MARC KORMAN
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LATEST NEWS

Governor's Budget

1/26/2016

 
Like most of you, I have spent much of the last few days sheltered inside, shoveling snow, and trying to eat all the food we purchased before the storm.  I hope you and your family stayed safe and warm during the storm and that you have withstood any unfortunate plowing delays.  It seems like a long time ago now, but before the blizzard a smaller storm caused great disruption to the evening commute because of a lack of preparation.  Like many, I was stuck in dangerous traffic for hours.  I have reached out to the State Highway Administration regarding the event in the hopes that the agency can perform better in the future.  You can read my letter here.
Administration News

The big news this past week was the Governor's submission of the budget.  For the first time in about ten years, the budget outlook is not entirely bleak thanks to a (slowly) recovering economy.  The state is projected to conclude the current fiscal year with a surplus and also achieve a surplus next year.  These projections are not static, of course, and conditions may change.  Many will claim credit for this stable budget outlook.  But recall at the end of the last legislative session the Governor and his staff complained that the budget the legislature passed was going to lead the state to fiscal ruin.  Those partisan complaints--coming after the Governor's Budget Secretary originally lauded us for the same budget--were obviously overblown.

Here are a few highlights from the budget proposal:
  • The $20 million school construction grant passed last year for districts with a high rate of enrollment growth--such as Montgomery County--was included with the budget on top of the standard $280 million allocation.  This is great news for Montgomery County.
  • Operating funds for schools were, as required by law, fully funded.  You may recall that last year the Governor declined to fund the Geographic Cost of Education Index ("GCEI"), which benefits Montgomery County.  After the Governor's failure to act last year the legislature made the program mandatory and it was included this year.  Interestingly, under the state's education formulas all jurisdictions will see increases in state aide for education this year except the city of Baltimore.
  • Tuition at our institutions of higher education is expected to rise by 2%.
  • The Governor has proposed the elimination of 657 unspecified positions in state government.
  • Montgomery County will receive $931.7 million in direct state aide for operating expenses (which excludes funding for capital projects such as school construction, funds for the Metro, and funding for programs the County significantly benefits from such as the biotech tax credit.

As a member of the Appropriations Committee, I will spend the next several months conducting a detailed review of the budget.  The legislature will make some alterations where appropriate within the constitutional confines we work within (we cannot increase funding to a budget line item).  More broadly, significant questions will need to be addressed such as whether the small surpluses should be used for ongoing tax cuts (which will have costs far into the future after the surpluses are spent) and whether various mandated spending formulas should be altered.

Legislative News

Sidewalk closures are a frustration in areas with development such as downtown Bethesda or the Pike District (White Flint).  My first bill of the session would conform sidewalk closures along state roads to the current rules for County roads.  The rules require that a public notice be posted with contact information for the responsible party and the expected length of the closure.  Frankly, I would like to see more effort be made to avoid sidewalk closures entirely in our walkable communities.  New York City is able to demolish and rebuild skyscrapers while barely closing sidewalks, yet the slightest project seems to lead to a prolonged closure in our communities.  We even had a circumstance last year where a business was entirely cut off for the weekend--with no advance notice--by a state approved sidewalk closure.  I am pleased to be working with Senator Brian Feldman on this bill, which was first suggested to us by Councilman Roger Berliner.  The bill will have a public hearing on February 4th before the Environment and Transportation Committee.
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Last year, I had legislation related to energy storage, the concept of using batteries or other technology to store energy produced at non-peak times for later usage including for baseload power and to help utilities improve grid efficiency.  Storage is particularly useful when paired with renewable energy sources.  The committee of jurisdiction asked the Maryland Energy Administration to study the issue instead of moving the legislation.  The study was recently released and was the subject of a committee briefing last week.

The study surveys energy storage technology and public policies put forth in other states.  I am hopeful we can continue the conversation in Maryland and move forward with a policy that encourages the use of this technology here.
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The Economic Development and Business Climate Commission (better known as the Augustine Commission) issued its second report.

Last year, the Augustine Commission's first report included a number of useful suggestions that became law that streamlined our state's approach to economic development and put a premium on customer service by state agencies.  This year's report left me somewhat disappointed.  To be sure, there are some valuable insights in the report including proposed enhancements to work my seatmate Delegate Frick has been doing on how we treat tax credits in the state.  But the report also includes specific proposals for almost $2 billion in tax cuts that was unsupported and a vague proposal for future income tax cuts.  The level of analysis supporting these proposals in my view is significantly lacking.  For example, the report proposes cutting the corporate income tax rate from 8.25% to 7%, a $176 million annual reduction in state revenue.  But no analysis is provided as to what effect this will actually have on drawing businesses here.  First, few businesses pay the headline top rate (indeed, many Maryland businesses are not organized as corporations at all).  Second, the report notes that many nearby states would still have a lower corporate tax rate, so if a businesses criteria for location is the corporate tax rate, this proposal is completely insufficient to improve the economic climate while causing serious harm to state revenue used to pay for priorities such as education.  Similarly, the report proposes an $80 million annual change to the interest rate for tax deficiencies but provides absolutely no analysis or even anecdotal evidence that the interest rate causes any business to choose not to locate or grow in Maryland.  I agree that Maryland can and should improve its economic climate, but I look forward to a vigorous debate on these particular recommendations.

Community News
  • On January 28, Park and Planning will be hosting a community meeting regarding the Rock Spring Master Plan.  The event will be from 7pm to 9pm at Walter Johnson High School.  Details about the Rock Spring Master Plan can be found here.
  • On February 1, Delegate and candidate for the Eighth Congressional District Ana Sol Gutierrez will be the guest speaker at the Bethesda Chevy Chase Democratic Breakfast Club.  The Club meets at 7:30am at the Original Pancake House in Bethesda.
  • On February 1, Montgomery County Park and Planning will be hosting a forum on the White Flint 2 Sector Plan.  The event will be held from 7pm to 9pm at Luxmanor Elementary School, 6201 Tilden Lane in Rockville.
  • Save the Date for the District 16 Democratic Club debate for 8th Congressional District Democratic Primary candidates at Walt Whitman High School.  The event will be held on Sunday, February 28 from 3pm to 5pm.  
  • On March 5 and 6, Walter Johnson High School is holding a used book sale.
  • On March 12 and 13, BCC High School is holding its annual used book sale.  As a personal aside, I have been to this book sale in the past and found many great items.
If you know of an upcoming community event, please email marc@marckorman.com.

​District 16 Notes
  • Students at BCC High School were recently profiled in the Washington Post for their activism, including working to protect trees.  
  • Congratulations to District 16 residents Jonathan Breul and Dan Dozier on their forthcoming appointment and reappointment, respectively, to the County's Water Quality Advisory Group.
  • Condolences to the family of Scott Orbach.  Scott was a Bethesda business owner and active Democrat who passed away suddenly.

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