Delegate Mike McDermott: Empty Cupboard and a Demanding King

  • Empty Cupboards and a Demanding King
  • Taxes, Tolls, and Fees
  • By Delegate Mike McDermott

Oct. 31st, 2011

As the month of October fades from view, clarity now comes to Marylanders as to the actions taken by the democratic majority in the General Assembly. Those actions culminate in tax, toll, and fee increases at a time when our state’s economic engine is broken and we find ourselves coming in at number 50 in jobs created, and number 1 in jobs lost.

We hear the chant of, “jobs, jobs, jobs”, but the echo can be heard in empty buildings from Garrett to Worcester. Every extra dollar taken by the state government is just another dollar missing from our local economy, and, with a General Fund Budget that spends 12% more than the previous year, and a Capital Budget almost 200 million more than what was recommended by the non-partisan bean counters, increases are unavoidable. The House Republican Caucus offered an alternative budget that limited increases in spending to 3% (the same level of projected revenue increases), but it was rejected.

So, here is a list of what is proposed by the administration and what has been enacted and signed into law in 2011, as unpleasant as it is:

Governor’s Commission on Sustainable Growth (proposal)
Increase in Bay Restoration Fee (Flush Tax)

  • In total 200% increase from $30 per year to $90 per year by FY ’15 (July 2014)
  • In FY ’13 (July 2012) a 100% increase from $30 per year to $60 per year.
  • In FY 15 a 50% increase from $60 per year to $90 per year
  • Indexing to inflation beginning in FY 16 with a cap of 3% per year

Blue Ribbon Commission on Transportation Funding (proposal)

  • 64% increase in the gas tax over three years (from 23.5¢ to 38.5¢)
  • 100% increase in emission inspection fees (from $14 to $28)
  • 50% increase in vehicle registration fees (from $50.50 to $75.75)
  • 8% increase in vehicle titling tax (from 6% to 6.5%) or elimination of trade-in allowance

Toll Increases (Approved by the Transportation Authority 9/22/11)
Key Bridge/Fort McHenry Tunnel/ Harbor Tunnel

  • 50% increase from $2 both ways to $3 both ways effective November 1
  • 33% increase from $3 both ways to $4 both ways effective July 1, 2013
  • Total increase 100% from 2011 to 2013.

JFK Memorial Highway Section of I-95/Thomas J. Hatem Memorial Bridge

  • 20% increase from $5 to $6 effective November 1
  • 33% increase from $6 to $8 effective July 1, 2013
  • Total increase 60% from 2011 to 2013

Bay Bridge/US 301 Bridge

  • 60% increase from $2.50 to $4 effective November 1
  • 50% increase from $4 to $6 effective July 1, 2013
  • Total increase 140% from 2011 to 2013

Tax and Fee Increases – 2011 Regular Session
Budget/BRFA
Taxes and Fees Increases in the FY 2012 Budget/BRFA

  • Vehicle Titling Tax doubled $50 to $100
  • Vanity Plate Fee doubled from $25 to $50
  • Land Recording Fees – doubled $20 to $40
  • Birth Certificate Fees – doubled from $12 to $24
  • Increase in Hospital Assessments adding 2.5% to rates
  • Increasing Nursing Home Tax from 4% to 5.5%
  • Parole Supervision Fee – doubled from $25 to $50

New Taxes and Fees in the FY 2012 Budget/BRFA

  • 2% Premium Tax on the Injured Worker Insurance Fund (IWIF)
  • Payroll Garnishment Fee for State Employees
  • Maryland Higher Education Commission Program Approval Fee

Other Bills With Tax and Fee Increases from 2011 Session

  • HB 1196 – Increases the maximum fee imposed by Maryland Historical Trust from 1% to 3%.
  • HB 362 – Increases Licensing Fees for the Home Improvement Commission by $25 for each type of license and a new $20 fee for all initial applications.
  • HB 1213/SB-994 – Increases sales tax on alcohol 50% from 6% to 9%
  • HB 195 – Increases the licensure fee for a secondhand precious metal object dealer or pawnbroker from $75 to $300
  • HB 1022 – Establishes a registration and renewal fee of $1,000 for Debt Settlement Services
  • HB 881 – Establishes an application fee of $100 and a $100 per vehicle registration fee for transporting waste kitchen grease.
  • HB 523 – Requires the State Court Administrator to assess a $100 fee for the special admission of an out-of-state attorney.

