Millionaires fleeing state tax cause 82 percent of income drop
Montgomery County, Maryland's richest county, is facing a budget shortfall of nearly $1 billion as high-income residents flee the state's millionaires tax. Budget officials told the County Council on Tuesday that Montgomery must once again write down its projected income tax revenues, this time by $44 million for this fiscal year and $100 million for next fiscal year, which starts in July. Those write-downs come up on top of a $24 million income tax reduction disclosed last week for the current fiscal year, and are in addition to a nearly $800 million budget gap projected for next fiscal year.
The budget holes have threatened the county's AAA bond rating and prompted County Executive Ike Leggett to propose raising energy taxes by 63.7 percent, eliminating 18 bus routes and closing a public library in Noyes. A weak economy that ate away at capital gains and slowed the growth of small businesses can account for much of the county's fiscal woes, but county officials said the state compounded the problem by raising taxes for millionaires to 6.25 percent from 5.5 percent in 2008.
"Their timing couldn't have been worse," said Councilman Mike Knapp, D-Germantown, who said the millionaires tax has had a "devastating" effect on the county's budget. "Talk about cutting yourself off at the knees."
A "major factor" for the county's budget woes is the loss of its millionaire taxpayers, according to county economist David Platt.
Montgomery lost $4.6 billion in taxable income from tax years 2007 to 2008. More than 82 percent of that drop comes from taxpayers with incomes of $1 million or more, county records show. County data show that 216 millionaires who filed taxes for 2007 did not file with the state for 2008, compared with an average of 119 in previous years. While some of those not filing may have died or decided not to file a tax return, county officials said there is plenty of anecdotal evidence that Maryland's millionaires moved to more tax-friendly states.
"It's pretty clear that people did take their income someplace else," said Tim Firestine, chief administrative officer, noting that the loss of just a handful of millionaires has a disproportionate effect on the county's revenues.
Worse yet, Knapp said, was the likelihood that many millionaires who left won't come back when the tax expires at the end of the year, leaving the county's tax base smaller.
"Even if the economy gets better, we're going to have less money," Knapp said.
The millionaires tax may become a campaign talking point. Former Republican Gov. Bob Ehrlich already has criticized Gov. Martin O'Malley, a Democrat, for his strong support of the tax.
Also in Montgomery
» The County Council gave preliminary approval to a revised "Science City" plan that supporters hope will make west Gaithersburg an epicenter of the life-sciences industry. Council members voted 8-1 on a straw vote, with Councilman Marc Elrich opposed, for a plan that scales back the county planning commission's proposal to 17.5 million square feet of development from 20 million. The plan also includes new safeguards against traffic congestion.
» A former County Council aide who sued the county for $5 million for allegedly violating an anti-discrimination law she helped write has dropped her lawsuit. Dr. Dana Beyer had charged in court records that the county discriminated against her because she is a transgender individual.
SOURCE: Washington Examiner
Showing posts with label general assembly. Show all posts
Showing posts with label general assembly. Show all posts
April 16, 2010
April 15, 2010
Considering economy, county fared well in 2010 session, legislators say
Montgomery County emerged from the 2010 General Assembly largely unscathed, lawmakers said Tuesday morning, moments after the midnight end of the session.
"This is not a year where you're going to have big slam-bang victories," House Majority Leader Kumar P. Barve said. "This is a year where you're going to protect your position and build for the future, and I think we did that."
Lawmakers started the 90-day session wrestling with a dire fiscal situation as the lingering recession depleted sources of state revenue.
"It's been a tough year to have happy things happen," said Melanie Wenger, director of the county's Office of Intergovernmental Relations.
And while there was pain enough to go around, Montgomery was able to relieve some of it through increases in state aid. The state's fiscal 2011 budget will send the county a 10.4 percent increase in aid, or about $72 million. That jump is the result of a fall in taxable income and a drop in real estate values, said Sen. Richard S. Madaleno Jr., a member of the Budget and Taxation Committee.
