Common Sense About Disincentive

From Daniel Hannan , MEP –

It’s a funny thing… but if you start taxing countries for doing the right thing, in order to pay countries who are doing the wrong thing, you’re going to end up fewer of the former and more of the latter.

When will politicians ever learn?  The best way to incentivize an economy is to leave it alone.  Neither crony capitalism nor socialism will ever triumph over a truly free market.

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O’Malley Budget Without Tax Hikes

We’ve heard it all before.  Maryland Gov. Martin O’Malley is claiming that his last budget will forego tax hikes and reduce the overall size of state government.  Does anyone, including the sycophantic media carrying O’Malley’s water, really believe it?

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Who’ll Stop the Rain Tax?

A press release from the Craig – Haddaway-Riccio campaign:

Harford County Executive and Maryland candidate for Governor David R. Craig released today an economic impact analysis of the so-called rain tax which soaks a typical business that depends on parking lots, roofs and other impervious surfaces with thousands of dollars in fees.  Illustrating the haphazard approach under the new Maryland law, a family-owned General Motors dealership used as a case study in the analysis would be required to pay anywhere from one penny in an outer suburban county to $12,000 per year in Baltimore City.

“If you wanted to open a business with a parking lot, would you want to come to Maryland and figure out this new tax?" asked Craig. “It is easier in our small state for many businesses to simply locate in Delaware, Pennsylvania or Virginia.”

The law, formally known as the “Stormwater Management – Watershed Protection and Restoration Program,” stems from the Obama Administration’s EPA mandate to reduce run off into the Chesapeake Bay.  The O’Malley-Brown Administration signed the measure into law in 2012 with an estimated fiscal impact projected to be a staggering $14.8 billion.  It is the costliest documented stormwater fee regime in the nation that the campaign could determine.   The first stormwater fees were implemented in some jurisdictions across the country beginning in the mid 1970’s to help meet federal Clean Water Act requirements.

Baltimore City alone estimates it will collect $24 million from the rain tax per year. Baltimore, which already has the state’s highest property and individual income taxes, leads the state in taxpayer exodus according to the latest Internal Revenue Service data.
“Baltimore City is sealing its own fate like Detroit – a downward spiral caused by raising taxes and fees on a shrinking base,” said Craig. “Baltimore especially can ill-afford to saddle residents and businesses with the highest rain tax in the state; it will only circle the financial drain that much faster.”

Craig will hold a press conference on the rain tax on Tuesday, September 17 at Boyle Buick and GMC Truck in Abingdon.   The announcement coincides with a scheduled visit to Maryland from Texas Gov. Rick Perry who is waging a media attack on the state’s business climate under the O’Malley-Brown Administration and a nascent grassroots secessionist movement in western Maryland that is likewise gaining media attention.

The O’Malley-Brown Administration has increased taxes, fees and tolls 40 times that remove an additional $3.1 billion out of the economy per year. 

“There is a pattern here,” said Craig. “There is a growing class of ‘forgotten Marylanders’ – people who are left behind from all walks of life and from every part of our state who are required to pay record amounts of taxes, fees and tolls to support radical political rulers who no longer represent them.”

Only in the Once Free State does the government tax the rain.  What’s next?

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The Dunn / Day Era in Salisbury?

SALISBURY, MD – Is Salisbury returning to the fiscal disaster experienced under the now infamous “Dream Team”?  Only time will tell, but it appears that the huge sums thrown at the Jacob Day campaign by national real estate interests may be starting to pay off certain special interests.

A letter to the editor in this morning’s Daily Times by Chamber of Commerce president (and real estate developer) Brad Gillis outline the benefits already starting to flow to real estate developers … and promises more to come:

Together, the Chamber and the city successfully collaborated and amended the city’s paving policy. This legislation, Resolution 1312, gave greater discretion to the Department of Public Works and its professional engineers, thus creating a quality process and end product for both the developers and the citizens of Salisbury.

We were also successful in amending the city’s policy that required the warranty and maintenance of new infrastructure to be bonded for five years; no other cities researched required a five-year bond.

Without further delay, it’s time to act on another community win: an equivalent dwelling unit incentive zone.

We support the city moving forward with this Incentive Zone, which would create a bank of credits to be used for the development of the downtown area and enterprise zones.

Having this tool will enhance the pro-business climate in our great city without costing the citizens a single dollar. Salisbury’s comprehensive plan calls for high-density growth in our downtown area; this is the time and the place to create such banks.

Approving this incentive zone will send a message to local, regional and national builders and developers: “Downtown Salisbury is primed for both commercial and mixed use developments.”

The “Incentive Zone” of which Gillis speaks is designed to subsidize residential developers, not attract employers.  While Gillis applauds these subsidies (not surprising since he directly benefits), there is no mention of the across the board pay hikes proposed by his ally Mr. Day.  These, and other spending hikes, will ultimately result in tax increases on the citizens and businesses of Salisbury.

Does Mr. Gillis believe that tax hikes will attract business?  Of course not.  These “incentives” are not pro-business; they are simply a little league version of crony capitalism.  As Salisbury goes back to “giving away the store”, who benefits?  The very people who spent tens of thousands of dollars to elect their champion – Jacob Day.

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Should Salisbury Taxpayers Pay More for City Services?

SALISBURY, MD – It appears that Salisbury City Council president Jake Day and councilwoman Shanie Shields want taxpayers to pay more for city services.  According to the Daily Times’ Jeremy Cox, Day and Shields are pushing the Ireton administration to move forward with a plan to increase the city’s payroll by approximately $750,000 per year.  This 8.5% increase is based on a study performed by Evergreen Solutions, LLC.

Day wants to quickly move forward in raising the city’s payroll:

“Anything we consider implementing we should implement it quickly for sure,” Day said during a council work session. “We value our people like any organization, and want to compensate them fairly and bring the best here and keep the best here.”

Given that Day has repeatedly claimed that he is opposed to raising taxes beyond constant yield, voters should ask how he plans to pay for this raise.

Councilwoman Terry Cohen asked about the possibility of merit based raises.  According to Evergreen, city workers are opposed to pay raises based on merit.  This is not surprising given that government employees are not used to being paid based on performance.

Taxpayers may be interested to know that Wicomico County continues to suffer one of the highest unemployment rates in Maryland.  Given that there are numerous persons standing in line to fill any position left by a disaffected city employee, why should raises be given at this point in time?

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Will New Council Rubber Stamp Ireton FY 2014 Budget Folly?

We’re Glad Jim Ireton Isn’t a Math Teacher

The newly elected Salisbury city council is on its way to adopting a budget for FY 2014.  Included is a tax rate hike of nearly 8% coupled with a DROP in water and sewer rates.  One thing that appears to be missing is mayor Jim Ireton’s promised “storm water authority”, now laughingly referred to across the country as the “Rain Tax”.