Viewing these increases with a backdrop of the 2007 increases is worth noting. How many times will we be told about how increases will be placed in “lock boxes” and how taxes and tolls will support specific projects only to see them channeled into the ever increasing General Fund. Speaking of those not to distant increases, less we forget:

Remembering When… The 2007 Special Session
The Largest Tax Increase In Maryland’s History (so far anyway)

  • 20% Increase in the Sales and Use Tax (From 5% to 6%)
  • Also included an expansion to Computer Service which was repealed in the ’08 regular session and replaced with the “Millionaire’s Tax”, a 6.25% tax rate on incomes over $1 million. The “Millionaire’s Tax” sunsetted on December 31, 2010.
  • 18 % Increase in the Corporate Income Tax (From 7% to 8.25%)
  • 20% Increase in Vehicle Excise Tax
  • 117% Increase In Vehicle Titling Fee
  • 100% Increase in Cigarette Tax
  • 5% Income Tax Increase on Incomes over $150,000 (4.75% to 5%)
  • 11% Income Tax Increase on Incomes over $300,000 (4.75% to 5.25%)
  • 16% Income Tax Increase on Incomes over $500,000 (4.75% to 5.5%)

(*Many thanks to the House Republican Caucus for compiling the facts and figures)

We all understand the need for government to collect taxes, but how can we accept outrageous government growth in spending when our wallets are bare? Maryland is suffering under a progressive weight from which she longs to be free. Her people are suffering, her businesses fleeing, and those in power refuse to yield or learn.

Maryland, my Maryland…hang in there. Your people are wiping the slumber from their eyes.

Baltimore Sun: Chesapeake Bay cleanup fee increase proposed

A state task force called Tuesday for tripling the “flush fee” Maryland homeowners pay as a way to help finance an accelerated cleanup of the Chesapeake Bay.

The 28-member task force, appointed by Gov. Martin O’Malley to tackle sewage and growth issues, voted overwhelmingly to recommend that the $2.50 monthly bay restoration fee be doubled next year and increased to $7.50 a month by 2015. The fee is levied on water and sewer bills for utility customers, and on property tax bills for homeowners on septic systems.

For full story click here: http://www.baltimoresun.com/features/green/bs-gr-flush-fee-20111108,0,626616.story

Star Democrat: Sen. Pipkin bashes MdTA on toll hikes

EASTON State Sen. E.J. Pipkin, R-36-Upper Shore, is mad Maryland drivers using most Maryland toll bridges, tunnels and highways began paying much higher fees starting Tuesday as the result of the Maryland Transportation Authority board’s decision to almost double the tolls.

“It’s deplorable that the unelected and unaccountable MdTA is allowed to raise the tolls at will and without a vote from the General Assembly,” said Pipkin in a Tuesday press release. “And they won’t stop here. You can bet they will continue to raise the tolls over the next few years.”

Pipkin said MdTA added insult to injury by not even allowing public comment at the final meeting when the drastic hike was approved. The MdTA board members are not elected, but are appointed by and answer to Gov. Martin O’Malley.

Pipkin said the governor continues the assault on Maryland motorists by supporting taxes and fees aimed at drivers. The O’Malley’s Blue Ribbon Commission recently recommended a 15-cent a gallon tax increase, a 50-percent increase in vehicle registration fees, doubling the vehicle emissions test fee from $14 to $28 and increasing the titling tax.

“The average Marylander will soon not be able to afford to drive to work”, said Pipkin in a statement.

Pipkin plans to introduce a package of bills in January requiring the General Assembly approve any toll increase, in the same manner that that the state’s legislative body approves taxes. During this fall’s speical assembly session, Pipkin introduced bills to terminate the MdTA board entirely, but they failed to go up for a vote.

“There needs to be checks and balances in the process, especially when you’re targeting Marylanders’ checkbooks,” Pipkin said in a statement.

For full story click here:

Washington Post:Gov. O’Malley ‘at war’ with rural Maryland, Republicans say

By , Published: October 30  Direct Link to Washington Post Article (click here)

Maryland Gov. Martin O’Malley (D) has never needed rural voters to get elected, and for his sake, that’s been a good thing.

O’Malley’s environmental agenda has repeatedly agitated farmers, fishermen, developers and drillers in his nearly five years as governor. Still, the relationship between the former big-city mayor and residents of Maryland’s more conservative countryside has remained mostly cordial.

At least, that is, until now.

“We’re at war. Simply, at war,” Senate Minority Whip E. J. Pipkin (Queen Anne’s) told more than 50 rural — and mostly Republican — lawmakers who gathered last week in the back of an Annapolis restaurant to plot a counteroffensive.

O’Malley has long been unabashedly liberal in his environmentalism and a strong proponent of smart-growth policies. But severalof his initiatives — some of them years in the making — have converged near the policy finish line in recent weeks, riling a broad swath of the state’s rural Republicans, independents and even some conservative Democrats who view his administration’s efforts as government overreach.

The governor has invoked a 37-year-old law to withhold state funding from local governments that fail to curb sprawl. He has proposed aban on most new septic systems, which critics say will choke off rural development. And he has continued to push for a Chesapeake Bay cleanup that counties warn will cost billions of dollars and untold jobs.

