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July 25, 2025

Chestertown Spy

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Hogan Proposes More Than $1 Billion in Tax Cuts for Retirees

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Gov. Larry Hogan on Thursday proposed more than $1 billion in tax cuts for Maryland retirees.

“Today we’re taking a major step forward in those efforts by introducing the Retirement Tax Reduction Act of 2020, which will cut income taxes by more than $1 billion over the next five years,” he said at a news conference at the State House.

Hogan said that under the proposal, retirees who make $50,000 a year or less “will pay no state income tax whatsoever.” Retirees who make less than $100,000 a year “will see a tax reduction of no less than 50 percent — up to 100 percent,” he said.

The governor said the legislation would benefit more than 230,000 Marylanders. The proposal is “the largest tax reduction in Maryland in more than two decades,” he said.

Hogan said a major impetus for the proposal is having heard stories dating back to his first run for governor in 2014 from people who expressed affection for Maryland but said they could no longer afford to live in the state because of the tax burden.

“It will help keep tens of thousands of Maryland retirees from being forced to flee our state.”

Hogan was asked about the proposal’s chances of being passed by the General Assembly.

“If we’re having these discussions about how we have enough money to talk about fairly drastic increases in spending, I’d like at least part of the discussion to be about: ‘How do we let people keep some of their own money.’

“We actually have been successful on retirement taxes. We decided that we knew we couldn’t get the size of a bill that we’re announcing today through — but we did get targeted tax relief for retirees in several groups.”

Hogan pointed to the Hometown Heroes Act as an example. The 2017 legislation exempts law enforcement and first responders from paying state taxes on the first $15,000 of their retirement income. This year’s proposal would expand the law to eliminate state taxes on retirement income for law enforcement and first responders.

While Hogan is proposing tax relief, some Democrats have proposed modest tax increases on income that is not related to retirement or salary. On Wednesday a group of House Democrats unveiled 10 bills that would raise an estimated $2 billion for education improvements by 2030. The bills have not yet been filed.

Del. Julie Palakovich Carr, D-Montgomery, who sponsored one of the bills, spoke with MarylandReporter.com prior to Thursday’s news conference. She said her proposal would impose an additional 1 percent tax on capital gains and real estate properties. Carr said the proposal would not affect personal property taxes.

“If you look systematically at where our tax code is at a lot of Marylanders are actually paying more than their fair share at this point, for many working-class families and even upper-middle-class families. So we’re just making sure that our tax code is actually fair — that wealthy corporations and ultra-wealthy individuals are paying their fair share in terms their contributions to the state.”

MarylandReporter.com asked Hogan at the news conference how the proposal might affect the state’s economy.

“I haven’t seen the proposal and maybe I’ll let the budget secretary try to tackle that one. But I’m sure it would have some impact. But I haven’t seen any studies on that.”

Secretary of Budget and Management David Brinkley followed up on the question.

“It could be a hybridization of whatever they’ve done in the past. But we have to see how that affects corporate earnings and everything else here. We haven’t seen the details on that particular one so we can get back to you once we see all that. But it’s a repeat pattern of things that have come in the past and have been turned down by the legislature.”

By Bryan Renbaum

Don’t miss the latest! You can subscribe to The Talbot Spy‘s free Daily Intelligence Report here. 

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Medical Marijuana Brought More Than $10 Million in Tax Revenue to Md. in FY 2019

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Medical marijuana produced more than $10 million in tax revenue for Maryland in FY 2019 – exceeding the amount of money the industry brought to state coffers during the previous two fiscal years combined, according to data provided by the Maryland Medical Cannabis Commission.

The latest numbers cover the period that ended on June 30, 2019. The total estimated revenue for medical marijuana for that fiscal year is $10,371,437. State expenditures for the fiscal year were $5,608,806.

In FY 2018 medical cannabis brought $3,508,494 to Maryland in tax revenue. State expenditures were $4,389,767. In FY 2017, the industry brought $4,234,017 in revenue to the state, while expenditures were $2,540,331.

Cannabis companies in Maryland made an estimated $96 million in the 12-month period from Dec. 1, 2017 to Nov. 30, 2018, according to the commission.

During the same period Illinois cannabis companies made $36.3 million, Massachusetts cannabis companies made between $25-35 million and New York cannabis companies made between $5-15 million, according to data from those respective states.

Maryland has an estimated 87 licensed cannabis shops, according to a spreadsheet provided by the commission. The majority are located in major population centers such as Baltimore City, Baltimore County, Howard County and Montgomery County.

The majority of prescriptions were written for chronic pain, severe pain, PTSD, severe or persistent muscle spasms and severe nausea.

Mitch Trellis, managing partner of Remedy, a medical marijuana dispensary in Columbia, said the hurdles to opening a cannabis shop in Maryland “are many and numerous.”

Remedy, a medical marijuana dispensary, is located in a nondescript strip mall in Columbia. The shop opened in 2017. (MarylandReporter.com photo)

Trellis said he began a working group in April 2014 but was not able to open his shop until the end of 2017. He said the application process alone took about 18 months.

“It took us close to four years to basically get to open.”

But Trellis said the wait was worth it.

“We’re the Number 1 store in the state by both sales and by patients served.”

Trellis said he has 32 employees and serves more than 2,000 customers per week. However, he admits that the cannabis industry in Maryland is tough.

“It is the most competitive state in America. There are more stores per square mile than anywhere else in America.”

