A Doomsday Session

Marc Kilmer Apr 11, 2012

The legislative session of the General Assembly has adjourned without passing a package of tax increases to fund the state’s increased spending. Some call this a “doomsday budget,” but others call it a victory (if only temporary) for taxpayers. Whatever your opinion, the bungled end of the legislative session is fitting conclusion to a dreadful three months of legislative activity. Here are some lowlights (with one highlight at the end):

Limiting rural development: Lawmakers from outside Maryland’s urban core spoke about a “war on rural Maryland” this session. That may have been a little hyperbole, but given what happened in the General Assembly, it’s easy to see why they think it. The septic system limits imposed by legislators will severely hinder the ability of rural areas to allow development. It will be more expensive for those looking to locate in more rural parts of the state, discouraging people from moving there. One bright spot for rural areas is a somewhat expanded exemption for farms from the estate tax. It would have been better if everyone, not just a limited class of farmland owners, would have benefited from this tax break, but it’s a good start to ending this tax on death.

Limiting local spending control: Passage of the maintenance of effort legislation ensures that county governments will have far less say in spending decisions than they did in the past. The state has mandated a certain floor for county education spending and counties have little to no leeway in challenging that floor. Since education spending is generally the largest single item in a county’s budget, this legislation places a straitjacket on county legislators during their budget processes. It also removes any way for county government to impose accountability on local boards of education. These boards will receive funding regardless of how well they are spending it, thanks to the state law. And if your county has a tax or revenue cap, state law says that is now irrelevant. That cap can now be overridden if the money goes to the board of education.

Discouraging natural gas drilling: Parts of western Maryland have a huge potential for natural gas drilling. The Marcellus Shale formation runs under that region; this is the same shale formation that is producing significant amounts of natural gas in Pennsylvania and is pumping billions of dollars into that state’s economy. There is controversy about the safety of a method used to generate natural gas. Some claim that it hurts local water supplies. Those claims have been repeatedly disproven. But Maryland lawmakers passed a law establishing a “presumptive impact area” around a natural gas drilling site where any water contamination is presumed to be caused by drilling. If gas drilling contaminates water, the drillers should pay. But any contamination near drilling should be proven, not presumed. This is one more reason why it’s highly unlikely our state won’t see any shale gas drilling. That also means that our state won’t see the jobs and tax revenue such drilling will bring.

The budget: While the governor and lawmakers decry the budget as “doomsday,” it’s hard to see how any budget that increases spending by $500 million over last year’s level gives cause for such apocalyptic rhetoric. Legislators through their own bungling failed to impose onerous new taxes on Marylanders. State spending won’t go up as much as they desired. That’s not doomsday, that’s simply fiscal responsibility. I’m sure that the failure to raise taxes will be rectified in a special session, but it’s nice to bask in this temporary victory for fiscal conservatism.