Newly minted council president Jake Day is backpedaling on his campaign commitment not to support a tax hike.  He now claims that he won’t support a tax hike above constant yield.  We’ll give him that one (on style) since the net affect of the rate increase should be revenue neutral.  We wonder if the people who stayed home at the last election will be as forgiving since a sizable number of them will see their taxes rise?

The section of Ireton’s proposed budget that disturbs us most is a cut in the water and sewer rates.  WHAT?  A self-identified conservative is against a cut in government fees (water and sewer fees are not really a tax)?  Sorry to disappoint, but … YES!

Here’s the problem.  Salisbury is showing a sizable surplus in its Water and Sewer Enterprise Fund.  HOWEVER, Salisbury is having to PAY TWICE for its failed waste water treatment plant (WWTP).  By cutting rates now, the city will have to raise them that much more in the future.  The problem is simple.  Ireton hopes to justify future general fund tax hikes because he’s decreased the water and sewer rates.  Given that Ireton makes Barack Obama look like a Reaganite, he just can’t sit idly by and watch tens of millions sit unspent, even if it is in Salisbury’s best interest.  That money needs to be SPENT!  Sadly for Ireton, he can’t spend water and sewer money for every fly by night leftist scheme that comes down the pike, even if he thinks that Jake Day will rubber stamp Ireton’s every whim. (The jury is still out on Day, we all know that Laura Mitchell and Shanie Shields will rubber stamp all sorts of craziness.)

[Read more…]

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Is Jake Day Breaking Promises Already?

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Jake Day Elected Council President

Ireton, Shields Sworn in for New Terms

SALISBURY, MD – Newcomer Jake Day, along with incumbent Shanie Shields, were sworn-in to the Salisbury city council Monday night.  In a surprise move, Day was also elected as council president.  Councilwoman Laura Mitchell was elected vice president.

Mayor Jim Ireton was also sworn in to a second term.  The terms of Ireton and all five council members will end in November 2015 as the city adopts a new election cycle.

At the end of the meeting Ireton delivered his FY 2014 budget to the council.  In his budget Ireton calls for a $0.065 rate increase.

photos courtesy of Jeremy Cox via Twitter

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Pollitt, Board of Ed Confuse Public Hearing with NPR

SALISBURY, MD – As Wicomico County homeowners again face an increase in their property tax rates, County Executive Rick Pollitt held a “public hearing” on his soon-to-be-released FY 2014 county budget.  It should be noted that no real budget detail was provided for citizens to comment on.

Rather than unveil his budget, Pollitt and the Wicomico County Board of Education used the event to call for more spending on Education.  While I came late to the event it appears that little was missed.  When I asked two individuals after the event if I missed anything of substance, the responses were nearly identical – “If you heard one teacher speak, then you pretty much heard the whole thing.”

I recognize that Pollitt again faces tough budget decisions.  However, repeated acts of political theater do not solve problems.  While the Daily Times is giving prominent coverage to Delmarva Public Radio’s current “begathon”, Pollitt needs to realize that public hearings are not supposed to be begathons.  They require information for open citizen input.  Given that this event was held without providing that information (like his proposed budget), there is no point other than to politicize an already volatile issue.

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Can Marylanders Afford Martin O’Malley’s National Ambitions?

Billions in spending increases.  Billions in tax hikes.  Same-sex marriage.  Repeal of the death penalty.  “Green energy” subsidized by taxpayers.  A state with already limited gun rights transformed into one of the most restrictive states in the nation.  These are just a few examples of Martin O’Malley’s political “accomplishments”.

When O’Malley first ran for governor he was hailed as a “moderate” and “pragmatist”.  Kennedyesque – more John than Teddy.  O’Malley wouldn’t touch issues such a gay marriage or more restrictive gun control with a ten foot pole.

While he never hid his disdain for the death penalty, he attributed this to his Roman Catholic faith.  I sympathize.  I too am opposed to the death penalty – because of my pro-life beliefs.  Sadly, O’Malley doesn’t allow the Church’s teachings to interfere with Democrat orthodoxy.

What happened?  Barack Hussein Obama.  In 2008 the Democrat party abandoned the center-left compromise which delivered two terms to Bill Clinton.  National Democrats became more radical than in 1972.  O’Malley, who has never hid his personal ambition and has always demonstrated fluid political and moral compasses, moved farther to the left.

[Read more…]

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Is “Lockbox” Amendment a Fraud?

ANNAPOLIS, MD – Next year voters will have a chance to amend Maryland’s constitution to place gas tax funds in a “lockbox”.  The stated purpose of the amendment is to prevent a future raid on highway user funds like those that occurred with regularity during Maryland governor Martin O’Malley’s two terms in office.

While the amendment’s stated purpose may seem noble, and sound policy for Maryland taxpayers, some legislators are questioning whether or not the proposal is real, or little more than political theater.  The amendment would require a 60% vote of both houses to raid the highway user fund.  However, each time in recent years this has occurred it was accomplished by a vote of greater than 60%:

House Minority Leader Tony O’Donnell objected, “Every time we raid the Transportation Trust Fund, it meets the three-fifths vote” in both houses.

Even here on the Eastern Shore we’re not exempt.  While legislators like Del. Norm Conway (D-38B) and Sen. Jim Mathias (D-38) don’t mind coming home to tell constituents that they voted against bills like the recent gas tax hike, they also haven’t hesitated to vote in favor of raiding the highway user fund.

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DelMarVa Dealings – Where the Libs Go to Get Their Dough

Much is being made about a possible 2014 match between incumbent Maryland senator Jim Mathias (D-38) and Del. Mike McDermott (R-38B).  While McDermott would have to overcome Mathias’ huge money advantage (Senate President Mike Miller will THROW hundreds of thousands of dollars Mathias’ way), a Mathias vs. McDermott race will show the unfathomable divide between “Annapolis Values” vs. “Eastern Shore Values”.

Listen to McDermott on the recently passed budget bill:

While I am a fan of Public Radio Delmarva (actually WSDL), I don’t support Maryland tax dollars going to support it.  While I actually believe that SU needs a new library, I can’t imagine where $135 million is going.  What about all of that money in the SU foundation?  Why can’t it go to help build and equip a new library?

If you attended the recent town hall on Gov. O’Malley’s gun bill you would have witnessed a stark contrast in approaches.  McDermott has FOUGHT this bill from the start.  Mathias just voted against it (I would suggest for political reasons).  You would have seen and heard the passion McDermott brings to this issue.  While Mathias wasn’t in attendance, he sent an envoy to read a letter.  The categorical difference was apparent to all – McDermott was fighting to protect one of our most sacred liberties while Mathias was tinkering around the edges to make a loathsome bill slightly less loathsome.

As a political junkie, I think a Mathias – McDermott race in 2014 will be exciting.  As a citizen of Maryland, I believe that a McDermott candidacy and victory will send a message to those here and in Annapolis who believe that giving up our God-given liberty in pursuit of a few cups from the public trough is a worthwhile pursuit.