Banking is a major hurdle for cannabis shop owners. Marijuana is illegal under federal law and banks are national and sometimes even multi-national entities. Because of this, most banks are not willing to accept deposits from cannabis shops because the federal government could revoke their FDIC (Federal Deposit Insurance Corporation) charter. If a bank’s charter is revoked, its deposits would no longer be federally insured.

Severn Bank in Annapolis is one of the few banks in Maryland that accepts deposits from cannabis shops. Trellis said Remedy deposits its money there.

“They’ve been very forward and very innovative in their processes and in their programs, and they’ve done a great job,” he explained.

Kevin Shin, co-founder and CEO of Grove Group Management, a financial firm based in New York City that invests in cannabis, said Maryland’s medical marijuana industry is lucrative.

Shin said the number of medical marijuana users in the state increased 20% from 2018 to 2019. He explained what that means for the industry.

“National conglomerates are trying to consolidate licenses making larger brands, so smaller operators have to work smart since there are enough sales to survive in the growth market. Sustaining sales and growing the medical consumer base will be key for dispensaries. Sales and distribution for processors and growers.”

But like Trellis, Shin said the hurdles are many.

“The typical hurdles of high capital requirements and operating costs while managing sales and margins will always be constant. You need financial discipline, a strong management team, and foresight to keep contingency funds for regulation changes that are bound to come.”

Shin said lack of diversity among cannabis shop owners is a problem in Maryland.

“In the first round, only one license was awarded to an African American-owned group and the commission has gone through leadership changes. Minorities including women need better representation as the state program evolves which will evolve.”

Eleven states have legalized recreational marijuana use. They are Maine, Illinois, Colorado, California, Alaska, Vermont, Oregon, Nevada, Michigan, Massachusetts, and Washington.

Fifteen states have decriminalized marijuana use. In 2014, Maryland followed that path by passing a law that makes possession of 10 grams or less punishable by a fine and a mandatory drug education program.

Concrete action on legalization is not expected during this legislative session. However, two bills have been filed related to cannabis. The House bill would prohibit medical marijuana users from being denied the right to purchase, own, possess or carry a firearm. The Senate bill would allow an income tax subtraction modification for the expenses medical cannabis growers incur.

Last year the general assembly established a working group to study legalization for adult users.

Maryland’s medical marijuana program was established by the assembly in 2012. However, the program did not become operational until December 2017.

William Tilburg, executive director of the Maryland Medical Cannabis Commission, did not respond to a request by MarylandReporter.com for comment by the deadline for this story, nor did a spokesperson for Comptroller Peter Franchot.

Don’t miss the latest! You can subscribe to The Chestertown Spy‘s free Daily Intelligence Report here.

By Bryan Renbaum

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Hogan: Crime and Corruption are Top Priorities for New Session

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A day ahead of the start of Maryland’s 441st legislative session, Gov. Larry Hogan claimed overwhelming popular support throughout the state –  and Baltimore in particular – for a series of legislative proposals aimed at reducing violent crime.

“Our bills have the support of more than 90% of people in Maryland and even higher support in Baltimore City,” Hogan said at a news conference on Tuesday at the State House in Annapolis. Hogan did not cite or indicate where he got the 90% figure from.

“This absolutely must be job one for the legislature when they begin this session…Nothing is more important.”

MarylandReporter.com asked Hogan if he has spoken with Baltimore Mayor Bernard “Jack” Young about the proposals.

“We’ve talked to Jack Young about this extensively and obviously we’ve been working together on this crime problem for quite some time and we’re hoping to get the mayor’s support,” Hogan said.

Young has pushed for better education and jobs for the city to empower the residents as a means to take back the streets as opposed to more punishment and harsher sentencing.

“We have a number of crime bills that we’re proposing, including the judicial transparency bill and the witness intimidation bill, which, by the way, has 97-to-0 support in Baltimore City. So, we’re hoping we’ll get the mayor on board,” Hogan said

The governor went on to take a subtle jab at Young.

“I can’t imagine that anybody that’s a Baltimore City official, or [who is] running for office in Baltimore City, would want to take any position that 90 percent of the people are against.”

The former Baltimore City Council president became mayor last May after Catherine Pugh resigned under pressure and was indicted on federal charges of conspiracy and tax evasion. He is running in the city’s mayoral race.

Young’s office did not respond by deadline to a request from MarylandReporter.com for comment.

Hogan unveiled the proposals last month.

The Judicial Transparency Act would require the state to make public the sentencing records of judges who adjudicate cases involving violent crimes.

The Witness Intimidation Prevention Act would increase penalties for retaliation against those who cooperate with authorities. The legislation includes a provision under which restitution payments would be made to victims.

The Violent Firearm Offenders Act would drastically toughen penalties for those who commit gun violence. The legislation targets those who illegally possess guns, such as in cases of theft or ownership by felons.

Additional measures introduced by the administration would provide $21 million in additional funding for Baltimore city prosecutors as well as funds for the attorney general’s office to hire 25 new prosecutors and personnel to assist in the prosecution of violent offenses.

Hogan also unveiled ethics reform legislation on the heels of the recent convictions of Pugh and former delegate Tawanna Gaines, D-Prince George’s, as well as the indictment of former delegate Cheryl Glenn, D-Baltimore.