The face-off has opened a new front for O’Malley in advance of a high-stakes General Assembly session that will test his power to eke out wins on controversial measures, including same-sex marriage, costly offshore wind development and higher taxes for transportation.

It also comes as O’Malley is busy preparing for a trade mission to India next month and splitting his time between the governor’s mansion and national fundraising efforts to help elect Democratic governors elsewhere.

“From Annapolis, he’s dictating how communities across the state should develop, and it’s wrong. It’s arrogant,” said Thomas Browning, a Frederick County farmer who attended last week’s meeting.

Alluding to O’Malley’s perceived national ambitions, Pipkin said opponents would seek to “get the word out. . . . He’s at war with rural Maryland,” Pipkin said.

“He just passed a massive toll increase, he’s proposing a gas tax increase, a tripling of the [sewer] tax, and then you add on this power grab over the growth issue.

“Does it really help the governor in his future aspirations . . . to be so abusive to the rural parts of his own state? You tell me: What is the Iowa caucus going to say?”

O’Malley spokeswoman Raquel Guillory said Pipkin’s criticism is misguided.

“The governor, unlike politicians that Pipkin may know, doesn’t make decisions on Maryland’s growth based on politics,” Guillory said. “He is basing his decisions on what is best for Maryland now and in the future.”

The goal of O’Malley’s efforts, she added, is the opposite of what Pipkin and others contend. “These efforts are aimed at reducing sprawl, improving the quality of the bay and protecting the rural areas in Maryland — how is that war?” she asked.

The focal point of most rural residents’ angst is the near completion of O’Malley’s effort to develop a statewide land-use blueprint, known as Plan Maryland.

The master plan seeks to maintain as agricultural or forest land more than 400,000 acres that state planners project would otherwise be developed over the next 20 years. It would do so by targeting development in approved growth areas — most along the Baltimore-Washington corridor. State funding for school construction and other community needs would be used to reward or punish local governments that do or don’t meet targets to create more dense housing and development.

At a hearing in August, O’Malley summarized his view most succinctly: Homes built on two-acre plots with septic systems are sprawl; homes built within city limits on half-acre plots, and in range of sewer hookups, are not. The plan “is not a straitjacket for counties,” O’Malley said. “This is not a wall that prohibits counties from making stupid land-use decisions. They’re still free to do that, but we’re not going to subsidize it anymore.”

The governor maintains that if followed, the plan will reduce by more than $1.5 billion annually the amount the state spends on building roads to new developments, and willcut by hundreds of millions more the amount needed to expand and improve water and sewer systems.

O’Malley is hoping to succeed in codifying such a plan where several previous Democratic governors have failed. He is employing a little-known 1974 law to enact the plan without further hearings or action from the General Assembly, a tactic that has helped stir anger in the state’s rural reaches.

Richard E. Hall, O’Malley’s secretary of planning, emphasized that the plan has been in the works for more than three years and that the administration has extended its period for public comment. The administration has used that public input to shrink the 180-page document by half.

He called it unfortunate that critics have chosen to lump Plan Maryland in with ongoing negotiations over how to reduce septic systems that contribute a disproportionately large share of pollution to the ChesapeakeBay.

Key members of a task force, set up by the General Assembly and the governor after O’Malley’s septic proposal first fell short in the legislature this year, reported last week that to help pay for some of the governor’s proposed septic rules, the task force expects to recommend a doubling — and, eventually, a tripling — of the state’s $30 “flush tax.”

On a separate track, many rural lawmakers are also upset with a multi-state effort known as the Watershed Implementation Plan, or WIP. A Maryland State Builders Association study contends that WIP will cost billions of dollars and tens of thousands of jobs.

“The [critics] have a narrative that they’ve developed — that all of these run together — but we’ve never had anything that ties them together,” Hall said. “For some who want to speak out against and tear down Maryland’s legacy of being a strong smart-growth state, that’s easy for them to do, even though Plan Maryland has been out there for years. It’s been a good punching bag.”

Hall said the administration is moving forward with plans for the governor to enact Plan Maryland next month. Several county executives have urged the governor to wait and let the legislature vote on the plan when it reconvenes in January. And at the meeting last week in Annapolis, Del. Kathy Afzali (R-Frederick) urged a revolt by counties if O’Malley moves forward without legislative approval.

Democratic Sen. Thomas M. “Mac” Middleton, a Charles County farmer, countered that he thinks the governor’s heart is in the right place on Plan Maryland and that a buffer is needed between development and farmland. Buthe said he does not think the legislature is ready to accept O’Malley’s septic plan without major changes.

Many depend on rural residential development for their livelihood, he said. And it should not be up to the state to dictate where communities grow, Middleton said.