"People in Montgomery County haven't suddenly become poor, but if you were making $1.5 million two years ago and $800,000 this year, you're not standing in a bread line but you're paying a lot less in income tax," said Madaleno (D-Dist. 18) of Kensington.
One of the biggest issues for Montgomery lawmakers was the maintenance-of-effort penalty that the state Board of Education imposed on the county. State law requires that county school spending, on a per-pupil basis, at least equal the previous year's spending. The recession forced the county to fall below that level this year, prompting the penalty. The legislature overturned that penalty, in legislation Gov. Martin O'Malley (D) signed Tuesday.
"We got the abatement for the fine on maintenance of effort, and that was a big victory. The maintenance-of-effort law that we wrote for the future is one that will protect Montgomery County and other jurisdictions," said Barve (D-Dist. 17) of Gaithersburg. SOURCE: Gazette
"This is not a year where you're going to have big slam-bang victories," House Majority Leader Kumar P. Barve said. "This is a year where you're going to protect your position and build for the future, and I think we did that."
Lawmakers started the 90-day session wrestling with a dire fiscal situation as the lingering recession depleted sources of state revenue.
"It's been a tough year to have happy things happen," said Melanie Wenger, director of the county's Office of Intergovernmental Relations.
And while there was pain enough to go around, Montgomery was able to relieve some of it through increases in state aid. The state's fiscal 2011 budget will send the county a 10.4 percent increase in aid, or about $72 million. That jump is the result of a fall in taxable income and a drop in real estate values, said Sen. Richard S. Madaleno Jr., a member of the Budget and Taxation Committee.
"People in Montgomery County haven't suddenly become poor, but if you were making $1.5 million two years ago and $800,000 this year, you're not standing in a bread line but you're paying a lot less in income tax," said Madaleno (D-Dist. 18) of Kensington.
One of the biggest issues for Montgomery lawmakers was the maintenance-of-effort penalty that the state Board of Education imposed on the county. State law requires that county school spending, on a per-pupil basis, at least equal the previous year's spending. The recession forced the county to fall below that level this year, prompting the penalty. The legislature overturned that penalty, in legislation Gov. Martin O'Malley (D) signed Tuesday.
"We got the abatement for the fine on maintenance of effort, and that was a big victory. The maintenance-of-effort law that we wrote for the future is one that will protect Montgomery County and other jurisdictions," said Barve (D-Dist. 17) of Gaithersburg. SOURCE: Gazette
April 13, 2010
Md. House kills Saqib's Sunshine Act
"Bad News. The House referred my Legislative Voting Sunshine Act to 'summer study,' effectively killing it for a year."
-- Del. Saqib Ali (D-Montgomery), in a Facebook posting Monday night. SOURCE: Washington Post quoting Facebook post
MC can now own biotech company with public tax dollars
ANNAPOLIS - The Maryland General Assembly approved a bill that would allow Montgomery County to invest taxpayers dollars in biotech startups. The measure would empower Montgomery to make stock investments in Maryland companies. State law prohibits local governments from making equity investments, which are regarded as high-risk, according to a legislative analysis of the bill. The state government is allowed to make such investments, however, and Montgomery officials wanted in on the return.
"We want to allow the county to do what the state does," said Montgomery's legislative analyst, Sheila Sprague. Sprague said the bill, sponsored by the Montgomery delegation, was drafted at the urging of County Executive Ike Leggett. The Senate unanimously approved the bill, while the measure won approval by a 135-3 vote in the House. Gov. Martin O'Malley is expected to sign the measure. But a Montgomery County senator stopped the ball rolling when the measure went before the Senate Finance committee during the approval process.
