Donald Fry: Staying focused in Annapolis in an election year

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By: Donald C. Fry 

As lawmakers return to Annapolis for the start of a new legislative session, they face a myriad of familiar issues, chief among them the renewed structural budget gap.

After years of budget containment measures, the beginning of FY 2014 saw the structural budget gap, once a staggering $1.7 billion, reduced to nearly zero. While the most recent reports from the Board of Revenue Estimates and the Spending Affordability Committee are cautiously optimistic about future growth, Maryland finds itself still facing an estimated $361.9 million structural deficit in FY 2015.

On the opening day of the session this week, both Senate President Mike Miller and House Speaker Michael Busch indicated that, with $700 million in the state’s Rainy Day fund and other carryover appropriations from the FY 2014 budget, the deficit can be adequately addressed.

The deficit is “nothing we can’t manage,” Miller told WEAA’s Marc Steiner during interviews conducted at the annual first-day “Annapolis Summit,” hosted by The Daily Record.

The deficit “is going to be manageable,” Busch agreed.

Nevertheless, coupled with uncertainties associated with the costs of health care reform and federal government budget debates, the state's budget will be take center stage during the legislative session. The passage of a balanced budget is the only piece of legislation that must be enacted by the legislators prior to adjourning Sine Die on April 7.

Also expected to be a prominent issue during this year's session is pressure from national and state advocates to increase Maryland's minimum wage.  Across the nation, the minimum wage in 13 states increased on January 1, while Montgomery and Prince George's counties have passed bills in their respective county councils to increase the minimum wage to $11.50 and hour by 2017. Maryland's minimum wage, at $7.25 an hour for most employees, is in line with both the federal minimum wage and surrounding states.

In opening-day interviews, Governor Martin O’Malley, Miller and Busch all indicated preliminary support for raising the state’s minimum wage, but neither offered details on what wage levels they would consider fair or adequate.

Meanwhile, Miller and Busch said they would support easing Maryland’s estate tax burden. Noting that Maryland is one of two states to have both an inheritance tax and an estate tax, Miller suggested that lawmakers should consider eliminating one or the other.

In any case, both voiced support for at least raising Maryland’s estate tax threshold to $5 million, which is more in line with the federal threshold for paying the tax.  Currently, estates of more than $1 million are taxed in Maryland, while the threshold for federal estate taxes is $5.25 million.

In addition, the 2014 session promises to revisit some controversial issues of years past. Pit bull liability, "fracking," and school construction funding will provide for lively committee debate. Education funding, particularly as it relates to universal pre-kindergarten, should also be a topic to watch during this year's session. Every Democratic gubernatorial candidate has made this topic a campaign priority and the manner in which universal pre-kindergarten is funded may draw considerable debate.

Another issue that may be revisited this year is the legalization of marijuana. After last year's bill to decriminalize small amounts of marijuana passed in the Senate but died in the House, it is not unfathomable that a similar effort would be put forth this year. The nascent experience in Colorado of legalizing and taxing marijuana for recreational purposes only stokes this debate further.

The so-called “rain tax,” the issue that generated the most discussion during the interim, will also be back for the 2014 session. A bill to repeal the stormwater fee legislation passed by the General Assembly in 2012 is already pre-filed in both the Senate and the House.

The stormwater fee law, which mandates Maryland’s 10 most-populous jurisdictions to implement fees to pay for cleanup of Bay pollution caused by runoff from impervious surfaces, has fueled considerable debate at state and local government levels.

Multiple approaches are expected to be proposed in Annapolis this session including an outright repeal, a delay in implementation, and minor changes to address some egregious situations impacting not for profits, universities and religious institutions. The battle ground appears to be the House of Delegates where a strong environmental coalition exists that may thwart efforts for significant change to the law.

While these matters will certainly require attention, the Greater Baltimore Committee urges lawmakers to not lose sight of the many policy actions needed in order to continue to help Maryland fully realize its potential for economic growth and job creation.

As detailed in the recent GBC report "A Compact for Competitiveness," business leaders from across the state agree that the key to Maryland's continued economic recovery lies in the ability of government leaders and the business community to work together to enable the state to better compete for business growth and the job creation that comes with it.

Creating and/or supporting outcome-based state financing programs in emerging industry sectors, continuing to invest in a highly-trained workforce, containing the cost of doing business, and incentivizing business partnerships in a full range of infrastructure development projects are just a few ways in which Maryland's legislators can help ensure that our state is even more competitive in the new economy.

Meanwhile, a special private-sector commission formed by the GBC has begun working to develop a comprehensive tax restructuring proposal to make our state more competitive.

The 2014 session will not likely be dominated by controversial, passionate issues as in recent sessions, such as same-sex marriage and immigration legislation. However, the end of the legislative session in conjunction with the June primaries for this fall's gubernatorial and legislative elections creates a compressed election cycle, essentially making the session de facto campaign time.

This dynamic could create a contentious session with many members of the General Assembly jockeying for other elected offices or reacting to challenges being directed from within or outside their own political party. 

Unfortunately, the level of campaign-related grandstanding and finger-pointing that is expected this session could potentially outweigh public policy advancement.

Let’s hope that policymakers can ultimately stay focused. Governor O’Malley said it succinctly on Wednesday when asked what he thinks is the most important issue to Maryland’s future.

His answer? “Getting the economy to grow.”

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.  

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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.


Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.


Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.


Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.


Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.