DelMarVa Dealings appears each Monday and discusses local politics and its impact on the Delmarva peninsula.

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Businesses Object to Stormwater Fees

BALTIMORE, MD – While Eastern Shore property owners brace for the news of how much they will be forced to pay, business owners and non-profits on the Western Shore of Maryland are already complaining about the new stormwater fees they will be charged starting July 1.  Fees for homeowners are running from $18 to more than $100 per year.  Businesses and non-profits estimate that their charges could be more than $10,000 per year in some cases.  Because this is classified as a fee rather than a tax, non-profit organizations are not exempt.

On Tuesday, newly re-elected Salisbury mayor Jim Ireton is presenting his plan for improving downtown Salisbury.  He is not expected to unveil the fee structure.  Businesses question whether or not investment in Salisbury is cost-effective given that lower tax Delaware and Virginia are just a few miles to the north and south.

In Baltimore and other counties, businesses are being charged this fee even if they treat their own stormwater:

David C. McKenzie, vice president of Liquid Transfer Terminals Inc. in Curtis Bay, said his company pays about $58,000 in property taxes and could get hit with nearly $44,000 in stormwater fees. That fee is too high, McKenzie argues, because his company treats its own stormwater.

"A facility that manages its own stormwater is not treated any differently than a facility that does nothing to mitigate its stormwater pollution," he said.

One Baltimore business, Rukert Terminals Corp., estimates that its fee could be in excess of $300,000 per year.

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Bad Economic Lessons – It Must Be Budget Time in Maryland

The state of Maryland has just passed a $37 billion budget, chock full of the expected tax hikes and wasteful spending.  Wicomico County Executive Rick Pollitt will unveil his proposed budget on Thursday during his annual dog and pony show at the Wicomico Youth and Civic Center.  We can expect a proposed $0.07 rate hike.  In a lead up to this, Wicomico School’s superintendent John Fredericksen provides an op-ed in today’s Daily Times which again proves that someone with so little understanding of basic economic principles should not be in charge of so much money.

Public schools are important to a community on multiple levels.  The perception of high quality schools impacts whether or not a county or city is a desirable place to call home.  That same perception can even impact whether or not businesses choose to locate in an area.  It is a widely held belief that quality public schools impact an area’s crime rate.  There is also the moral argument, which is probably the strongest of all, that we owe our next generation a decent education.

Yet, Fredericksen makes none of these arguments.  Instead he tells us that Wicomico County’s public schools are an “economic engine” which grows our local economy.  While I realize that none of Fredericksen’s degrees are in something as practical as finance or economics, that does not excuse ignorance about something so basic.  I would be happy to suggest several easy reads which might get him up to speed.

Fredericksen’s argument is equivalent to Nancy Pelosi’s laughable statement that unemployment benefits are an economic development tool.  Government spending, whether on education, unemployment benefit, or food stamps is a transfer of wealth – NOT a creator of wealth.  In the case of state or local spending, where the government cannot run a deficit, this is even more so.  Money taken from individuals and businesses for government spending could be put to better use by those individuals or businesses.  It could be invested in new plant or equipment.  It can create jobs through the CREATION of wealth rather than through its transfer.

Does this mean that public schools are bad?  No.  We, as a civilized society, have decided that funding public education is something we need to do.  Unfortunately, people like Fredericksen attempt to equate spending ON education with quality OF education.  Unfortunately people like Fredericksen want you to believe that the spending, in and of itself, is the net benefit to our community.

It’s little wonder that Wicomico taxpayers have such little respect for Fredericksen or the system he is charged with running.  That’s the real shame.

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The Observer – The Truth About Austerity … Everywhere But the U. S.

It seems that simple, basic economic truth is coming home to roost in the European socialist utopia.  It’s already occurred in Canada.  Why can’t our own politicians grasp the obvious?

In a study released Friday at the annual conference of the Royal Economics Society, economists Luca Agnello and  Vitor Castro of Italy and Ricardo Sousa of Portugal tracked austerity programs from 1978 – 2009.  They found that the best programs shoot for the greatest deficit reductions in the 2nd and 3rd years of a program.  They also show empirical data that opposition mounts to austerity programs lasting more than nine years.

Yet, here in the United States, our politicians are unwilling to make real cuts to government spending or to reform entitlement spending.  Don’t expect too much media coverage of this study; it violates the current political narrative too much to receive serious consideration.  Among the common sense findings:

  • Reducing public spending lowered deficits more than raising taxes
  • Trading nations are usually more successful at restoring their public finances
  • Low interest rates and “sound macro-economic” conditions improve the odds of financial consolidations
  • Spending cuts are typically deepest in the second and third years of austerity programs before rising again in the final years

IMAGINE – Reducing Spending is MORE EFFECTIVE than Raising Taxes!  I wonder what Barack Obama’s reaction would be if he was actually made aware of this study?

Lord Keynes gets a bad rap these days.  If he had lived to see the mess that was made from his General Theory he would be ashamed to see what the term “Keynesian economics” has come to mean.  Rationalism reigns.  Liberal politicians and economists tell us that if you spend X the economy will improve.  After spending X, we don’t see the desired result.  What is the left’s answer?  We didn’t spend enough! (don’t worry, Paul Krugman didn’t receive his Nobel Prize for spouting this macroeconomic drivel)

Common sense has fallen to men and women who fancy themselves gods.  While this statement may seem extreme, it is fact.  Omniscience and omnipresence are required to “manage” a national economy.  That’s either Adam Smith’s “invisible hand” or a god.  Since most of these folks don’t believe in either Smith or God …

H/T – D. J. McGuire @ Bearing Drift

The Observer appears on weekends in the DelMarVa Observer and provides commentary on a variety of issues.

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Amended Gambling Bill Moves Forward in Maryland House

ANNAPOLIS, MD – The House Ways and Means committee approved an amended version of Maryland governor Martin O’Malley’s gambling legislation Monday night.  It is expected that the bill will be debated and voted on in the House of Delegates today.

The committee amended O’Malley’s legislation to provide greater tax cuts for Anne Arundel County’s Maryland LIVE! casino.  Under the legislation, Maryland LIVE! would see its tax rate on net gambling revenues drop from 67% to 51%.  The rate could drop to 49% if an independent commission agrees.  A proposed casino in Baltimore would see its tax rate drop to 54%.  The Hollywood Casino in Perryville would only see a drop to 62% if the commission agrees.

Del. Jon Cardin (D-11) added language which would prohibit political contributions from “gambling entities”, including limited liability companies (LLC’s).  Contributions or expenditures over $10,000 to influence ballot initiatives would also have to be disclosed.