"I read this [bill], and I see it as saying county government can own 25 percent of a private business ... and I actually have a problem with that," said Sen. Rob Garagiola, D-Poolesville. "It seems like there could be a lot of conflicts." Finance Committee Chairman Thomas M. Middleton asked Garagiola to return the bill to the Montgomery delegation and add a clawback provision to give taxpayers some financial security. When Garagiola aired his grievances before the delegation, Sens. Brian Frosh, D-Bethesda, and Mike Lenett, D-Aspen Hill, chimed in.
Frosh said the bill seemed "risky," and Lenett suggested, "Why don't we just save the money [instead of investing]." But Sens. Rich Madaleno, D-Wheaton, and Rona Kramer, D-Olney, said the bill was fine as written. Kramer said the money the county would be investing would be spent on grants and loans, and the county should be able to profit off its investments. Montgomery's Department of Economic Development would be in charge of making the county's investment decisions. The department has about $850,000 in county appropriations for business loans, said Director Steve Silverman. But the department can petition the County Council for more money. The bill would unleash the department's funds for investments, and there is no cap limiting the amount of money the county can use for investments versus loans.
SOURCE: Washington Examiner
"We want to allow the county to do what the state does," said Montgomery's legislative analyst, Sheila Sprague. Sprague said the bill, sponsored by the Montgomery delegation, was drafted at the urging of County Executive Ike Leggett. The Senate unanimously approved the bill, while the measure won approval by a 135-3 vote in the House. Gov. Martin O'Malley is expected to sign the measure. But a Montgomery County senator stopped the ball rolling when the measure went before the Senate Finance committee during the approval process.
"I read this [bill], and I see it as saying county government can own 25 percent of a private business ... and I actually have a problem with that," said Sen. Rob Garagiola, D-Poolesville. "It seems like there could be a lot of conflicts." Finance Committee Chairman Thomas M. Middleton asked Garagiola to return the bill to the Montgomery delegation and add a clawback provision to give taxpayers some financial security. When Garagiola aired his grievances before the delegation, Sens. Brian Frosh, D-Bethesda, and Mike Lenett, D-Aspen Hill, chimed in.
Frosh said the bill seemed "risky," and Lenett suggested, "Why don't we just save the money [instead of investing]." But Sens. Rich Madaleno, D-Wheaton, and Rona Kramer, D-Olney, said the bill was fine as written. Kramer said the money the county would be investing would be spent on grants and loans, and the county should be able to profit off its investments. Montgomery's Department of Economic Development would be in charge of making the county's investment decisions. The department has about $850,000 in county appropriations for business loans, said Director Steve Silverman. But the department can petition the County Council for more money. The bill would unleash the department's funds for investments, and there is no cap limiting the amount of money the county can use for investments versus loans.
SOURCE: Washington Examiner
April 12, 2010
Md. Senate Passes Medical Marijuana Bill
Maryland senators passed a bill to legalize medical marijuana, but the measure is not expected to pass the House of Delegates.
Senators voted 35-to-12 Saturday to allow pharmacies to distribute marijuana to patients with a doctor's prescription.
"We think this bill offers the most carefully crafted medical marijuana law in the country," said State Sen. Jamie Raskin (Montgomery County-D.). It offers legal protection and safe medical access to patients who are desperately in need and it takes every possible measure to prevent abuses." Other state lawmakers said the bill has little chance of passing the House of Delegates and becoming law. SOURCE: NBC Washington
April 6, 2010
State Senate Threatens to Derail Red Line, Purple Line, and Corridor Cities Transitway
That's not the stated reasoning—that would be testing, again, the viability of a heavy-rail option for the much-needed east-west transit line—but that would be the probable outcome if the Senate gets its wish: a full restudy of the Red Line, Purple Line, and Corridor Cities Transitway, three public-transportation projects proposed in Maryland. The House of Delegates rejected the Senate's proposal, but that doesn't mean it's dead.
Understand, a restudy will take years, re-evaluating alternatives will take years, and whatever new fight occurs after will probably take years as well—and it will take money, lots of money the Maryland Transit Administration doesn't have and needs to spend on keeping a strapped transit system's head above water.