The Ethics and Accountability in Government Act would increase the fines placed on those who bribe public officials by 1000%. The legislation would force lawmakers convicted of taking bribes to forgo their taxpayer-funded pensions. It would empower the Ethics Commission to bypass the courts and directly assess penalties against public officials.

“It has become clear in recent months and recent weeks that a pervasive culture of corruption continues to exist, and that even tougher and more stringent laws are needed,” Hogan said. “The Ethics and Accountability in Government Act of 2020 will strengthen and toughen the state ethics laws in an effort to help restore the public’s trust and bring further transparency, accountability, and honesty to Annapolis.”

He responded to questions on his own personal wealth when asked if he would release his tax returns detailing his finances before he became governor.

“No one has ever been more transparent,” Hogan said. “No elected officials has ever disclosed more than I have.”

The 90-day legislative session convenes today at noon.

By Bryan Renbaum

 

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Maryland Charges Big Fines for Skipping Small Tolls

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As Maryland moves toward all-electronic toll billing and constituents complain about high fines that total thousands of dollars in some cases, two lawmakers are working to reduce the penalties for late video toll payments.

Drivers who go through toll facilities without paying – such as drivers on the all-electronic Intercounty Connector (ICC) who do not have EZ Pass transponders – are sent a video toll invoice. If the video toll is not paid within 30 days, the Maryland Transportation Authority (MDTA) issues a citation with a $50 civil penalty.

In the case of the ICC, commuters might get a notice with multiple trips included, so a single notice paid late can result in several $50 fines that add up quickly. (CORRECTION: ICC tolls are calculated at the entrance and exit to the toll road. ICC commuters who use the road frequently may get a notice with several missed toll trips, and each of those can result in a late penalty if not paid) Some drivers don’t realize they have a problem with an E-ZPass account or change addresses, only to later find out they owe hundreds or thousands in fines for small initial toll charges.

The Chesapeake Bay bridge has also gone to all cashless tolls on some days to ease traffic congestion.

The huge fines have put some on the path to “toll bankruptcy,” and broad enforcement powers enacted in 2013 to address toll violations have led to wage attachments, financial hardship and non-renewal of vehicle registrations at MVA, according to witnesses who testified against the fines in 2017.

In November 2018, the MDTA board voted to reduce that fine to $25 for the first five transactions but has delayed implementation until after the state transitions to contracts with new tolling vendors who will be using new 3G tolling technology.

Delegate calls it bad policy, harming Marylanders

“This is a really bad policy, it’s clogging our courts, it’s harming Marylanders,” said Del. Al Carr, D, whose Montgomery County district includes many ICC drivers. “It’s really unfortunate that they’re backing away from what they promised in terms of cutting (the fee). And even $25 is still too much, it’s a step in the right direction but it’s still too much.”

Carr and Sen. Kathy Klausmeier, a Baltimore County Democrat, say the state would be better served by setting a smaller late fine and collecting toll debt when drivers go to renew their vehicle registrations.

They are proposing legislation in the coming General Assembly session that sets the late fine at $5 and ends the state’s ability to suspend registrations, instead flagging registrations at the time of renewal. The legislation also asks the MDTA to establish reciprocal toll agreements with other states instead of pursuing a plan to hire a collection agency to go after out-of-state drivers. See our sidebar on the more than $100 million that the state hopes to collect from out-of-state drivers.

$100 million in late fees

The late fines have a wide-ranging impact, with more than 2 million civil penalties issued in fiscal 2018 and $100,896,000 in late fees issued statewide.

“I’ve heard from multiple constituents who have had complaints about cashless video tolls and the collection process in Maryland,” Klausmeier said in a press release. “Working with the MDTA, I hope that this legislation will be extremely beneficial to people who use Maryland’s toll roads.”

These changes were modeled after Massachusetts, which moved to all-electronic tolling in 2016 and issues more modest late fees for drivers paying by plate. See the sidebar for more information on the Massachusetts model, which also has a $500 cap on penalties.

A spokesman for MDTA declined to comment on the proposal, saying the agency hasn’t seen the final version of the bill.

Video toll lost in move results in $1,200 bill

Gaithersburg resident Miguel Henriquez moved to a new apartment in March, and was shocked to receive two final bills months later stating he owed $1,221 in tolls and civil penalties.

Although he says he informed the U.S. Postal Service to forward his mail to the new address, he didn’t get the initial toll notice for a series of 16 video tolls on one notice and another notice for five video tolls.

As a driver for Lyft, he used his E-ZPass to drive people on the ICC to the BWI airport and thought he had paid the tolls, but said he doesn’t think he got a low balance notification and did not realize his account needed to be replenished. By the time he received the unexpected toll bill, he was considered late and each small toll, many of which were about $2, had a $50 fine attached.

Henriquez was unable to renew his vehicle registration because he couldn’t pay the fine. The notice, dated Nov. 16, said the total amount was due Dec. 2 or it would be sent to the Central Collections Unit.

In fiscal 2018, the MDTA referred 205,532 violations from the ICC to collections, in order to collect $9,947,144 in civil penalties and video tolls. Statewide, there were more than $27 million of late fees and tolls at CCU as of October 2018.

Henriquez contacted Carr’s office, connected him to MDTA. It settled down the fine from the initial $1,200 fine to $147 and updated his address on the account.

The ordeal has caused Henriquez to lobby for a fine reduction for all customers.

“The $5 fine is more than fair,” Henriquez said. “I truly believe you should be charged a fine if you choose not to pay a toll. Just like any bill in life, you’re responsible for it, but $50 for a 90 cent toll, I really truly feel is unfair.”

