Area law­mak­ers ex­pect rev­enues, spend­ing fight

Dorchester Star - - Regional - By JOSH BOLLINGER jbollinger@star­dem.com Fol­low me on Twit­ter @ jbol­l_s­tar­dem.

EAS­TON — The next Mary­land leg­isla­tive ses­sion, which starts again in Jan­uary, will be a battle of spend­ing and rev­enues, ac­cord­ing to Mid-Shore law­mak­ers at a leg­isla­tive pre­view lun­cheon Thurs­day, Nov. 17.

The lun­cheon, an­nu­ally hosted by the Tal­bot County Cham­ber of Com­merce and spon­sored this year by Ex­press Employment Pro­fes­sion­als, of­fers Tal­bot County lo­cals an op­por­tu­nity to hear straight from those who rep­re­sent them in the state leg­is­la­ture about just what will be the big ticket items of dis­cus­sion for the up­com­ing Mary­land Gen­eral As­sem­bly.

Sen. Ad­die Eckardt, R37-Mid-Shore, said the state’s spend­ing is out­pac­ing its rev­enue pro­jec­tions, as it has at times in the past.

Es­ti­ma­tions place Mary­land at a $400 mil­lion bud­get short­fall, which is to in­crease to $800 mil­lion in two years, she said. She said Repub­li­can Gov. Larry Ho­gan in his bud­get last ses­sion left a lit­tle cush­ion “that would have sus­tained us through­out the now down­turn again, with the lack of rev­enues be­ing re­al­ized,” and that was met with an ad­di­tional set of man­dated spend­ing.

Del. Chris Adams, R-37BWi­comico, said 80 cents per dol­lar of rev­enue the state gets goes to­ward man­dated spend­ing — ed­u­ca­tion, pen­sions, to name a few — “which means the gover­nor has very lit­tle con­trol over real pol­icy that we can use to re­duce ex­penses, and it cre­ates a real prob­lem.”

Adams talked about the Mary­land Economic De­vel­op­ment and Busi­ness Cli­mate Com­mis­sion, which was put to­gether by the leg­is­la­ture, mainly Sen­ate Pres­i­dent Mike Miller and House Speaker Michael Busch, both Democrats. The com­mis­sion looked at Mary­land’s economic com­pet­i­tive­ness af­ter hold­ing pub­lic meet­ings all across the state and made a se­ries of rec­om­men­da­tions.

He said it found that the state’s rev­enues count on nearly 9 per­cent of wages, but 25 per­cent of the state’s economic out­put is fed­eral spend­ing.

“A week and two days ago we had an elec­tion. This elec­tion will have some sig­nif­i­cant con­se­quences on tax pol­icy and economic pol­icy,” Adams said. “We know that the fed­eral gov­ern­ment is hold­ing a $19.5 tril­lion debt. We as a coun­try em­ploy 22 mil­lion peo­ple in fed­eral, state and lo­cal gov­ern­ment, and at the same time our coun­try is only em­ploy­ing about 10 mil­lion peo­ple in man­u­fac­tur­ing. This is up­side down.”

Adams said peo­ple can ex­pect the in­com­ing Repub­li­can pres­i­den­tial ad­min­is­tra­tion, run by Pres­i­dent-elect Don­ald Trump, will deal with “sprawl­ing fed­eral bu­reau­cracy,” which will be a sig­nif­i­cant chal­lenge for Mary­land, con­sid­er­ing how de­pen­dent it is on fed­eral employment.

Eckardt said Mary­land is do­ing “much bet­ter than other places in the mid-At­lantic and the coun­try.” The state’s busi­ness rank­ing has in­creased, and it has out­paced Vir­ginia on sev­eral ini­tia­tives, in­clud­ing employment.

But rev­enues are still less than ex­pected.

“In­come tax was down; cor­po­rate tax was down; sales tax was down,” she said. “They were off­set by a lit­tle bit of left­over that in­flates those a lit­tle bit, but the re­al­ity is there’s an ac­tual short­fall of about $400 mil­lion.”

Del. Johnny Mautz, R-37BTal­bot, said rev­enues will drive a lot of the dis­cus­sion in An­napo­lis this up­com­ing leg­isla­tive ses­sion. An­other rev­enue es­ti­mate is set to be re­leased in De­cem­ber, so the out­look may change, he said.

But, one things about rev­enues that won’t change, he said, are “the 1 per­cent that pays the largest por­tion of rev­enues in taxes.”

“We’ve lost a lot of that 1 per­cent and they’re not com­ing back,” Mautz said. “What’s happened is that 1 per­cent has left Mar yland be­cause of our tax­ing. They’ve been re­placed by week­enders who are sec­ond-homers, and that has a big impact on our rev­enues.”

There will likely be a lot of dis­cus­sion on how to keep that one per­cent, but it’ll go back to tax pol­icy, which is han­dled at a com­mit­tee level, Mautz said, “and the in­di­vid­u­als who con­trol that com­mit­tee, I don’t think they have any in­ten­tion of chang­ing the taxes.”

That re­lates back to Adams’ point on the busi­ness cli­mate com­mis­sion, also known as the Au­gus­tine Com­mis­sion named af­ter chair­man and retired Lock­heed Martin Chief Ex­ec­u­tive Of­fi­cer Nor­man Au­gus­tine. The com­mis­sion gave 33 reg­u­la­tion rec­om­men­da­tions, five of which were passed as bills. It also gave 14 tax pol­icy rec­om­men­da­tions, one of which made it through the leg­is­la­ture last ses­sion.

“It has me con­cerned, be­cause when you have a (com­mis­sion) in a bi­par­ti­san fashion start mak­ing rec­om­men­da­tions for the leg­is­la­ture to act, in my hum­ble opin­ion, we have not done that yet,” Adams said.

“We have a gover­nor who is re­ally ac­tive to re­duce tax and our fees and ex­penses, who has tried to deal with reg­u­la­tions, with the dif­fer­ent bu­reau­cra­cies that we have in the state, but it re­ally is go­ing to take some advanced stuff through the leg­is­la­ture through leg­is­la­tion to make the busi­ness cli­mate bet­ter and they haven’t done that quite yet,” he said.

Sen. Ad­die Eckardt

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