Photo by Tony J Photography
By Mark Croatti
brbrMaryland’s part-time legislature will return for its annual 90-day session this January, with a full plate of pressing issues waiting. Despite the September 11, 2001 attacks, an increase in local terrorism since the 2002 “DC Sniper,” social unrest in Baltimore and elsewhere on the rise, and a growing opioid crisis, Maryland still employs a part-time legislature, albeit one that meets in special session often enough to be considered a “hybrid” legislature by the National Council of State Legislatures. Overall, only fourteen pure part-time legislatures remain in the United States. In Maryland, as in many other similar states, the game is on to get as much done in as little time possible. In the age of state budget constraints—and with little additional assistance available from a federal government $20 trillion in debt—that is getting increasingly difficult to do.
brbrThe usual expenditures will be waiting for the General Assembly in January: education (33 percent of the budget in 2018), health care (32 percent), transportation and public safety costs (17 percent), and a variety of other line items (18 percent) that include state employee salaries, debt management, and protection of natural resources. Some of the issues outside of those categories that dominated the 2017 legislative session included fracking, paid sick leave, and the cash bail system. Funding for major transportation projects was left to future legislative sessions—and not necessarily the 2018 session—because many in the legislature want to wait until after the 2018 gubernatorial elections before possibly agreeing to pay for expensive infrastructure proposals (deemed necessary by Governor Hogan) driven by a potentially lame duck executive. Thus, the 2018 legislative session may be a tad on the tame side compared to what could be in store for 2019 if Governor Hogan is re-elected.
brbrWith the addition of the most recent casino at National Harbor, Maryland’s six casinos currently generate about $135 million a month in revenue. Since 2010, total profit for the six casinos, in addition to state lottery sales, has topped $5.7 billion--$2 billion of which was added to the Educational Trust Fund. Just last year alone (2016), with all six casinos operating, Maryland collected almost half of that $2 billion total—a little over $1 billion—with approximately $500 million coming from casinos and another roughly $500 million from lottery sales. Of this amount—a little over $1 billion, which represents the total amount of gaming revenue for 2016 that went into state coffers—only about $600,000 went into the Educational Trust Fund. Statewide, school district budget-funding requests topped $17 billion. The state contributed 48 percent—about $8 billion—as did the counties. Another $800 million came from the federal government, representing the final 4 percent, a drop from the up to 10 percent of federal funding given before the September 11th attacks. Therefore, the $600,000 that went into the Educational Trust Fund in 2016 was only about 3 percent of the total spent on education in the state, a contribution that when combined with the federal government’s 4 percent donation, equals only 7 percent—far less than what the federal contribution alone had once been.
brbrMaryland’s part-time legislature will return for its annual 90-day session this January, with a full plate of pressing issues waiting. Despite the September 11, 2001 attacks, an increase in local terrorism since the 2002 “DC Sniper,” social unrest in Baltimore and elsewhere on the rise, and a growing opioid crisis, Maryland still employs a part-time legislature, albeit one that meets in special session often enough to be considered a “hybrid” legislature by the National Council of State Legislatures. Overall, only fourteen pure part-time legislatures remain in the United States. In Maryland, as in many other similar states, the game is on to get as much done in as little time possible. In the age of state budget constraints—and with little additional assistance available from a federal government $20 trillion in debt—that is getting increasingly difficult to do.
Photo by Tony J Photography
Delayed from Last Year: Major Transportation Projects
brbrAccording to the Governor’s office, last year Maryland’s budget for fiscal year 2018 totaled approximately $43.5 billion, a billion dollars more than the previous fiscal year (2017), which had seen an over $3 billion increase from fiscal year 2016. It is safe to assume then, that Maryland’s budget for fiscal year 2019 will almost certainly top $45 billion for the first time.brbrThe usual expenditures will be waiting for the General Assembly in January: education (33 percent of the budget in 2018), health care (32 percent), transportation and public safety costs (17 percent), and a variety of other line items (18 percent) that include state employee salaries, debt management, and protection of natural resources. Some of the issues outside of those categories that dominated the 2017 legislative session included fracking, paid sick leave, and the cash bail system. Funding for major transportation projects was left to future legislative sessions—and not necessarily the 2018 session—because many in the legislature want to wait until after the 2018 gubernatorial elections before possibly agreeing to pay for expensive infrastructure proposals (deemed necessary by Governor Hogan) driven by a potentially lame duck executive. Thus, the 2018 legislative session may be a tad on the tame side compared to what could be in store for 2019 if Governor Hogan is re-elected.