Turning to the courts

Carr has been able to help many constituents, but still wants the system changed.

“The message is that those with toll debt who are able to take time off from work and go to court (or know to contact their elected officials and/or the press) will get their late fees greatly reduced,” Carr said. “Others will have their registrations suspended or flagged, be sent to collections or have their income tax refunds garnished.”

After they see the $50 fine, many Maryland drivers opt to challenge the citation in court.

In fiscal 2018, the MDTA reported 44,433 civil penalties were contested in court. Of those, 27,199 came from the ICC.

For the same year, the Maryland Judiciary reported it heard 31,790 requests for toll violations based on a manual tabulation.

The volume is so great that cases in Montgomery County being heard last month date from 2016, and many also must be heard in Prince George’s County because the ICC spans the two. Carr said that the Prince George’s County District Court docket is less crowded, so some people receive a violation one year, have it heard in Prince George’s County in another and a third year are scheduled for Montgomery County.

“What happens when you set the fee to $50 is a lot of people contest the fee to court,” Carr said. “We have this enormous backlog of tens of thousands of people who were so angry and felt these fees were so unfair they checked the box to say I want my day in court.”

What happens in court

A review of a recent toll docket shows many people fail to appear in court on their scheduled date. Of the cases where people do appear, some are dismissed, others must pay toll violations, civil penalties, and court costs. Others get reduced civil violations.

Outside of the courtroom, some drivers have been able to get administrative relief from MDTA.

Kensington resident Alice Kessler was driving on the ICC when she drove through with her E-Z Pass transponder and paid the bill automatically with EZ Pass. Then, she got a separate video toll bill for the same transaction on Sept. 11, 2018 at 5:15:16 p.m.

The bill had boxes to check to challenge the toll administratively, such as a stolen vehicle, but none of them applied to her situation where she had actually already paid the toll. She wrote a note on the form and mailed it back, but in 30 days got a citation with the $50 fee for a toll that had only cost her $1.24 through E-ZPass.

After she posted on Facebook, Kessler said both Del. Carr, and MDTA’s then-executive director Kevin Reigrut reached out to her and Reigrut was able to get the fee lifted in 2019.

“It’s ridiculous to me that the fee is not in line with the amount of the offense, and it’s also ridiculous that you can’t dispute anything with the tolls without going through your delegate,” Kessler said.

The future of tolling

Maryland recently began cashless tolling at the Hatem Bridge over the Susquehanna River between Havre de Grace and Perryville. In October, the Francis Scott Key Bridge (I-695) in Baltimore went cashless. It’s also being implemented during construction on some days for the Chesapeake Bay Bridge.

As these sites become busier, lawmakers expect more people to become concerned about the late fees and urge action from the General Assembly, Carr said.

“There are just a lot of ways for this system to fail and it’s not very forgiving,” Carr said. “These penalties are high, they’re predatory, they’re harmful. They’re not really serving the purpose of collecting tolls. They are just a moneymaker for MDTA.”

Transition

The MDTA is also making a big transition between vendors for the toll system, taking steps to modernize the system, including implementing two contracts approved by the Board of Public Works for a next-generation tolling system (3G) next year.

The vendor operating the tolls will switch from Conduent to Transcore for toll account management and customer service operations and Kapsch TrafficCom to replace and maintain all roadside tolling equipment.

As that system is put into place, some changes to the current billing system could make video tolls less prevalent.

On Nov. 21, the MDTA Board approved a toll modernization package that will allow for a new pay-by-plate option by June 2020. Under that method, tolls will be automatically billed to credit cards at the same rate that cash customers pay today for all facilities except the ICC and I-95 express lanes. On those roads, the customers will pay less than the video toll rate but 25% more than the E-ZPass rate.

As that phases in, many drivers may choose to use Pay by Plate instead of video tolls.

167 million toll transactions

During fiscal year 2018, MDTA processed 167 million toll transactions, 96% of which were paid through E-ZPass or cash at the time of travel. The remaining 7.1 million were processed as video toll transactions, and it’s possible those numbers will change as pay-by-plate becomes available.

Reductions through the modernization plan are expected to provide customers savings of about $28 million over five years, according to a press release.

That is the latest round of toll relief under the administration of Gov. Larry Hogan, resulting in up to $344 million in combined savings since 2014, the release states.

As for the fine reduction to $25 for the first five offenses, when the MDTA board voted to allow that in 2018, their meeting minutes said it could not be implemented at that time “due to risk and stability concerns with the current system.”

Waiting until 3G goes into place will mean the system will have been upgraded and will be operated by a different company.

By Meg Tully

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Maryland Roads Ranked 13th in Spending and Quality

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Maryland nearly made the Top 10 of Best Roads in the country in rankings for a consumer website.

Maryland came in at 38, in reverse scoring chart where number 1 was worst and number 50 was best. Maryland scored better than any of its neighbors, while also outspending them per mile of road, according to ConsumerAffairs.com, a web-based consumer news and resource center.

Neighboring Virginia was ranked 37th, just behind Maryland, but only spent $62 per mile compared to $106 per mile in Maryland.

The consumer affairs website ranked the Northwest and Upper Great Plains states as best, with sparsely populated Wyoming and Kansas leading the way. South Carolina and Louisiana ranked worst with bumpiest rides, regular heavy congestion and hazardous road conditions like potholes and illegible street signs.