“A lot of mouths have to be fed with development,” he said. “You can’t put such a damper on these rural communities.”

The governor’s efforts also have galvanized the state’s tea party. Carroll County has put up thousands of dollars for a summit on Monday featuring internationally known climate-change skeptics andaimed at debunking some of the premises behind Plan Maryland.

“We thought it was worthwhile to get some credible speakers to come and take a look at some of those debatable trends and assumptions,” said Robin Bartlett Frazier, a member of the county’s Board of Commissioners. Also, she said, “there’s an element that has to do with following the Constitution, protecting property rights and free rights.”

Senator Pipkin: O’Malley’s War on Rural Maryland

As soon as he was re-elected, Governor Martin O’Malley began pushing legislation and policies that made it painfully clear his war on rural Maryland had shifted into high gear. As weapons of war, the Governor is using policies to strip property rights, impose higher and unfair taxes and tolls and ride roughshod over local planning and zoning, which will result in killing jobs and economic growth now and in the future.

At the end of his annual state-of-the-state speech this past January, O’Malley stunned rural representatives when he said he wanted approval of legislation to ban septic systems in new housing developments of five or more homes. For the 1.6 million people who live in rural Maryland, passage of O’Malley’s septic ban would spell an end to employment and the devaluation of $1 trillion worth of land, including area farmland. Under the guise of acting to protect the safety and adequacy of well sites or sewage disposal areas on a lot or adjacent lots, the Secretary of MDE assumes the role of Land Czar with the final word. When one considers that septic systems contribute only 1.6% of the nitrogen load entering the Bay, O’Malley’s septic system ban is nothing short of overkill and a shameful assault on property rights.

If a septic system ban doesn’t turn rural Maryland into a mammoth land preserve, O’Malley’s Plan Maryland surely will. Plan Maryland will usher in the era in which the State Planning Department is elevated to a super-high bureaucratic position with the power to veto local zoning or simply refuse to construct the roads and schools to support local zoning plans. The American respect for property rights will become a curious relic of the past. Landowners still will be expected to pay property taxes on their land, but will be stripped of their right to develop it.

Rural Western Maryland is sitting on rock formations of Marcellus Shale where stores of natural gas are trapped. According to the Unites States Geological Survey, the shale formation, which stretches from New York to Virginia contains 84 trillion cubic feet of recoverable natural gas. The use of hydraulic fracturing to drill for natural gas poses some risks which must be addressed. But in the meantime, Pennsylvania and West Virginia are getting the benefit of thousands of jobs created by drilling for natural gas. Governor O’Malley has appointed a state panel to recommend natural-gas drilling regulations. A final report, with recommendations relating to the impact of drilling, is due by August 1, 2014. Critics believe that O’Malley is using the panel to delay investment in the state’s Marcellus Shale. I am one of those critics.

Recently, Governor O’Malley stood by and watched the Maryland Transit Authority (MdTA) approve a sky high toll increase on Maryland’s bridges, tunnels and roads that will further serve to depress the economy of the rural Eastern Shore and stymie job creation. Tolls on multiple axel vehicles were doubled assuring that surcharges will be imposed on deliveries to both small and large businesses. On the Bay Bridge, alone, tolls will nearly triple by 2013. Much of the revenue will be used to pay for the InterCounty Connector (ICC), an 18-mile strip of road joining Montgomery and Prince George’s Counties, on which most rural residents will never travel.

The ICC was touted as being able to pay for itself. We now know that is not true. It should be noted that the ICC is the only Maryland toll facility where the tolls were not increased. The MdTA Board, which increased the tolls is appointed by the Governor and can raise tolls without any approval of the Legislature.

The plan to increase by 15 cents the state’s 23.5 cents per gallon gas tax is another example of the war on rural Maryland. Generally, rural residents drive more miles than urban or suburban Marylanders. Any gas tax increase will impact disproportionately on people who live in rural areas. And to add insult to injury, the increased gas tax revenue will benefit rural people least. Mass transit projects, which rural people do not use, will eat up most of the gas tax revenue. Let’s face it, building urban and suburban mass transit projects, such as the Red and Purple metro lines, have always and will continue to take precedence over road improvement and badly-needed bridge repair or replacement in rural Maryland.

Adding to the assault on rural Maryland, the costs associated with the Watershed Improvement Plan has been dumped on the rural counties. The Plan has a price tag of $11 billion for just Phase I, according to a report April 2011 report by Sage Policy Group, a public policy consulting firm, with billions more as the plan is fully implemented.

Governor O’Malley likes referring to the state as “One Maryland.” At best, that term is a cynical joke. At worst, it is a lie. Governor O’Malley has made it clear through his policies that in his
“One Maryland,” there is no room for rural Maryland.

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