Would it be worth it if the MTA restudied a heavy rail alternative and it magically dropped in cost by a billion dollars and fell within federal funding guidelines? Sure. The difference between heavy rail (read: subway) and light rail is significant enough that, yeah, we can hold out for a few years. But it won't be cheaper or, even if it was, it won't be cheap enough. As Maryland Politics Watch points out, both the current Red and Purple Line plans are at the cost-effectiveness wire. If the cost for a new subway line were actually lowered, one could only imagine how busted that subway system would likely be. Look at Baltimore's light rail line, for instance, done on the mega-cheap to avoid dealing with federal financing altogether. The reason the line seems to go nowhere is that—just as Baltimore subway advocates are proposing for the Red Line—it runs on freight-rail tracks that don't have much ridership around them, instead of building new tracks and lines in places such as Greenspring, Hampden, Towson, Charles Village, and other locales that could really use a well-placed light rail line. In other words, building a financially feasible subway line in Baltimore in the year 2010 means building a crappy one that runs through the woods.
SOURCE: Baltimore City Paper
Understand, a restudy will take years, re-evaluating alternatives will take years, and whatever new fight occurs after will probably take years as well—and it will take money, lots of money the Maryland Transit Administration doesn't have and needs to spend on keeping a strapped transit system's head above water.
Would it be worth it if the MTA restudied a heavy rail alternative and it magically dropped in cost by a billion dollars and fell within federal funding guidelines? Sure. The difference between heavy rail (read: subway) and light rail is significant enough that, yeah, we can hold out for a few years. But it won't be cheaper or, even if it was, it won't be cheap enough. As Maryland Politics Watch points out, both the current Red and Purple Line plans are at the cost-effectiveness wire. If the cost for a new subway line were actually lowered, one could only imagine how busted that subway system would likely be. Look at Baltimore's light rail line, for instance, done on the mega-cheap to avoid dealing with federal financing altogether. The reason the line seems to go nowhere is that—just as Baltimore subway advocates are proposing for the Red Line—it runs on freight-rail tracks that don't have much ridership around them, instead of building new tracks and lines in places such as Greenspring, Hampden, Towson, Charles Village, and other locales that could really use a well-placed light rail line. In other words, building a financially feasible subway line in Baltimore in the year 2010 means building a crappy one that runs through the woods.
SOURCE: Baltimore City Paper
March 28, 2010
Md. Senate passes budget that would shift cost of teacher pensions to counties
Maryland's Senate passed a $31.9 billion budget Wednesday that would shrink overall state spending and fundamentally shift responsibility for teacher retirement costs from the state to counties. The retirement-cost plan faces stiff resistance and is not expected to survive in the House of Delegates. But fiscal watchdogs and longtime lawmakers said the fact that the Senate passed the controversial change probably means it's now a matter of when, not if, Maryland counties will soon be responsible for hundreds of millions of dollars annually in teacher pension costs.
Maryland pays nearly the entire cost of every teacher retirement plan in the state, although counties negotiate the teacher salaries that ultimately dictate the amount the state will have to pay in retirement costs. The counties make Social Security payments. In recent years, as Maryland has significantly increased funding for education and many counties have gained national attention for the quality of their classrooms, teacher pay has increased, and in turn, the state's long-term teacher pension costs have soared.
SOURCE: Washington Post
March 23, 2010
Meyer Marks hosts announcement party on 3/25 opposing Frosh
BETHESDA, MARYLAND – Maryland's #1 advocate against guns and Jessica's Law now has a Republican challenger. In Maryland's District 16, Meyer Marks, a government affairs consultant for health care and tort reform, will file with the Board of Elections to run against a personal injury lawyer. As a State Senator, Marks' goal is to create a more conducive environment for businesses with greater fiscal accountability and government transparency. Marks is also concerned that Maryland ranks as a violent haven for criminals in the United States.