The website calculated the dollar amount each state spends per mile of road using data from the U.S. Department of Transportation, and also looked at motor crash fatalities on roads per mile, percentage of roads in poor, fair and good condition from the Federal Highway Administration, and the results of an email survey of 1,418 U.S. residents.

The organization normalized, rescaled and weighted each factor and gave more weight to public opinion than spending, hoping to give some weight to how that money was spent.

“Survey data is always biased, but politically distributed highway budgets are doubly so,” said ConsumerAffairs Vice President of Data and Analytics George Earl.

The survey shows Maryland outspent all its neighbors in road spending, with West Virginia (ranked 7th worst) coming in at only $32 per road mile. Delaware came in at fifth worst and spent $55 per mile.

Maryland was listed with only 11% poor roads, and 66% good roads. Neighbor Pennsylvania had 30% poor roads and 30% good roads, while Delaware and West Virginia had more poor roads than good with 19% poor vs 44% good and 31% poor vs 25%, respectively.
“Dodging potholes and poor patches wears me out,” said one Charleston resident when asked why they rated West Virginia roads as being bad.

One Georgetown, Del. resident said the state spends too much money on upgrades for “intersections with low traffic,” while “upgrades to intersections with existing high traffic are often inefficient and unsafe. They are outdated before they are even finished.”

In Delaware, the consumer website also mentioned climate change and rising sea levels as a challenge for state government. The Delaware Department of Transportation estimates it will cost $1.45 billion to keep the lowest-lying roads in Delaware drivable.

Residents from the best ranked states remarked on the roads’ smooth pavement, recent repairs and lack of debris. Many people commented on their governments’ quick seasonal weather cleanup, the website said.

–Meg Tully

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Op-Ed: Kirwan Plan is a Union Cash Grab; Taxpayers Get the Tab

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The Kirwan Commission’s real aim is hiking teacher pay by $3 billion a year, and it is why the state teachers’ unions are so strongly backing it – more teacher pay. Kirwan aims at “making teacher salaries more competitive with other professions.”

The teachers’ unions, whose membership and coffers would boom, have even launched an expensive lobbying campaign to pressure political leaders to enact Kirwan’s pay hikes.

But Maryland’s teachers are not underpaid. Yes, some teachers, who are paid on a seniority rather than a performance basis, earn somewhat less than professionals with similar education and experience qualifications.

But most are highly overpaid. In aggregate, when all compensation (benefits, leave and job security) is accounted for, the average teacher earns as much as 40% more than those in comparable private sector professions.

No teacher shortage

Another false “crisis” that Kirwan’s massive pay hikes seek to remedy is the “teacher shortage,” with many teachers allegedly fleeing the profession. This is belied by the facts. Under 10% of Maryland’s teachers retired, quit, or were fired last year – less than half the leave rates for similar professional jobs. And they left the profession at a much lower rate than teachers across the country.

Maryland already spends a whopping 93 cents of every public K-12 education dollar on personnel (i.e., teachers and administrators) – not on instructional materials, facilities, or technology. That is the highest share by far in the country and 11% higher than the U.S. average (82%).

Statewide, Maryland’s per pupil spending averages about $16,000 per student, but the state’s economic and geographic diversity means district-level figures vary widely. Rural Talbot County spends very little compared to even the stingiest of states while Baltimore City spends the third most ($17,500) of the largest 100 districts nationwide, while ranking as the third worst in outcomes for all districts. Three other counties – Montgomery, Prince George’s and Howard – also rank in the top ten for per pupil spending nationally.

If one adds in the $5.3 billion in unfunded teacher retirement benefits (for generous pensions and healthcare) that Maryland school districts and state legislature fail to fund, the current real cost of a public school student’s instruction increases dramatically.

No meaningful reforms

Those figures are no matter to the teachers’ unions and the education bureaucracy who want $4 billion dollars a year more by 2030 – without meaningful governance or instructional reforms.

To fund the new expenditures, Baltimore City would be required to double its district’s spending share. That would require hiking Baltimore’s already burdensome property taxes on homeowners and businesses, driving them out of the city and further shrinking the tax base.

Meanwhile, two recent polls by University of Maryland-Washington Post and Goucher College suggest – erroneously – that Kirwan is a hit with the public. They claim to find that taxpayers are willing to pay higher taxes to improve public education – as if educational excellence can only be achieved through more spending.

But both polls find that over three-quarters of state residents know “nothing” about Kirwan. Seventy-four percent of Goucher’s respondents say they support “personally paying more in state taxes to improve [public education].” But Goucher never asks how much.

The Post poll introduces Kirwan’s recommendations as “major new programs aimed at improving Maryland’s public school system.” Even after such a leading prompt, only a small majority of Marylanders favor raising income taxes by even a quarter percent – which would fund only a tiny fraction of Kirwan’s cost – while a majority opposes a half-percent hike. By 2030, income taxes would have to rise by 40% — four times the half-percent increase offered in the Post poll.

A 2018 poll conducted by the Maryland Public Policy Institute found that, when given a choice, voters overwhelmingly oppose more spending as the primary means of improving education: 72% agreed that “to improve learning opportunities in public schools, policymakers should refocus on reallocating resources more efficiently and effectively, instead of continuously increasing the education budget.”