READ MORE …

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Virginia vs. Maryland … Again

According to the Daily Record:

Maryland lost 4.71 percent, or 6,494, of its small businesses from 2007 to 2010, a decrease that one fiscal policy group chalks up to the state’s tax increases.

The difference between the tax policies, and the flight of capital and jobs, was recently highlighted on the Fox Business Channel:

A key statistic – Virginia ranks as the 7th best place to do business.  Maryland?  40th.  While both states depend heavily on federal dollars, Virginia actively courts business – small and large.  Maryland actively drives businesses away.

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Virginia Finishes FY 2012 with Surplus

RICHMOND, VA – Gov. Bob McDonnell has announced that Virginia will finish fiscal year 2012 with a $129.2 million surplus.  This is the third year in a row that the Commonwealth has finished in the black.  FY 2011 ended with a $544.8 million surplus.  FY 2010 had $403 million of revenues in excess of expenses.

Source – Richmond Times-Dispatch

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Democrats Threaten to Plunge Nation Back Into Recession with Tax Hike

WASHINGTON – The Congressional Democrat leadership has announced that it is willing to “go over the fiscal cliff” if their GOP colleagues do not agree to raise taxes on the nation’s job creators (business owners and investors).

Democrats are making increasingly explicit threats about their willingness to let nearly $600 billion worth of tax hikes and spending cuts take effect in January unless Republicans drop their opposition to higher taxes for the nation’s wealthiest households.

Emboldened by signs that GOP resistance to new taxes may be weakening, senior Democrats say they are prepared to weather a fiscal event that could plunge the nation back into recession if the new year arrives without an acceptable compromise.

READ MORE …

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Wealthy Marylanders Migrating for Reasons Other than Weather

ANNAPOLIS, MD – First Maryland LOST tax revenue thanks to a “millionaire surtax”.  Now recently enacted changes in the state’s tax code are causing more Marylanders to “vote with their feet” and seek residency in lower tax states.

Change Maryland has released a new report outlining recent declines in the state’s tax base.  One thing is clear, wealthy Marylanders are leaving the state for less expensive (if not greener) pastures in low tax states such as Florida.

Maryland’s tax migration has made national news as financial news channel CNBC has publicized the report.

 

Thanks to Julie Brewington @ Right Coast Conservative for the CNBC link.

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O’Malley – Prince of the Sound Bite

Maryland governor Martin O’Malley can’t run a state.  He never saw a tax hike that he didn’t love.  If it wasn’t for the largesse of China (for their willingness to buy US sovereign debt) and the federal taxpayer, O’Malley would be governing one of the poorer states in the Union rather than one of the wealthiest.  Martin O’Malley would be a pauper, rather than a prince.  Martin O’Malley does have one trait that has served him well … he is a prince of the sound bite.

Appearing on ABC’s This Week, O’Malley (following the Obama party line) accused presumptive GOP nominee Mitt Romney of “betting against America”:

“I’ve never known a Swiss bank account to build an American bridge, a Swiss bank account to create American jobs or Swiss bank accounts to build the levies to protect the people of New Orleans,” O’Malley said on ABC News’s “This Week.”

Granted, Romney should be shot for having the poor political acumen to have a Swiss bank account.  At least Romney doesn’t lack the requisite economic and financial skills to lead a country out of the Great Recession.

Even O’Malley should know that we live in a global financial market.  Swiss bank accounts do, in fact, create jobs.  They even build bridges.  As for the levies in New Orleans, money was available to build adequate levies but O’Malley’s corrupt Democrat pals used those funds to finance projects like marinas and sundry other projects where a better rake-off could be had.

photo courtesy of the Associated Press via the Washington Post

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Ollinger Has Solution to Save Taxpayers $11 Million

SALISBURY, MD – 2010 Wicomico County Executive candidate Joe Ollinger has proposed saving Wicomico, and Maryland, taxpayers approximately $11 million in the construction of a new James M. Bennett Middle School.  In a letter to the editor in today’s Daily Times, Ollinger argues that the county council should demand that the state allow the school to be built under a “competitive wage” rule rather than the normal “prevailing union wage” rule.

Will the state allow this?  Of course not!  However, Ollinger’s suggestion is feasible and the county council should demand that the state support it AND that incumbent County Executive Rick Pollitt endorse it.  Taxpayers have a right to know that that their tax dollars are being used to line the pockets of BIG LABOR.

Here is the text of Ollinger’s letter:

If the state of Virginia built a similarly designed school as Wicomico County’s proposed new Bennett Middle School, it would cost $11 million less than what we will pay in Maryland. Why? Virginia pays a "competitive wage" rate for such projects, while our state government mandates a much higher rate, called "union prevailing wage."

Therefore, we Wicomico County taxpayers have the privilege of forking over $73 million for the new BMS rather than $62 million.

The Wicomico County Council, for the benefit of its citizens, should courageously lead an effort to waive this "union prevailing wage" rate requirement for the BMS project. In pursuit of this waiver, it should rally support from our county executive and our Eastern Shore state delegation.

Governors, such as Chris Christie of New Jersey and Scott Walker of Wisconsin, have caught the attention of the entire nation with their successful battles with unions in lowering their states’ costs. Maybe our County Council, by fighting for this waiver, might ignite a statewide movement to stand against the unreasonable costly demands of unions.

Even if our council fails in this effort, it will expose to voters those elected state representatives who are more interested in wastefully pandering to unions rather than lowering the cost of government for their constituents.

Joe Ollinger
Salisbury

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The Good, The Bad, and The Ugly of Wicomico County’s Budget

Yesterday the Wicomico County Council passed County Executive Rick Pollitt’s FY 2013 operating budget.  While Wicomico continues to endure one of the highest unemployment rates in Maryland, citizens and businesses alike will face higher taxes; placing even greater difficulty on those struggling to keep their homes and adding one more impediment to to a business sitting on the bubble as to whether or not to hire new employees.

For the first time since adopting a county executive form of government, the Wicomico council passed a budget without cutting one red cent from the Executive’s proposed budget.  Several council members (we choose not to embarrass them by giving their names) have actually argued that not one dollar of Pollitt’s $117 million budget is being wasted.  While I’m not aware of anyone claiming that Pollitt’s budget is a cesspool of profligacy and corruption, failing to acknowledge that some spending is wasteful or unnecessary forever surrenders any claim to fiscal conservatism on the part of these council members.  To add insult to the injury of a tax hike, six of the council’s members when on a frenetic spending spree last Wednesday, adding an additional $600,000 to the county’s budget.

THE GOOD

Unless you happen to be a county employee, there’s not much good to be said.  Prior to submitting his budget, Pollitt had already agreed to a 2% pay increase for the county’s deputies.  He also eliminated furloughs for all county employees.  Not to be outdone in the area of spending other people’s money, a majority of council members tacked on a 2% increase in pay for all other county employees.  “FAIRNESS” seems to have replaced “It’s for the children” as the excuse du jour for spending taxpayer dollars.

