Legislative fortune teller sees tax hikes and spending cuts in our future

By Len Lazarick
Len@MarylandReporter.com

The no-growth budget for next year that legislative leaders recommended Thursday, combined with a promise of no new taxes, might soon look like a relic of the good old days if a new report from the Department of Legislative Services proves accurate. In a section of a new 246-page study of the issues facing the legislative session that begins in three weeks, budget analyst David Juppe forecasts “structural deficits” of at least $2 billion in each of the next five years. “Achieving long-term balance must involve a combination of revenue and spending actions,” Juppe says. (page 9)

Translation: You can’t balance future budgets without both tax hikes and spending cuts. Tapping the $600 million Rainy Day Fund may be needed as well — something he speculates the administration might try to do in the coming year.

Business and labor argue over unemployment insurance changes

Andy Rosen
Andy@MarylandReporter.com

There was little agreement between business and labor groups about unemployment insurance on Thursday as Gov. Martin O’Malley’s staff laid out his legislative plan for revamping it in 2010. At a meeting of the Joint Committee on Unemployment Insurance Oversight, business at the table roundly rejected O’Malley’s proposed reforms, calling them too costly in the long run and complaining that the plans don’t do enough to help small businesses who are struggling with rising unemployment taxes. Joe Bryce, O’Malley’s legislative director, argued that the plans would make the state eligible for nearly $127 million in federal stimulus dollars that depend on the passage of reform. He pledged $83 million of that to help businesses that have been hit with rising costs as unemployment has grown, depleting the state’s unemployment fund and triggering tax increases. Next year, businesses will see the minimum unemployment tax rate more than triple, from $51 to $187 per employee.

Governor, other officials should get pay raises, panel says

By Len Lazarick
Len@MarylandReporter.com

The governor Maryland voters elect next year should get a $5,000 pay raise in 2013 and 2014, bringing the salary up to $160,000, the Governor’s Salary Commission unanimously recommended Tuesday night. The seven-member commission also recommended similar 3.3 percent and 3.2 percent pay increases for the lieutenant governor, the attorney general, the comptroller and the state treasurer, bringing their salaries to $133,333 in the final year of the next four-year term. The commissioners said they had a long discussion of the state’s tough financial situation at their first meeting Friday night. “The question [was] whether it was really appropriate to go nine years without an increase,” said State Treasurer Nancy Kopp, an ex-officio member of the commission who did not vote on her own salary. “The artificial freezing was a concern.”

The governor’s salary has been $150,000 since 2006, when the General Assembly rejected the recommendation that it be raised $5,000 a year to $170,000 in 2010.

DeVore tells Joint Audit Committee he’s been fixing problems

By Megan Poinski
Megan@MarylandReporter.com

Outgoing Juvenile Services Secretary Donald DeVore told the legislature’s Joint Audit Committee Tuesday that when he received the findings of a scathing audit that exposed a host of large problems with record-keeping, financial management, contracts, monitoring and personnel in his department, he didn’t get defensive. Instead, DeVore got to work. “I convened weekly meetings with my staff to see that every issue was rectified by the 21st of November,” DeVore said. “We are in fact correcting the problems they identified, and we wanted to make sure the measures we were taking were the correct ones.”

At Tuesday’s hearing, Legislative Auditor Bruce Myers said that Juvenile Services staff has met with the audit team and had a continuing dialogue to ensure that things in the department get fixed. The audit report, released in October, detailed several oversight and administrative problems in the way that the department was run.

Pension commission delays decisions – but is told it can’t reduce COLAs

By Len Lazarick
Len@MarylandReporter.com

The commission examining changes to state retirement benefits put off any decisions until at least next week, but staff on Monday told the members that they couldn’t alter employee cost-of-living adjustments (COLAs) – one of the largest areas for potential savings. Freezing or capping COLAs for current and future retirees for five to 15 years was one scenario suggested to the Public Employees’ and Retirees’ Benefit Sustainability Commission. But Michael Rubinstein, a legislative analyst staffing the commission, told the commission that “simply from a legal question that approach is not viable.”