Photo by Vaya Pharma
Breaking Down the Fiscal 2019 Budget
brbrBefore predicting what issues the 2018 legislative session will focus on, let alone agree to fund, it may help to understand where the $45 billion budget for fiscal year 2019 will be coming from. According to the Governor’s office, more than a third of Maryland’s revenue comes from taxes (37 percent), with almost a quarter of those funds (over $10 billion or 24 percent) derived from individual and corporate income taxes, while sales and fuel taxes provide the rest (another $6 billion or 13 percent). The remaining 62 percent of Maryland’s annual revenue total is the result of a combination of two smaller categories: funded accounts (federal funds, special funds, and general funds totaling about $20 billion or 47 percent) and fees (revenue from higher education and transportation that adds up to $6.5 billion or 15 percent). The last 1 percent comes from state lottery revenue (over half a billion dollars).
Gaming Revenue and Education
brbrIt may come as a surprise that Maryland’s annual share of gaming revenue is far less than expected and far from what had once been promoted. According to the Maryland Lottery and Gaming Control Agency, last year (2016) Maryland’s take from gaming was a little over $1 billion from two roughly equal sources: state lotteries (which date back to 1973), and the six casinos recently built between 2010 and 2016 (long after Maryland had shut down slot machine parlors in the late 1960s).brbrWith the addition of the most recent casino at National Harbor, Maryland’s six casinos currently generate about $135 million a month in revenue. Since 2010, total profit for the six casinos, in addition to state lottery sales, has topped $5.7 billion--$2 billion of which was added to the Educational Trust Fund. Just last year alone (2016), with all six casinos operating, Maryland collected almost half of that $2 billion total—a little over $1 billion—with approximately $500 million coming from casinos and another roughly $500 million from lottery sales. Of this amount—a little over $1 billion, which represents the total amount of gaming revenue for 2016 that went into state coffers—only about $600,000 went into the Educational Trust Fund. Statewide, school district budget-funding requests topped $17 billion. The state contributed 48 percent—about $8 billion—as did the counties. Another $800 million came from the federal government, representing the final 4 percent, a drop from the up to 10 percent of federal funding given before the September 11th attacks. Therefore, the $600,000 that went into the Educational Trust Fund in 2016 was only about 3 percent of the total spent on education in the state, a contribution that when combined with the federal government’s 4 percent donation, equals only 7 percent—far less than what the federal contribution alone had once been.
Photo by Jay Baker
More of the Washington, D.C. Effect
brbrWith the Affordable Care Act’s major provisions being systematically defunded by Congress, states are being asked to help fill in the gaps, and yet an even tougher balancing act for the states may lie ahead pending additional similar actions by Washington, D.C. Maryland’s focus on creating more “green jobs,” stabilizing community tension in Baltimore City, and making progress on the growing opioid public health crisis could be jeopardized. In last year’s session, Maryland State Senate President Thomas V. “Mike” Miller, the nation’s longest-serving state Senate President, had said that what happens in Maryland is now “defined by what happens on Capitol Hill and how we as a state respond to the new Cabinet and their desires.” This cautious approach is expected to be followed even more rigidly in 2018.The Opioid Epidemic
brbrFor others, that approach may not work. Senate Finance Committee Chairman Thomas M. Middleton (D-Charles) proposed last year that treatment centers stay open and that the state be required to boost provider-reimbursement rates by associating the funding formulas with medical cost inflation rates. The opioid crisis has since gotten considerably worse. According to a recent article in The Washington Post, Maryland deaths related to fentanyl have reached a panic level. With fatalities resulting from this powerful synthetic opioid surging in early 2017—more than double the rate from the same time period in 2016—they now represent the majority of drug-related overdose deaths.