Yes, the Board of Education got a little more money than they received last year.  Contrary to popular opinion, I am not one of those who seems to believe that ten cents spent on public education is ten cents too much.  However, I do believe that the Board of Education continues to spend money on items that are questionable at best.  That should not be confused with a belief that the BOE throws millions of dollars into the fiscal dust bin.

I am also confident that State’s Attorney Matt Maciarello is pleased with this budget.  He requested some additional funds and received them during the council’s “feeding frenzy”.  Not all of the funds disbursed last Wednesday were bad calls.  It was the mouth foaming zeal in which council members spent other people’s money that was most disturbing.

THE BAD

[Read more…]

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Easton Council Passes Budget

EASTON, MD – The Easton Town Council passed a $17 million budget for FY 2013 Tuesday without any change in tax rates.

In a 4-0 vote, with Councilman Pete Lesher absent, the council passed the about $17 million budget that is about 8 percent less than last fiscal year’s budget. That decrease is mostly from a change in the method of accounting depreciation, Easton Mayor Robert C. Willey explained at a public hearing last month on the proposal.

That $17 million includes about a $2.6 million capital fund with at least two carryover projects at about $1.7 million transferring from the general fund. The town still faces sizable expenses in the next few years, such as $1.5 million for a new fire truck, about $500,000 for radio upgrades and about $1.2 million for road repairs at two places in town.

For the last fiscal year, however, the town finished several capital projects, including the Tanyard Branch stormwater project and handicap projects at several intersections. The upcoming fiscal year budget includes money for sidewalk extensions along Dutchmans Lane, with crosswalks planned at U.S. Route 50.

READ MORE …

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Wicomico Council Approves Budget

SALISBURY, MD – By a 5-2 vote, the Wicomico County Council approved the FY 2013 operating budget.  Council president Joe Holloway and councilwoman Sheree Sample-Hughes were the two dissenting votes.

As part of adopting the FY 2013 budget, council also increased the county’s real property tax rate 9.28% to $0.8404.  The personal property tax rate, which businesses pay on equipment, fixtures and inventory was increased to $2.101.  The tax hikes passed by a 6-1 vote, with Joe Holloway being the only dissenting vote.  Councilwoman Gail Bartkovich blamed recent action by the state legislature for forcing the council to adopt a property tax rate hike of this size.  Sample-Hughes argued that Annapolis’ action was necessitated by council’s previous refusal to raise taxes to pay for needed education and infrastructure expenditures.

While Holloway and Sample-Hughes seldom agree, both cited the revenue estimates provided by County Executive Rick Pollitt as their primary reason for voting against the budget.  Both questioned the accuracy of Pollitt’s revenue projections given the “finding” of additional income tax revenue to pay for the county’s share of the teacher pension shift and the approximately $600,000 in new spending the council adopted last Wednesday.  Sources within Pollitt’s administration indicate that council was not given an accurate revenue projection for FY 2013 and that other revenues were available but the amounts hidden from council and the public.  During public comment Pollitt argued that one reason the county had successfully weathered the recent economic downturn was by conservatively projecting revenues.

The council members supporting the budget cited restoring county furloughs and further increasing the wages of county employees as a motivating factor in their support.  Councilman Bob Culver noted that the county’s employee’s had “given up a lot” during the last three years.

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Wicomico Council to Vote on Budget

SALISBURY, MD – The Wicomico County Council is scheduled to meet at 10 AM this morning to adopt the county’s 2013 operating budget.  As reported last week, the council will vote on a budget significantly higher than that originally submitted by County Executive Rick Pollitt.  On May 25th Pollitt submitted an amended budget which included $2.2 million for the newly mandated teacher pension shift.  Last Wednesday the council requested that Pollitt further amend his budget to include a 2% pay increase for all county employees (in addition to the elimination of furloughs and a 2% increase for Sheriff’s deputies), a raise for the county auditor, and additional positions in the State’s Attorney’s office.

Wicomico taxpayers will face be paying an increased income tax rate (the highest in the state) and a $0.0714 increase in the county’s real property tax rate.  Businesses will also face a $0.1785 increase in the county’s personal property tax rate.

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Where Is Jim Ireton’s Budget Veto?

SALISBURY, MD – The Daily Times has published multiple times that Salisbury mayor Jim Ireton would veto the budget passed by the Salisbury City Council.  Yet, a press release issued by City Clerk Kim Nichols states that the amended budget passed by the council is law.  What happened?

The answer is simple.  A veto would have resulted in one of two things:

  • The mayor’s veto would have been overridden.  or …
  • The city would have no budget.

Allowing the city to enter FY 2013 would be the height of irresponsibility.  Ireton should be applauded for not allowing the baser side of his nature to get the better of him.  Allowing the city government to shut down due to hubris would have been unthinkable.

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Wicomico Teachers’ Union Demands Money That CANNOT Be Appropriated

SALISBURY, MD – After spending thousands (or tens of thousands) of dollars in an attempt to garner public support for $38.7 million Wicomico County tax dollars being funneled to the Board of Education (WCBOE), members and allies of the Wicomico County Education Association (WCEA) marched down Glen Avenue last night and demanded that the Wicomico County Council appropriate $2 million in excess of County Executive Rick Pollitt’s proposed FY 2013 budget.  After disrupting the beginning of the council’s meeting and heckling speakers who opposed more funds for the WCBOE, supporters of the additional $2 million – Pollitt’s budget already contained funding that was $500,000 above maintenance of effort (MOE) – begged, pleaded, cried (literally) and threatened council members.  In the end, it was all for naught.  Even IF a majority of the council wanted to appropriate the funds, the county’s charter prohibits them from doing so.

Why?  Well, if anyone deserves blame it would fall on the WCBOE.  Their initial budget request which was submitted to the County Executive did not include the additional $2 million.  The county’s charter does not permit council to increase spending on ANY line in the budget submitted by Pollitt.  They can only cut spending.  State law, which trumps the county’s charter, does allow the council to increase funding, but ONLY to the extent that a county executive has cut the budget request of the local board of education.  Pollitt did not cut the WCBOE’s submitted budget.  Therefore, council CANNOT increase spending.

This begs a question.  Is Dave White, president of the WCEA, incompetent?  The union’s leadership?  Or … was last night’s piece of political theater designed merely as a prelude to the 2014 elections and an attempt to return to the spendthrift policies which led to the implementation of Wicomico County’s revenue cap?

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Kent County Commissioners to Hold Public Hearing on Budget Tonight

CHESTERTOWN, MD – The Kent County Commissioners will hold their public hearing tonight on the FY 2013 budget at 6:30 PM in the Commissioners Meeting Room of the Kent County Government Center, 400 High Street in Chestertown.  Prior to their public hearing, the commissioners will hold their regular meeting at 6:00 PM.

