February 16th, 2015
Greetings from Annapolis! It’s the 34th day of the 90-day Legislative Session and the hallways are buzzing in the House of Delegates. In this week’s newsletter, I will discuss the State of the Judiciary Address, examine how revenue is projected and generated in Maryland, describe five additional bills I filed for the 2015 session and provide community resources for the current tax season.
State of the Judiciary Address
In Maryland, the highest court in the state is the Court of Appeals of Maryland. Referenced quite often as the state Supreme Court in states such as Virginia and Pennsylvania, the Court of Appeals of Maryland hears cases concerning the death penalty, legislative redistricting, removal of certain officers, and certifications of questions of law.
On February 11th, the Chief Judge of the Court of Appeals, Mary Ellen Barbera, gave the first State of the Judiciary Address since 2005 to a joint session of the Maryland General Assembly in the House of Delegates Chamber at the Maryland State House.
A Baltimore native, Chief Judge Barbera (the first female chief judge in Maryland) gave an outline of the initiatives she intends to address:
- access to justice and self help centers
- improving justice for our most vulnerable populations
- assisting our aging Marylanders.
If you would like to read the State of the Judiciary Address transcript, please visit:
Budget Spotlight: Revenue
As part of our ongoing conversation about Governor Hogan’s budget proposals for FY2016, and in general, the process of creating a balanced budget for Maryland (as the Maryland Constitution requires us to do), this week I would like to discuss the revenue side. The state budget is based on what is called projected revenue in Maryland, and so this week, I would like to discuss how revenue is projected in Maryland and how revenue is used in developing the budget.
First, what is revenue?
Revenue is the main income for the state, used to fund public expenditures and other items (essential services and programs) that we deem essential for Maryland. Essential services are K-12 public schools for children, higher education for young adults, healthcare funding for the elderly and developmentally disabled, construction and upkeep for roads and bridges, and public transit like the MARC or light rail.
How is revenue generated in Maryland?
Maryland brings in approximately $39 billion in revenue from major taxes, licenses and fees (including income taxes, sales taxes, special funds like Transportation, State lottery, and other sources). Almost 46% of the revenues come from state tax revenues (like the ones listed above), with the remaining revenues deriving from nontax sources, like fees, licenses and federal grants.
Let’s take a look at the major revenue sources in the state:
Individual and Corporate Income Taxes
Individual and corporate income taxes are the single largest source of revenue in Maryland and represents 24.3% of our revenue (only 2.6% of this total is from corporate income taxes). FY 2015 estimates indicate that Maryland will receive $9.4 billion in individual and corporate income tax revenue.
Sales and Use Taxes
Sales and Use Taxes are the second largest source of income in the state at 11.3% of our revenue. It is estimated Maryland will receive $4.4 billion in sales tax revenues in FY 2015.
Maryland ranks lower than other states in its revenue from sales taxes. What that means is that the 6% tax rate is excluded from services (for example, grocery food, residential utilities and medicine) that other states tax, and we don’t impose local sales taxes.
Transportation taxes are the third largest source of tax revenue for the state, at 9.1% of our state revenue. This revenue is derived mostly from special funds like the Transportation Trust Fund, a portion of which is shared with local governments for road repairs and safety projects. Maryland estimates to receive $3.6 billion in transportation tax revenues.
Lottery and casino gaming is the fourth largest source of revenue for Maryland at 1.6%. Maryland estimates it will receive $500 million in revenue from the State lottery and gaming in 2015.
Other tax revenues are obtained from tobacco and alcoholic beverage taxes, estate and inheritance taxes and other miscellaneous taxes, licenses and fees. Altogether, these revenue sources represent 8.8% of the revenue in the state.
Projected Revenue refers to the estimated funds Maryland expects to generate during a specific period. The projections are based on accounting periods in September, December and March of each fiscal year. Maryland’s fiscal year runs from July 1-June 30, so FY 16 refers to July 1, 2015 through June 30, 2016. The Governor bases his budget proposal for the next fiscal year from preliminary estimates created in September of the preceding fiscal year.
Does projected revenue impact the budget?
Yes. In December, if revenues are exceedingly less than they are projected to be in September, the Governor will write down expenses to meet budget revenues.
What are write downs?
Write down describes reducing expenses and making adjustments to close any budget shortfall either in the current or next fiscal year. Amendments are made through the supplemental budget in December.