Tough choices avoided

Marylanders – unsurprisingly – want better, high-quality schools on the cheap. The tough choices are simply being avoided by Kirwan’s backers; the result would be cuts in other discretionary state and local spending or dramatic increases in income, property, and sales taxes.

Since Kirwan’s training, certification, and professional development programming have no consequences for poor-performing teachers or those who fail to improve, nothing will change in schools.

With union protections and a seniority-based pay scale, the rotten apples get the pay bump just the same and the beleaguered students can expect no real benefit.

But the teachers’ windfall – higher salaries and plumped up pensions – will carry a dramatic cost.

The Kirwan proposals will put the Old Line State into the red to the tune of $19 billion and increase the unfunded pension and healthcare liabilities owed by the state by billions more.

Maryland taxpayers will continue to feel the burn for decades to come as these new pay and pension entitlements cannot be easily clawed back unlike the necessary instructional or governance reforms – if those are ever enacted.

Sean Kennedy is a visiting fellow at the Maryland Public Policy Institute, a non-partisan public policy organization based in Rockville, Md.

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Kirwan Commission to Recommend Billions More to Raise Teacher Pay

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The Kirwan Commission on Innovation and Excellence in Education has begun hanging price tags on its recommendations for major education reform.

Dr. William English Kirwan

The commission chair, former University System Chancellor Brit Kirwan, has emphasized that the state would not just funnel more money into the status quo of Maryland public schools, but would require major changes in how education is delivered and teachers work to justify new spending phased in over 10 years.

Mandated school funding is already the second largest outlay in the state budget.

One of the commission’s major findings is that teachers are paid 25% less than comparable professionals with comparable education and responsibilities, one of the causes for a shortage of qualified teachers and students training to be teachers.

10% pay hike

The commission will be proposing a major bump in teach pay, raising pay for all Maryland public school teachers by 10% between 2020 and 2022, with a minimum teacher salary of $60,000 phased-in by 2024.

The commission is also proposing a new career ladder for teachers and additional certifications for teachers under the National Board for Professional Teaching Standards. This will raise average teacher pay in Maryland from the current $69,557 to $93,137 by 2029. In the final year of phase-in, the additional state spending is $1.3 billion, according to preliminary costs estimates by the Department of Legislative Services.

Accompanying these pay raises, the commission is also recommending a reduction in actual classroom teaching time from 80% of the current school day to 60%. This will give teachers more time “to tutor students who need intensive help and work together in teams to use data and observation to identify students who are falling behind and collaborate on getting them back on track, develop highly engaging and effective lesson plans, mentor new and struggling teachers and systematically improve the school’s instructional program using applied research.”

Based on the experience of high-performing schools around the world, the reduction of teaching time will be accompanied by an increase in class sizes justified by more effective curriculum.

“These reductions in instructional time will require an additional 14,685 teachers by 2029 to continue providing the same number of classes,” says the report. Price tag in final year 2029 is another $1.3 billion.

Staggering figures

Conscious that the numbers are staggering, at its Nov. 14 hearing Kirwan emphasized that these are only preliminary numbers.

“These numbers will not reflect any savings that will be made based on the savings of other work groups,” Kirwan said. “No one should leave this room writing or reporting these figures as being the number for any work group. It is a gross number. It has not been netted out.”

“It would be inaccurate to simply add together each element and characterize this as a total cost,” Kirwan went on. “Cost overlaps have not been fully adjusted. Cost savings have not been incorporated.

The commission has not yet tried to work out formulas for how the state and local governments will share in the new costs.

As the costs estimates are rolled out, commission members also noted that there may be additional costs for new buildings associated with increasing the number of teachers or class sizes.

Commission member Crag Rice, a member of the Montgomery County Council, also noted that if you raise the salaries for some, other employees of county government will want similar raises.

By Len Lazarick

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Op-Ed: Hogan’s worst nightmare is Trumpcare by Barry Rascovar

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Maryland Gov. Larry Hogan’s worst nightmare is starting to come true. Trumpcare has passed the U.S. House of Representatives. If the Senate finds a way to give President Trump what he wants, it could spell a heap of trouble for Hogan in 2018’s general election.

The Republican Party’s mania with obliterating Barack Obama’s massive health insurance law has led the majority party in Washington to ignore common sense.

“Repeal and replace” is a GOP obsession – though an estimated 24 million people could lose their insurance, tens of millions more could be out of luck due to pre-existing conditions and medical programs for the poor could be cut 25%.

It also would damage the nation’s economy. That’s especially true in Maryland, where healthcare is one of the state’s biggest employers.

It is almost certain to be the No. 1 issue in the 2018 mid-term elections, even if the Senate approves a diluted Trumpcare bill.

What a devastating state of affairs for Republican Hogan. Until the House vote last week, he appeared in excellent shape to win a second term.

Now he has to figure out how to tiptoe around this explosive issue that already is proving highly unpopular.

Unfavorable poll numbers

A Washington Post-ABC poll last month found 61% of Americans opposed Trumpcare. A Quinnipiac poll the month before found Trumpcare support stood at just 17%.

Most Americans, it appears, would rather stick with the existing – though seriously flawed – Obamacare medical insurance program and fix parts that aren’t working well (“keep and improve” as opposed to the GOP’s “repeal and replace”).

Wait until the Congressional Budget Office issues its cost and impact analysis of the House-passed version of Trumpcare. It could expose the bill’s soft underbelly. Public resistance could grow louder.