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Wicomico Budget Hearing Tonight

SALISBURY, MD – The Wicomico County Council will hold hearings tonight on the county’s proposed FY 2013 budget as well as on the county’s real property tax rate.  The hearings will begin at 6:30 PM, while the council’s meeting will begin at 6:00 PM.  The meeting will be held in the Midway room of the Wicomico County Youth and Civic Center.

Because of recently implemented state law, county council has no real input on the tax rate unless it plans to pass a rate higher than that allowed under the county’s charter.

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Moving to Virginia?

Larry Hogan, chairman of Change Maryland and possible 2014 gubernatorial candidate, has an interesting article over at Reason.com.  Hogan outlines the steady exodus of Maryland-based businesses from the Once Free State to points north, south, and west – particularly to Virginia.  Thanks to the policies of O’Malley administration, along with increases in the state’s income tax rates, this exodus includes small businesses as well as large.

READ MORE …

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Salisbury Budget Showdown Begins

SALISBURY, MD – To the casual observer, the Salisbury budget process has been moving forward for over a month.  In reality, what has taken place up to today has been the equivalent of an “opening act”.  The real showdown begins tonight when the Salisbury City Council passes the FY 2013 budget.

Salisbury mayor Jim Ireton, who “governs” by press conference and denouncement of the council majority, has been hinting since the introduction of his budget that he would veto ANY change to his proposed budget.  Ireton is in for a BIG surprise.  Unlike last year, when he could veto the council-passed budget because it contained no tax hikes (see above photo), Ireton now finds himself between a rock and hard place.  Cut from his proposed budget are raises for his staff, along with other reductions in the Mayor’s spending requests.  Also gone is his proposed tax hike.

Ireton could, in theory, veto the council’s budget.  However, if he does so the city’s budget would not be in balance – a violation of the city’s charter.  Fortunately for the city’s taxpayers, Ireton cannot unilaterally implement a tax rate increase.  He can veto the ordinance setting the rate, along with the budget ordinance, but his budget cannot be implemented over the council’s objection because he included a hike in the city’s real property tax rate.

To date, Ireton has refused to meet with the council and negotiate in good faith.  Instead he attempted to ride in at the eleventh hour and demanded a meeting just before the holiday weekend.  For those that enjoy political theater, this week should prove amusing as Ireton attempts to spin the actions of a fiscally responsible council majority to his favor.

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Talbot County Approves Budget

EASTON, MD – The Talbot County Council has approved the county’s FY 2013 budget.  By a vote of 3- 2, the council approved a $69.7 million operating budget which includes increases to the county’s real property and income tax rates.

The county’s property tax rate will rise to $0.491, up from the current $0.448 per $100.  This increase includes a $0.026 “educational supplement” to cover state-mandated “maintenance of effort” (MOE) to the county’s schools.  This increase is in excess of the county’s revenue cap, but is permitted under newly passed state legislation.  The county’s income tax rate will increase from 2.25% to 2.4%.

Council members Laura Price and Tom Duncan voted against the budget.  Both members had submitted amendments to the budget.  Price’s amendment would have increased revenue without raising the income tax rate.  Duncan’s amendment would have increased revenues without raising property tax rates beyond what was permitted under the cap.

Prior to adopting the budget, amendments were passed which restored funding to county fire companies, animal control, tourism, and economic development.  Cuts to the county’s volunteer fire companies had been loudly decried by the public at the council’s public hearings on the budget.

photo courtesy of the Star Democrat

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Sussex County – 23 Years Without Property Tax Rate Increase

GEORGETOWN, DE – Sussex County unveiled a $121.1 million proposed budget for FY 2013 Tuesday.  For the 23rd consecutive year the county has completed its budget without proposing an increase in the county’s real property tax rate.

Included in the budget is a $0.035 tax credit (incorrectly called a rebate in some reports) for the coming fiscal year.  Under the plan taxpayers whose taxes are current will receive a credit against their current tax bill.  This amounts to a 7.8% decrease in  the effective tax rate.

Because Delaware has independent school districts, the county budget does not include the cost of public schools.

READ MORE …

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Somerset County To Keep Tax Rate Level

PRINCESS ANNE, MD – The Somerset County Commissioners will not raise property taxes this year, according to the county’s finance director.  The Daily TimesLiz Holland reports that the county will offer a FY 2013 budget of approximately $35.8 million.

By holding the current real property rate level at $0.8837, the county will have approximately $1.25 million less revenue in FY 2013 than in 2012.  The county will also have to budget for $480,124 in teacher pension costs.  To help offset those costs, Somerset County will receive $381,799 from the state.

The County Commissioners will hold a public hearing tonight at 7 PM at the county office complex in Princess Anne.

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Pollitt “Withdraws” Waiver Request

SALISBURY, MD – In a press release Wicomico County Executive Rick Pollitt has announced that he is withdrawing the county’s request for a maintenance of effort (MOE) waiver from the state Board of Education:

May 21, 2012 — Salisbury, MD Wicomico County Executive Richard M. Pollitt, Jr., announced today that he has notified the Maryland State Board of Education that he is withdrawing the county’s application for a waiver of the Maintenance of Effort (MOE) standard for funding public education for Fiscal Year 2013.  Pollitt was to attend a hearing scheduled for tomorrow in Baltimore to appeal to the State Board but the withdrawal negates that presentation.

In a letter to the State Board, Pollitt said, “Having our MOE standard re-based under the terms of the State legislation, I am now able to proceed with my original budget to the Wicomico County Council. That budget provides the full amount originally requested by our local Board of Education, not only achieving MOE but adding more than $500,000 in new funding, as well.”

The Daily Times has transcribed Pollitt’s press release, plus a few minor factual errors, in today’s edition.

Unfortunately, this announcement is just spin.  While it is true that the waiver request was no longer necessary, it was also nothing but a PR exercise.  The request was DOA when Wicomico County Board of Education and the local teachers’ union rejected the request.  Without their support, the state board was not going to grant the request.

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MoCo Liberals Don’t Mind Spending Other People’s Money

ANNAPOLIS, MD – Montgomery County boasts one of the most liberal legislative delegations in Maryland.  That’s saying something given the the overall complexion of Maryland’s General Assembly.  They have always been ready to vote in favor of spending other folk’s money; but when MoCo gets hit it’s time to vote like a conservative.

That is what happened this week when four members of the MoCo delegation jumped the party line and opposed both the tax hike AND the pension shift.  Because Montgomery County has the highest income in the state, its citizens will get hit hardest by the O’Malley income tax hike.  With the teacher pension shift, MoCo is also get hit the hardest – to the tune of $27 million.

READ MORE …

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Daily Times Endorses Tax Hikes … Again

I’ve lost count.  Literally.  I’ve lost count how many times Salisbury’s daily newspaper has applauded Maryland governor Martin O’Malley and a majority of the General Assembly for hiking taxes on Marylanders.  It’s little wonder that its readers become “former readers”.  Between biased reporting and an editorial slant that is polls apart from a majority of area citizens, one shouldn’t be surprised.