How does Maryland fare?
Revenues are down in Maryland and we are still recovering from the recession. In comparison to other states, Maryland has been successful in withstanding the slumping economy and has shown slight growth; however, it has not been enough to meet the state’s economic needs. The slow job market and the rise of low wage, temporary contract work has negatively impacted the state’s revenues. Next week’s Washington Report will go into more detail on the relationship between estimated revenues and our current budget outlook.
Baltimore Regional Revitalization Work Group
I was re-appointed by House Speaker Michael Busch to serve on the Baltimore Regional Revitalization Work Group and this year’s first meeting was held on February 9th. This special workgroup was created by Speaker Busch in 2013 to study the regional strengths and opportunities in the Baltimore region and make recommendations to revitalize the Greater Baltimore metropolitan area.
The Regional Revitalization Work Group is comprised of delegates from Baltimore City, Anne Arundel, Baltimore, Howard, Montgomery and Prince George’s Counties. My colleagues and I will examine ways to strengthen the Greater Baltimore metropolitan area by reviewing existing State programs such as community revitalization, education and transportation strategies, identifying ways to foster better partnerships between the State and local governments, and recruiting academic and private sector expertise to recommend innovative regional strategies.
I am excited for the opportunity to continue to serve on this work group and contribute ideas to attract residents back to the Greater Baltimore metropolitan region.
My Bills for 2015 Legislative Session
Bills for the 2015 session that are guaranteed a committee hearing were due at 5:00pm on February 12th and have all been assigned to committees for bill hearings in the upcoming weeks. Any bills submitted after the 12th have to go to the Rules and Executive Nominations Committee for determination of their fates (ie, whether or not they will move on to a committee for determination).
Below are the formal names, bill numbers and detailed descriptions for five of my bills, as well as links to the official bills for more information:
HB439: Information and Services for Foster Children and Former Foster Children
Committee Hearing Date: February 19th, 1pm
In Maryland, 635 foster care youth transitioned out of the foster care system to live on their own last year. Additionally studies have shown that 1 out of 3 foster care youth who age out of the system at 18 will experience homelessness. I believe this must change. Youth experiencing homelessness are exposed to significant trauma. They are at disproportionate risk of mental, physical, and behavioral health problem; unemployment; crime victimization; sexual exploitation; unplanned pregnancy; and delinquency.
Quite often, foster care youth leave care without the skills, resources, and social connections necessary to successfully navigate the transition to independent adulthood, particularly without access to affordable housing or adequate income.
HB439 aims to provide solutions in preventing homelessness in foster care youth and proposes the following when they leave the system:
- Ensure that before youth between the ages of 18 and 21 transition out of foster care they have health insurance that will continue post-emancipation, have been screened for eligibility and assisted with applications for public benefits, and have stable housing and sufficient income to live independently;
- Require local departments of social services to educate current foster youth and former foster youth experiencing homelessness about the right to and procedure for reentering care;
- Ensure that at emancipation from foster care every foster youth has a driver’s license or state-issued identification card, health insurance information, medical records, birth certificate, and Social Security card; and
- Require local departments of social services to create plans for promoting and providing affordable housing and employment opportunities for former foster youth.
HB420: Commission on Rental Housing
Committee: Environment and Transportation
Committee Hearing Date: February 24th, 1pm
Many states have housing programs that emphasize homelessness prevention and affordable low-income housing. I believe Maryland should explore what some solutions could be regarding rental housing to address the overwhelming need for affordable housing in the state.
HB420 establishes a commission to study rental housing in the state of Maryland.
HB297: Unaccompanied Homeless Youth – Tuition Exemption (Modification)
Committee: Ways and Means
Committee Hearing Date: March 5th, 1pm
HB297 is a modification of HB482: Unaccompanied Homeless Youth – Tuition Exemption http://mgaleg.maryland.gov/2014RS/bills/hb/hb0482T.pdf that passed during the 2014 Legislative Session. This year, my proposed amendments to HB482 include defining an unaccompanied homeless youth by requiring a determination of homelessness by specified individuals or documentation and requiring a financial aid administrator to annually certify the youth’s homelessness.
HB893: Electric Companies – Customers – Security Deposits
Committee: Economic Matters
Committee Hearing Date: March 12th, 1pm
Many Marylanders are finding it more difficult to manage their household utility costs during a time where jobs have transitioned from high wage, standard payroll positions to low wage, temporary/contract work.