For Hogan, House passage of Trumpcare might be the beginning of bad news.

He could be trapped in a nearly untenable position: A Republican who might have to disavow his own party leaders in Washington to survive.

Hogan won election in 2014 by promising “no new taxes.” Does that mean he will let Trumpcare’s 25% cut in federal Medicaid funds lay waste to Maryland’s health programs for the poor and near-poor? Where would he find hundreds of millions in state dollars to cover those unfunded programs?

How does he run for reelection with Trumpcare hanging over his head?

Justifying the Republican plan

How does Hogan justify to voters his party’s plan to let insurance companies charge outrageously high premiums – or deny coverage entirely – for people with “pre-existing conditions”? This could be anyone with acne, anxiety, depression, diabetes, obesity, cancer, pulmonary problems, asthma or even allergies.

How does he tell older working Marylanders that under his party’s plan their insurance premiums could jump an unaffordable 500%?

How does he explain a cut of $600 billion in taxes that supported Obamacare – a massive windfall for wealthy Americans, insurance companies and medical device companies?

How does he justify $880 billion in healthcare cuts to Medical Assistance for the poor?

Hogan & Company should be praying that the Senate junks the House bill and takes a few years to figure out what to do next.

Otherwise, the GOP across the country – including here in Maryland – could take a shellacking for its all-out effort to appease its conservative base.

Gift to Democrats

There’s no doubt Democratic candidates for Maryland governor will tie Hogan to Trumpcare.

Every candidate will be running ads with tales of how middle-class and working-class Marylanders would be hurt, how lives hang in the balance.

It is a gift from heaven for Democrats.

One Republican pollster called the GOP’s insistent quest to wipe out Obamacare “political malpractice.”

Until recently the notion of Democrats regaining control of the House by picking up 24-plus seats next year appeared wishful thinking. Thanks to House Speaker Paul Ryan’s determination to pass a draconian Trumpcare bill, that’s no longer the case.

Little wonder Democratic House leader Nancy Pelosi – the former Nancy D’Alesandro from Baltimore’s Little Italy – was practically giddy.

Every Republican will be vulnerable, unless he or she disowns the GOP’s No. 1 issue and risks losing support from Trump’s supporters. “This vote will be tattooed to them,” Pelosi vowed.

That includes Republican Hogan, who has made an extensive effort to distance himself from Donald Trump and his controversial comments and proposals.

That may not be enough to give him immunity from this highly contagious political disease.

When virtually every healthcare group – from the American Medical Association to the American Hospital Association to AARP – as well as virtually every insurance group vehemently opposes the Republicans’ “repeal and replace” crusade, smart politicians should pay attention.

Failure by the GOP to “listen and learn” could prove fatal come November 2018 – both in Maryland and nationwide.

Barry Rascovar’s blog is www.politicalmaryland.com. He can be contacted at [email protected].

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It’s a Wrap: Hogan, Busch, Miller “Proud” of Annapolis Legislative Session

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“It was a great session,” Gov. Larry Hogan said about the just closed 90-day meeting of the Maryland General Assembly. “This is the way government is supposed to work…. This was all about compromise.”

“It was a session we can all be proud of,” House Speaker Michael Busch, sitting next to Hogan at a bill signing ceremony Tuesday morning. “This year your staff did a great job.”

House Minority Leader Nicholaus Kipke, R-Anne Arundel, told Capital News service that “despite the partisan efforts to kind of drag us into the D.C. post-election theater, we were able to pass some meaningful bills.”

Despite its many battles, Kipke said the 2017 session was the “most bipartisan” he has seen since he took office. Hogan concurred, telling reporters that 2017 was an “incredible, bipartisan session.”

It was so bipartisan that as Republican delegates talked the clock out on a bill expanding medical marijuana licenses, it was Kipke who made the motion to “adjourn sine die” at midnight, a role typically reserved for the House Democratic majority leader. This partially reflected bipartisan distaste for how the bill was written and forced on them by the Senate.

“We got everything done that needed to get done in terms of the legislation,” said Senate President Mike Miller. “We dealt with health care, we dealt with education, we dealt with environment and we dealt with public safety. So I think it was a very good year quite frankly.”

The two parties came together on several significant issues, most notably job creation, opioid abuse, anti-fraud measures, education, and environmental issues.

And in very Democratic Maryland, Republican Hogan continues to be the second most popular governor in Maryland, according to a Morning Consult poll released Tuesday based on an online survey over the last three months.

MANUFACTURING JOBS: The More Jobs for Marylanders Act (SB317) passed with strong bipartisan support. The law is designed to bolster manufacturing jobs in Maryland by offering tax incentives to companies that create jobs in high-unemployment areas and job training programs. Hogan considered the law a core piece of his 2017 agenda and signed it into law Tuesday.

Sen. Rich Madaleno, D-Montgomery County, often critical of Hogan, described a bipartisan process of senators who worked on the bill with administration representatives.

Mike Galiazzo, president of the Regional Manufacturing Institute, said the bill represented a good signal to manufacturers that Maryland was interested in promoting their businesses, which hadn’t gotten any tax breaks in 15 years.

The lone senator to vote against the bill, Sen. Roger Manno, D-Montgomery, had worked on his own version of tax incentives for manufacturers for three years.

Manno called the bill that was signed “a steak dinner for big business and a chicken box for the workers.”