Personally, I enjoy a vigorous debate.  However, I also demand that debate to be based on reason.  Again, the Daily Times fails miserably.

The DT’s editors applaud tax hikes on the very people that are most able to migrate to lower cost states.  Did they learn nothing from the revenue LOSS which occurred from an earlier tax on high earners?  As an additional excuse for supporting higher taxes they use a phantom “liability” on Wicomico County:

The more important issues were contained in a different, but related bill that shifts a portion of the funding for public school teachers’ pensions from the state to the counties where they are employed, and more importantly for Wicomico residents, it relieves the county of an additional $14 million maintenance of effort funding liability for its fiscal year 2013 budget.

That additional $14 million was NEVER going to happen.  Even Wicomico County Administrator Wayne Strausburg admitted that the county would simply allow the state to take its income tax revenue.  The Wicomico County Board of Ed would have received roughly the same amount of money that they will receive under County Executive Rick Pollitt’s proposed budget.

To add insult to injury, the editors attack legislative opponents of the tax hike:

Less hot air and more attention to business could have accomplished the same result within the constraints of the regular 90-day session.

We beg to differ.  It is the liberals in Annapolis, and their lap dogs in the mainstream media (like the Daily Times), who are full of hot air.  It is these people who dismiss $700 million in additional spending and speak of “cuts”.

The reality is that it is the left that uses the politics of fear with impunity.  Why shouldn’t they?  The media applauds them for it.

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Maryland Senate (Partially) Bails Out Wicomico County

ANNAPOLIS, MD – By a vote of 33 – 13, the Maryland Senate has passed SB 1301, the Budget Reconciliation and Financing Act of 2012.  If the bill passes the House today Wicomico taxpayers can breath a partial sigh of relief.

The maintenance of effort (MOE) reset is gone.  Taxpayers don’t have to worry about coming up with $14 million extra this year.  Of course, they never really had to worry about it anyway.  The option to let the BOE keep the county’s $36 million in income tax revenue remained the most cost effective option.

While Wicomico County Executive Rick Pollitt will claim that the legislature followed through with all of their promises, that is not quite true.  Pollitt stated that the pension reset would not come out of the county’s budget.  Technically this is true, however the bill requires that counties now must meet MOE plus the cost of pensions.  For Wicomico this amounts to $2.17 million for FY 2013.  The state is providing a disparity grant of $1.57 million, but the county’s taxpayers will still need to fund an additional $603,756 for this coming year.  The legislation also requires that the county will have to fund:

[Read more…]

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MSOP – Wicomico Budget Presentation

SALISBURY, MD – Tuesday evening I had the honor of speaking to a meeting of the Wicomico chapter of the Maryland Society of Patriots.  The topic was the FY 2013 Wicomico County budget.  Almost every seat was taken and attendees included members of the legislature as well as several local elected officials, past and present.

With one screen to go in my presentation, the battery on my laptop died.  I promised several folks there that I would post a link to download a copy of Rick Pollitt’s proposed FY 2013 budget for Wicomico County.

The focus of Tuesday’s presentation was twofold:  the end of Wicomico County’s revenue cap and the fact that Pollitt’s budget is premised on a fiction.  Under current state law Wicomico taxpayers are on the hook for an additional $14.4 million in education spending (above the amount appropriated last year).  Pollitt’s budget ignores this fact and instead claims that a bail-out from Annapolis is “in the bag”.  While Annapolis may provide some relief from SB 848, it is unlikely that Wicomico County will be held harmless while other counties that failed to meet maintenance of effort (MOE) last year are forced to raise taxes and cut spending in other areas to fund their own schools.  Voters should also be careful to look out for any representation by Pollitt that MOE is set at FY 2013 levels when only a temporary reprieve is given.

While the sad duty of being a pessimist fell to me, Del. Mike McDermott provided some hope to the assembled faithful.  One attendee asked if going to rallies, like the one planned for Monday in Annapolis, actually had an impact.  McDermott responded that we need only look to recent events in Indiana and North Carolina to see that like minded individuals, organized around a core set of values, can have a huge impact.

McDermott is right.  His remarks reminded me of an anecdote from Virginia.  When former congressman Stan Parris passed away a few years ago a friend sent me his obituary.  In the obit it stated that when Stan was sworn-in to the Virginia House of Delegates in January, 1970 he was one of nine (9) Republican delegates.  It had only been a few years that Republicans were even allowed to sit on committees in the legislature.  Twenty five (25) years later, the GOP controlled the Governor’s mansion and both houses of the General Assembly.  Marylanders need to remember; the Once Free State did not become a socialist paradise overnight.  We won’t return to being the Free State overnight either.

To see a copy of the PowerPoint used in presentation, click HERE.

Download budget HERE.

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Meeting on Wicomico Budget Tonight

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Princess Anne Residents Want Cake

PRINCESS ANNE, MD – If the Princess Anne Town Commissioners adopt a new real property tax rate of $1.12 two things will have happened:

  1. Princess Anne will have the highest municipal tax rate in the state of Maryland. (as reported by Liz Holland in the Daily Times)
  2. The property tax bill of the average citizen will not rise 1 cent.

This is the problem facing county and municipal governments across the state.  Citizens want to have their cake and eat it too.

As someone who has attended countless budget work sessions and public hearings over the years, two issues always comes to the surface – citizens want their tax rates to fall as assessments rise, but don’t want their rates to rise if assessments fall; and very few citizens offer suggestions for specific cuts to permit towns and counties to operate on less.

All governments, large or small, waste money.  However, without specific suggestions to cut those costs, it’s simply not possible to provide the same level of services for less money.  Calls to “cut the waste” are meaningless.  If taxpayers want to oppose higher tax rates, they need to give specific examples of that waste … or pay a tax rate that provides their local government with at least the same amount of money as it received last year.

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Meeting to Discuss Wicomico Budget

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Will the “Doomsday Session” Bail Out Rick Pollitt and Wicomico County?

In seven days the Maryland General Assembly will meet for a special session – some are calling it the “Doomsday Session”.  The primary purpose of this session is to raise taxes.  It seems that Maryland Democrats and special interest groups such as AFSCME and teachers union think that spending $700 million more than last year just isn’t enough.  If lots of teachers and other public employees aren’t paid enough to pay their union dues then the little children, the poor, and the infirm will all suffer mightily.

But … there’s another reason for this session; at least if you live in Wicomico County.  After the legislature adopted SB 848 and left Wicomico with a huge increase in its maintenance of effort (MOE), County Executive Rick Pollitt has based his entire budget on the premise that his pals in the legislature will hold Wicomico County harmless and set the county’s MOE at the level spent in FY 2012.  This includes the expected teacher pension shift.  Pollitt claims that this burden will be placed on the schools’ budget and not on the county.  Will the General Assembly do that?