Presently, if an electric company customer is late paying their bill and is scheduled to have their services suspended, the utility provider will require a security deposit before services are restored in addition to the past due bill. Needless to say, this policy causes stress on the finances of already struggling families.
HB893 requires the utilities to post an easy-to-find and clearly articulated notice to existing customers about the possibility of being required to pay a deposit on all customer guidance about bill payment, on all paper bills, on the company web site, on online customer utility bill. The company must also warn customers at least 30 days before a deposit is imposed and provide a clear explanation of how to avoid imposition of the deposit. After the 30-day warning, the company must allow customers to negotiate payment arrangements or enter into an energy assistance program in order to avoid imposition of the deposit (in other words, allow customers a chance to get back on track even after the deposit technically could be in effect) via payment of arrears or creation of a payment arrangement.
HB693: Cottage Food Businesses – Revisions
Committee: Health and Government Operations
Committee Hearing Date: To be determined
Cottage food business owners sell baked and non-baked goods prepared from their homes to local farmers markets and public events. Compared to other states, Maryland’s cottage food business law is one of the most restrictive in the country by limiting the types of foods sold, the locations where it can be sold, and how much revenue the business can make. My bill will strengthen and expand the existing law and allow cottage food businesses a chance to thrive in the following ways:
- Extend the annual amount of revenue a cottage food business is allowed to make from $25,000 to $40,000.
- Expand the number of venues legally possible for selling cottage food business products.
- Create a statewide standard and licensing procedure for cottage food businesses that could be used in other jurisdictions.
Opportunities and Community Engagement
Invited Appearance: Comcast’s Newsmakers
Last week I was invited to speak on Comcast’s television segment Newsmakers. I discussed my views on Governor Hogan’s budget cuts to education and its impact to Baltimore City teachers and students. I also shared my ideas on local revitalization efforts, job creation and a brief synopsis of my bill on the cottage food industry.
Watch my interview!
Tax Filing Resources for Homeowners and Renters
Tax season is here and many Marylanders fall victim to predatory tax preparation companies who promise same-day cash refunds. Think twice! There are certified and trained tax preparation professionals who will prepare and file your taxes for free throughout Baltimore City. Do not allow companies who charge excessive fees to take advantage of you.
Below are links to locate free tax preparation services in your community:
For taxpayers 60 and older with low to moderate income:
The following are tax credits offered by the state for homeowners and renters. Please view the list below to see if you qualify:
The Homeowner’s Property Tax Credit
Homeowners who are income eligible based on a sliding scale up to $60,000 in gross income can get a credit towards their property taxes. To get this credit you need to fill out an application every year by September 1.
Veterans Property Tax Exemption
Veterans who are determined 100% disabled by the VA and the unmarried spouses of military members who were killed in the line of duty are eligible for a full property tax exemption.
Partial Tax Exemption for Blind Persons
Individuals who have permanent impairment of both eyes as determined by a medical doctor are eligible for a $15,000 reduction in the assessment of the property.
Renters Tax Credit
Renters who are income eligible may receive a credit based on their income and the amount paid in rent. This program is based on a sliding scale. To get this credit, you must apply every year by September 1.
43rd District Legislative Night in Annapolis
I would like to thank everyone who came to 43rd District Legislative Night in Annapolis on February 9th. The 43rd District Legislative Team: Senator Joan Carter Conway, Delegates Curt Anderson, Maggie McIntosh and myself, were thrilled that so many were able to attend on such a cold evening.
It was an honor to meet constituents who were concerned about the effects of Governor Hogan’s budget cuts and are determined to work with us in finding solutions. A special thanks to Mayor Stephanie Rawlings-Blake and members of the Baltimore Education Coalition (BEC) for attending, as well as the Northwood Elementary School Gospel Choir for showcasing their amazing voices two years in a row.
Keep in Touch
I will continue to do my best to provide detailed updates and alerts via email and other meetings, and you can follow my daily activities and breaking news by liking my Facebook fan page facebook.com/delmarywashington43 or following me at twitter.com/DelMaryW.
In addition, I encourage you to contact me with the issues that matter most to you at firstname.lastname@example.org or call the Annapolis office at (410) 841-3476.
I look forward to hearing from you.
Delegate Mary Washington