OPIOID ABUSE: Maryland passed restrictions on the quantity of opioid painkillers that can be doled out by doctors in a single visit (HB1432); measures to increase the availability of naloxone — a drug that can counteract the effects of overdose (part of the HOPE act); and introduced steep penalties for people who distribute opioids that later cause the death of another person. The legislature passed a Hogan administration bill setting new penalties for distributing Fentanyl — an extremely potent synthetic opioid that has a high rate of lethal overdoses (SB539).

CRISIS TREATMENT: (UPDATED) The Heroin and Opioid Prevention Effort and Treatment Act of 2017 (or HOPE Act, HB1329), which passed late Monday with only one dissenting vote, is a broad response to the state’s opioid crisis. A key provision will increase reimbursement rates for community-based behavioral health providers over the next three years. Community behavioral health providers will receive reimbursement rate increases of 3.5% annually in the next two years and a 3% increase in the third year. This reimbursement increase was the key goal of the Keep the Door Open campaign.

PROTECTING TAXPAYERS: The Taxpayer Protection Act (SB304), a Hogan priority, makes it easier for the state to prosecute fraudulent filers for tax refunds and gives the comptroller’s office greater latitude to investigate tax fraud and identity theft. Comptroller Peter Franchot pushed hard for the legislation, holding conferences and events around the state to drum up support for the bill. It passed this year with unanimous support in the Senate and in the House of Delegates.

CLEAN CARS, WATER: Hogan administration environmental legislation included the Clean Cars Act (HB406), which increases the state’s budget for tax credits for electric vehicles, and the Clean Water Commerce Act, which expands the scope of the Chesapeake Bay Restoration fund to include sediment reduction, but does not include any new funding (SB314). Both had strong support from both Democrats and Republicans.

As always, a majority of proposed bills died, including some with significant support.

MEDICAL MARIJUANA: Tops among the failed bills was legislation that would expand the number of growing licenses for the state’s medical marijuana industry (HB1443) in an effort to increase diversity in business ownership. Sen. Joan Carter Conway, D-Baltimore, said she was “devastated” the House didn’t pass the bill before the midnight deadline. “We have a multi-billion industry with no minorities participating,” Conway said. “…I’m almost speechless.”

SANCTUARY STATUS: Latino delegates were outraged after the Maryland Law Enforcement and Governmental Trust Act (SB835) died in the Senate. The bill would have essentially made Maryland a sanctuary state by restricting the involvement of law enforcement agencies in Maryland with federal immigration efforts, banning state government agents from asking crime victims or suspects about their immigration or citizenship status.

Members of the Latino caucus walked off the floor at 4 p.m. Monday to demonstrate their displeasure that the Senate Judicial Proceedings Committee and Miller were blocking the bill.

Del. Jocelyn Peña-Melnyk, D-Prince George’s, shouted that Miller and committee chair Bobby Zirkin, D-Baltimore County, were “Democrats in name only” (DINOs). “Shame on you” she said of Zirkin. “I hope your district takes you out.”

Hogan was opposed to the bill as well.

The Capital News Service contributed to this article.

 

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Annapolis: Generic Drug Price Gouging could be Penalized In Bill Sent to Hogan

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A prohibition on generic drug price gouging now heads to Gov. Larry Hogan’s desk for signature after the House concurred in Senate amendments Monday morning.

The House voted 137-2 for the bill, HB631, and the Senate approved it on Friday 38-7 with a handful of Republicans joining the Democratic majority. All but a few GOP delegates supported the measure.

The legislation would be the first of its kind in the country to hold drug makers accountable for drastic spikes in prices that can’t be justified. Under the new law, the state Medicaid program will notify the attorney general of a spike in drug prices, who can seek civil penalties of up to $10,000 per violation.

“Generic prescription drugs prices have been like the ‘wild’ west for many Americans” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative, moments before Friday’s vote. “There’s a new sheriff in town and his name is Attorney General Brian Frosh, who will protect Marylanders from price gouging, and this will also allow future AG’s to protect Marylanders.”

“Frosh will be able to take legal action to stop unconscionable price increases that hurt people without justification when there’s no competition in the market,” DeMarco said.

Subjective judgment

In floor debate Friday, Sen. Robert Cassilly, R-Harford, said the proper way to deal with price controls would be to set up a commission rather than allow the attorney general to make a “subjective” determination on what constitutes price gouging.

“If the state of Maryland wants to establish their own version of the FDA and engage in price controls we ought to do in the proper manner,” Cassilly said. “The proper manner would be set up some proper board or commission…or have it come under some aspect of our state bureaucracy.”

Senate Republican Whip Sen. Stephen Hershey. R-Queen Anne’s, said the law could actually harm competition.

“Generic drugs are one of the only indicators in the delivery of health care where prices are actually going down,” Hershey said prior to passage of the bill. “This bill is going to have a negative effect that could potentially eliminate some of the competition that is in Maryland and that is driving these costs down.”

The legislation was rolled out at a Jan. 10 rally in Annapolis three weeks after Maryland joined 19 other states in a lawsuit against six generic drug makers for market manipulation and anti-competitive behavior.

Frosh said a 2014 survey of pharmacists revealed that 25 “off patent” generic drugs saw price increases of 600% to 2000%.

He said normally prices “plummet” when patents expire and competition becomes “robust.” He said generic drugs have consistently run about 20% of the original patented price.

“What we allege is these companies conspired to fix prices.” Frosh said at the rally.

by Dan Menefee

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