Both the assistant attorney general for the State Retirement and Pension System and the general counsel to the General Assembly said, “You cannot change the COLAs for current retirees” or for those active workers who had already earned benefits, Rubinstein said. Like Social Security beneficiaries, state retirees did not see increases in their pension checks this year because the cost of living did not go up. There seemed to be growing consensus on the eight-member commission that health benefits for current workers and retirees need to be changed.

Medical benefits administration needs better controls to protect against fraud, audit finds

By Megan Poinski
Megan@MarylandReporter.com

Widespread lack of accountability may have led to millions of dollars wasted by the Medical Care Programs Administration of the Department of Health and Mental Hygiene, an audit released Monday found. The medical administration spent $6.8 billion to provide low-income residents with health care benefits like Medicaid in the last fiscal year. The General Assembly’s Joint Audit Committee will review the audit this afternoon (Tuesday). The Office of Legislative Audits found 14 places where the program administration could improve its controls to ensure that money is spent correctly and to keep employees and others from defrauding the agency.  Auditors did not identify any potential fraud, but Legislative Auditor Bruce Myers said that the agency needs to make some changes. “I think there are some big issues that need to be addressed, especially because the agency handles so much money,” Myers said.

State government uses Facebook to “friend” Marylanders

By Megan Poinski
Megan@MarylandReporter.com

Several Maryland state government agencies are discovering that there’s a lot to “like” on Facebook. The social networking site, which boasts more than 500 million users worldwide, is free; offers an easy way to share information, videos and pictures; and is becoming a social necessity for anyone with a computer. About a year ago, Department of Human Resources Communications Director Nancy Lineman started to see possibilities for her agency on Facebook. She created a page for the department to share news, pictures, videos and events.  Today, 454 people “like” the Maryland Department of Human Resources, and receive constant updates from the agency on their Facebook homepages. “The reason we started doing it is that a lot of 20- to 55-year-olds are using this connection,” Lineman said.

Teachers’ union criticizes pension commission process as rushed, “offensive”

By Len Lazarick
Len@MarylandReporter.com

The executive director of the state teachers’ union said the process being used by the commission considering changes to state pensions was “offensive,” rushed, and lacked both details and consultation with affected employees. “The whole discussion has been how are we going to cut costs,” David Helfman, executive director of the Maryland State Education Association, told reporters Thursday at a briefing. “There’s no indication that it’s being done in good faith.”

Casper Taylor Jr., the former House of Delegates speaker who heads the commission, denied most of Helfman’s complaints. “I think we’ve been very consultative,” Taylor said. “We have had a complete actuarial analysis.”

Even though the commission only started meeting in October, he said, “I’ve had no pressure” to finish the work of the commission.

Report gives Maryland a D+ in transparency on business subsidies

By Megan Poinski
Megan@MarylandReporter.com

Despite the commitment of Gov. Martin O’Malley’s administration to increase government transparency, Maryland received a D+ in transparency of economic subsidy information, according to a national report released on Wednesday. The report, which was put together by a government accountability work group, Good Jobs First, took a look at information made available to the public online for different economic development programs run by the 50 states and Washington, D.C. The report ranked Maryland 18th in the nation for transparency of its economic development programs – close to the middle, since only 37 states have any sort of disclosure for these programs. Out of a possible 100 points, the state received an average score of 30 for transparency. The report pointed out that Maryland has some of the nation’s best online transparency – namely reports posted on StateStat and the state’s comprehensive stimulus spending tracker. But it also has programs that are extremely lacking. Of the five programs the study examined – Enterprise Zone Real Property Tax Credits, the Job Creation Tax Credit, Maryland Economic Development Assistance Authority Fund (MEDAAF), One Maryland Tax Credit, and the Sunny Day Fund – no records were available online for the Enterprise Zone and One Maryland tax credits.

Analysis: Five-and-dime tax talk

The families of the developmentally disabled have been making a compelling case for what has seemed impossible. They want to raise the alcohol taxes that haven’t been touched in decades in order to fund services to more than 40,000 people in Maryland who are retarded, autistic, and brain-injured.

More than 2,000 people have attended eight town meetings across the state, and dozens have put a human face on the disabled needing services, many in wheelchairs.