ROCKVILLE, MD  (February 2, 2015) — The Maryland Public Policy Institute today unveiled four policy recommendations that would enable the Hogan Administration to save Marylanders billions of dollars. The reforms cover a range of public policy areas, including public pensions, transportation spending, and Chesapeake Bay cleanup efforts. The full synopsis can be found at this link.

“We believe state government can do a better job spending the citizens’ hard-earned money,” said Christopher B. Summers, president of the Institute.  “These reforms would save taxpayers billions of dollars while maintaining, and even improving, overall quality of life in Maryland.   These common sense reforms have no party label.  They simply shape Maryland’s future for the better.”

The report’s recommendations include:

• Index state retirement funds:  Every year, Maryland pays Wall Street money managers to oversee the massive public employee retirement fund.  In 2012 for example, Maryland paid these managers nearly $250 million in fees to administer the $40 billion fund.  In return, the fund has consistently underperformed market medians. Last year alone, these subpar returns caused the state to earn $1.16 billion less than it should have.  By indexing state retirement funds, the pension system could save up to $250 million in management fees per year and ensure median market performance for the system’s beneficiaries. The Institute’s full report on indexing public pensions can be found at this link.
  
  

• Reform transportation spending:  Maryland will spend about $4.3 billion over the next five years on transportation projects. The Institute has many recommendations to improve transportation spending. One idea is for Maryland to follow the same path as Virginia by hiring independent auditors to review the state transportation agency’s financing.  In Virginia, the audits discovered approximately a billion dollars of unspent funds in various accounts.  The Institute’s full report on reforming transportation spending can be found at this link.
  
  

• Grow Baltimore City’s tax base: The City of Baltimore gets $1.2 billion in aid annually from state government.  To help the City reduce its reliance on state aid, the Institute recommends implementing a “cash on delivery” plan that would lock in a competitive property tax rate over four years.  Enhanced revenue as a result of friendlier property tax would be placed in escrow and allow the City to cover any budget gap arising from the rate cut’s effect on property tax receipts.  Buffeted by a more vibrant economy and stronger revenue base, the City would over time become less reliant on aid from state taxpayers.  The Institute’s full report can be found at this link.   
  
  

• Reform Bay cleanup efforts:  Maryland is poised to spend upwards of $14 billion over the next 10 years to meet the Environmental Protection Agency’s pollution goals, but the State has no plan to address one of the Bay’s biggest sources of pollution: the Conowingo Dam on the Susquehanna River.  Dredging the Dam of 86 years’ worth of environmentally harmful sediment would achieve far greater gains per dollar than many current programs, while also creating hundreds of “green collar” jobs. The Institute’s full report on dredging the Conowingo can be found at this link.

About the Maryland Public Policy Institute: Founded in 2001, the Maryland Public Policy Institute is a nonpartisan public policy research and education organization that focuses on state policy issues. The Institute’s mission is to formulate and promote public policies at all levels of government based on principles of free enterprise, limited government, and civil society.  Learn more at www.mdpolicy.org.

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