"Frosh has grown seriously out of touch with the needs of the voters," says Marks. "Probably because of being a personal injury lawyer, he has not adequately addressed crime issues in Maryland, either. Frosh seems more interested in protecting criminals than he is protecting victims of crime."
Frosh has been in the General Assembly since 1994 and has opposed broadly-supported legislation to tighten restrictions on criminals with Jessica's Law, a bill that strengthened sentences for sexual crimes committed against children. For instance, during a hearing on the bill by the Senate Judicial Committee, chaired by Frosh, advocates of the bill were treated so poorly that the President of the Maryland Senate later apologized. When the bill came to a vote by the entire Senate, Frosh was one of only three people to vote against strengthening the sentences. In the Maryland House, the bill was adopted unanimously. In addition, Frosh is an ardent supporter of gun control laws, declaring that anyone who wishes to carry a gun (other than police) is "nuts."
Meyer Marks was raised in Little Rock, Arkansas, where he received a B.A. in International Relations from the University of Central Arkansas. In addition, he is pursuing a Master's Degree in European Studies from Georgetown University. In 1988, he founded Marks and Associates, a government relations firm that specializes in health care and educational issues. He is also the caregiver for his mother, who has Alzheimer's Disease, sensitizing him to the illness. In 2008, Marks was a candidate for U.S. Congress in Maryland’s Eighth District. For over 25 years, Marks has worked to craft public policy on the state and federal levels. He resides in Bethesda, Maryland.
Marks' event will be on Maryland Day, Thursday, March 25 from 7 to 9 p.m. at 4242 East-West Highway in Chevy Chase. Street parking and public parking is limited. Contact him at 240-476-5533 or meyer@marksformaryland.org or www.MarksForMaryland.org.
"Frosh has grown seriously out of touch with the needs of the voters," says Marks. "Probably because of being a personal injury lawyer, he has not adequately addressed crime issues in Maryland, either. Frosh seems more interested in protecting criminals than he is protecting victims of crime."
Frosh has been in the General Assembly since 1994 and has opposed broadly-supported legislation to tighten restrictions on criminals with Jessica's Law, a bill that strengthened sentences for sexual crimes committed against children. For instance, during a hearing on the bill by the Senate Judicial Committee, chaired by Frosh, advocates of the bill were treated so poorly that the President of the Maryland Senate later apologized. When the bill came to a vote by the entire Senate, Frosh was one of only three people to vote against strengthening the sentences. In the Maryland House, the bill was adopted unanimously. In addition, Frosh is an ardent supporter of gun control laws, declaring that anyone who wishes to carry a gun (other than police) is "nuts."
Meyer Marks was raised in Little Rock, Arkansas, where he received a B.A. in International Relations from the University of Central Arkansas. In addition, he is pursuing a Master's Degree in European Studies from Georgetown University. In 1988, he founded Marks and Associates, a government relations firm that specializes in health care and educational issues. He is also the caregiver for his mother, who has Alzheimer's Disease, sensitizing him to the illness. In 2008, Marks was a candidate for U.S. Congress in Maryland’s Eighth District. For over 25 years, Marks has worked to craft public policy on the state and federal levels. He resides in Bethesda, Maryland.
Marks' event will be on Maryland Day, Thursday, March 25 from 7 to 9 p.m. at 4242 East-West Highway in Chevy Chase. Street parking and public parking is limited. Contact him at 240-476-5533 or meyer@marksformaryland.org or www.MarksForMaryland.org.
March 19, 2010
Bill would make dialing a mobile phone number in your car illegal
Quotables
"This makes criminals out of virtually everyone in this state."
-- Sen. E.J. Pipkin (R-Queen Anne's), objecting to a bill on the Senate floor that would prohibit the "use of a driver's hands to use a handheld telephone other than to initiate or terminate a wireless telephone call or to turn on or off the handheld telephone."
SOURCE: Washington Post
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