means the state will have even less money to spend than planned in Gov. Martin O’Malley’s $39 billion budget. He had provided a minuscule surplus of only $30 million, along with the continuation of other money-shifting gimmicks that have helped balance the budget in past years.

As part of that search for $150 million to $200 million in budget cuts, the Department of Legislative Services analysis recommended cutting in a half the proposed 2% cost-of-living increase, but beginning it six months earlier. This would lower base salaries in the following budget year.

DLS also recommended delaying step increases by three months, and eliminating two of four “holidays” for health insurance premiums.

The premium holidays, which increase net pay, were based on reductions in health care costs that employees had gained by use of wellness programs, higher co-pays for services and reduced utilization of hospital emergency rooms.

Already fighting pension cut

AFSCME and the teachers union were already fighting Gov. O’Malley’s  proposed permanent $100 million cut in funding for their pension systems. In 2011, an additional $300 million contribution had been promised based on the savings produced by pension reform legislation that increased salary contributions from 5% to 7% of pay and reduced future benefits.

“State employees are driving the savings for health insurance and pensions,” Esty said. “But instead of being plowed back into” reducing the liabilities for retirements and other post-employment benefits, particularly health insurance, “they are being used to balance the budget.”

The surplus in the health insurance fund is the “money that was saved by employee behavior,” and should be used to reduce their premiums, not to balance the general fund, Esty said.

The proposed cuts in the ratified contract were “terrible for morale,” Esty said. This is especially true for recently hired employees who were expecting regular raises, merit increments and a match of deferred compensation, but instead got none of those things as well as temporary pay cuts through unpaid furloughs. The chart below shows the history of pay hikes, increments and other compensation over the past decade.

February 25, 2014 at 7:25 am

By Len Lazarick

Len@MarylandReporter.com

Original Story>