Public policy frameworks and implementation

¶ … public policies in Maryland that have had a direct impact on county and local governments. Though not entirely unique to the "Free State" there has been a fair share of budget borrowing in Maryland, or as some legislators and others call it, "pillaging." Which is to say the governor has "borrowed" from the coffers of one fund to bail out the coffers of other funds -- in effect digging one budget hole for the state while temporarily filling in another hole somewhere else in the budget.

Gasoline Tax Money Siphoned Away From Local Governments

According to an op-ed article published in Maryland's Daily Times -- and reprinted in the Maryland Public Policy Institute -- Governor Martin O'Malley has been borrowing from gasoline tax funds to help "balance" the state budget (Kilmer, 2010, p. 1). What this means for Wicomico County is that it is only getting "ten percent" of the allocation it should be receiving, for example. The county like all counties has infrastructure problems -- roads need fixing and bridges need to be shored up -- but when Wicomico County only receives ten percent of its rightful allocation, those roads and bridges will just have to wait another year or more for repairs.

Kilmer believes that since the Governor without fanfare just took / borrowed millions from the "Highway User Revenue" (HUR) fund to help fill in the shortfall in the state coffers, he could also usurp "local income tax revenue." That money and the gas tax (HUR) money "rightly belongs to county governments," according to Kilmer. "It's not state money." The fiscal crisis that counties in Maryland now face means they will either have to cut services or raise taxes, and the mood in the country is most certainly not leaning towards higher taxes in a time of severe economic recession.

Kilmer, a senior fellow at the Maryland Public Policy Institute, calls the governor's act of dipping into HUR funds for his own purposes at the state level nothing more than a "budget trick" designed to "avoid making tough choices" (p. 1). The governor may be able to say that he is balancing the budget, but in fact "…it just shifts the burden to taxpayers at the county level," Kilmer continued (p. 2).

Meanwhile in the Columbia Patch February 13, 2011 edition, writer David Saleh Rauf writes that O'Malley's plan to "transfer $100 million from a fund dedicated for building roads and bridges" is receiving a "strong backlash" while some lawmakers say it is not all that bad. Republican leaders in Annapolis "have taken turns blasting O'Malley for 'raiding' the Transportation Trust fund" to help replace the shortfall in the state budget, according to Rauf.

It is also true that other governors in the past have tapped into highway / gas tax funds to close budget shortfalls. But for O'Malley, he is also proposing the transfer of "millions" from other dedicated funds -- including funds designed for restoration of Chesapeake Bay -- to make it appear that the state budget shortages aren't as bad as they seem (Rauf).

The Maryland Public Policy Institute (MPPI) publishes a review of the work of the state legislature every year. In "The Annapolis Report" -- a review of the 2010 legislative session -- the MPPI explains that due to the governor taking funds from the HUR all the counties' share and the Baltimore City share will be "significantly reduced" (MPPI). In fact the counties' share will "have been all but eliminated" the MPPI continues, quoting from an article in the Washington Post that asserts "…counties will have to contend with almost no 'highway user' revenue."

Moreover, through 2015, the Post is quoted suggesting that Maryland counties "will have to make due with less than 10% of the hundreds of millions they have typically received each year over the last two decades" (MPPI, p. 9). The actual dollar amount that the counties and Baltimore City will lose due to this dipping into funds by the governor is around $400 million, the MPPI explains.

Included in O'Malley's budget moves -- the legal term for the Maryland state budget is BRFA, e.g., Budget Reconciliation and Financing Act -- is another "loan" from another fund in Maryland that was not intended to shore up the state budget. That fund is the state's Bay Restoration Fund; the governor's plan is to take $200 million from the Bay Restoration Fund and put it into the general fund.

What was the Bay Restoration Fund supposed to do? The MPPI says that the main money from this fund is supposed to pay for upgrades to the state's wastewater treatment plants. Better wastewater treatment plants means that less toxic material from sewage plants will be dumped into Chesapeake Bay. In fact the taxes that are paid by users of wastewater treatment plants are now going into the state general budget rather than going for what it was supposed to be used for, upgrading sewage treatment plants.