For the sake of Wicomico taxpayers I hope so.  However, I have concerns about such a move.  It would be inherently unfair and it’s doubtful that the state legislature will ride to Wicomico County’s defense after complaining for years about the county’s revenue cap and its unwillingness to appropriate what the state considers adequate funding for county schools.

Other Eastern Shore counties such as Talbot and Kent counties are tying themselves in knots trying to meet their MOE obligations.  To add insult to injury, these counties pay a much higher percentage of their schools’ total costs than do Wicomico.  Talbot taxpayers pay approximately 58% of their schools’ operating budget.  Kent County pays over 58%.  Worcester pays over 73%.  Wicomico?  This year Wicomico paid only 21.5% of the cost of its schools’ operating budget.

Talbot County has a real property tax cap almost identical to Wicomico County’s.  This year they are planning to break that cap because of the required additional spending placed on them by Annapolis.  In addition, the Talbot County Council is forward thinking enough to appropriate for school pensions in anticipation of that being enacted in special session.

Kent County is seeking a waiver of its MOE obligation, which is being opposed by its board of education.  Wicomico is also seeking a waiver but both its BOE and teachers’ union have rejected the application.  Translation – NO WAIVER.

Again, should Wicomico County be bailed out while other Shore counties are left to their own devices?

Assuming Pollitt’s predictions come true, there is another question that must be asked – What back room promises has Pollitt made to legislators to get his bail out?

EXTORTION

[Read more…]

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Meeting to Discuss Wicomico Budget

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It’s Official – Higher Taxes Session to Begin May 14th

ANNAPOLIS, MD – After weeks of conjecture Maryland governor Martin O’Malley has called a special session of the state legislature to begin on May 14th.

“There is too much at stake not to move forward,” O’Malley said in a statement. “I’m confident that we can come together with the Senate President and House Speaker to complete the most important work for the people of our State.”

The special session is being called to raise taxes so that additional spending may be implemented.  The regular session closed with the so-called “doomsday budget”.  Although the budget actually spends $700 million more than they FY 2012 budget, O’Malley and Democrats in the legislature assert that this budget actually represents cuts.

House Minority Leader Tony O’Donnell vowed that an anti-tax voice will be heard in the special session:

“I believe the citizens of Maryland — whether they’re Republicans or Democrats or independents — they’re on our side. I sense it. I feel it. I know it,” O’Donnell said.

Photo courtesy of the Annapolis Capital

READ MORE …

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Special Session in the Works?

ANNAPOLIS, MD – News abounded yesterday on the blogosphere, Twitter, and Facebook that Maryland governor Martin O’Malley had called a special session of the Maryland General Assembly to increase taxes and avoid the so-called “Doomsday Budget” which spends ONLY $700 million more than last year.  House Speaker Michael Busch and Senate President Mike Miller have both told the press that they expect a session the week of May 14th.

While some politicians and special interest groups are touting the session as a done deal, both the Baltimore Sun and the Washington Post are hedging their bets and reporting that “progress is being made”.

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Wicomico County Council Receives “Budget” from County Executive

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Wicomico_FY2013_BudgetCoverSALISBURY, MD – After granting a two week delay to County Executive Rick Pollitt, the Wicomico County Council was presented with a budget Tuesday night.  Some council members and members of the public question whether Pollitt has met his obligation however.

The budget which Pollitt presented is based on certain assumptions:

  1. A 9.28% increase in the county’s real property tax rate to $0.8404
  2. An already enacted increase in the county’s income tax rate to the state permitted maximum rate of 3.2%.
  3. That the Governor will call a special session of the state legislature.
  4. That the legislature will enact legislation holding Wicomico County harmless from the MOE mandates of SB848.

If the legislature does not act as Pollitt claims they will the county is faced with either spending an additional $14.4 million on the Wicomico County Board of Education (WCBOE) than last year or forfeiting the county’s anticipated $36 million in income tax revenue directly to the WCBOE.

All budgets are based on assumptions.  However, Pollitt’s assumptions are not only projections of revenue or expenses.  Instead, Pollitt’s entire budget is based on the assumption that Annapolis will act, and act in the way he has represented to the council.

To quote Pollitt’s budget presentation:

Immediately, Governor O’Malley and the leaders of the State Senate and House of Delegates speculated that there would soon follow a special session of the Legislature to enact the BRFA bills. That position was strengthened a week ago when, following a meeting of those same individuals, it became all but certain that a special session would be called the week of May 14, 2012. Confident that Wicomico County’s MOE issue will be resolved to ow satisfaction at that time, I can present the attached budget proposal believing that by the time Council is called upon for decisions, all will be in order.

However, not to be content only with our faith in the legislative process, we have also applied for a waiver of the MOE standard of funding from the State Board of Education, trusting that, if necessary, we shall prevail on that body to recognize the extreme hardship to our County represented by the current finding obligation. Our local educational community must support this waiver in order to prevail. That support has been slow to materialize but I am convinced that, if the legislative process fails us, our school community will not be so myopic and rash as to allow our county to plummet in all other areas of services, especially those that deal with public safety. Ideally, the BRFA amendment will pass, our MOE base will be set to what is fair and was the standard at the time, and we will be able to withdraw our request for the waiver.

A week before Pollitt presented this budget to council, the WCBOE rejected the county’s waiver application.  The county’s teacher union has also rejected the application.  This all but assures rejection of the waiver application from the state board of education.  The WCBOE has indicated that they may be willing to discuss a waiver IF the county agrees to $2+ million in funding ABOVE what Pollitt presented to council.

The council begins its budget deliberations today.

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Talbot Citizens Oppose Property Tax Increase

EASTON, MD – Talbot County taxpayers jammed into the Bradley meeting room of the Talbot County Courthouse and overflowed into halls Tuesday afternoon to express their opposition to breaking the county’s revenue cap.  Approximately 100 people also turned out for the second public hearing, which was held at Easton High School.

According to the Star Democrat’s Chris Knauss, most citizens supported councilman Tom Duncan’s plan, which increases the income tax rate to 2.6% and takes additional money from the county’s reserves rather than increase property tax rates.  Citizens also spoke out against the county’s proposal to cut funding to fire companies by $75,000.

An increase in tax revenues is required due to recently enacted state legislation which requires the county to fund maintenance of effort (MOE) for the county’s schools or risk having their income tax revenue confiscated.

photo courtesy of the Star Democrat

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Live – Wicomico County Council FY 2013 Budget Presentation

Will County Executive Rick Pollitt show up?

Will Pollitt stand up to the tyranny of Annapolis or attempt to BUST Wicomico’s Revenue Cap?

Tonight we’re blogging live from the council chambers and will keep you up to date with what happens.

Comment via the web page or Twitter.  Include #wicomico or #sbymd for you tweet to post.

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