Center Maryland: Legislative Wrap-up — Maryland Energy Administration — VIDEO

WINNERS: Annapolis stalwart Devon Dodson details the significance of the recent win for wind energy. Abby Hopper, Acting Director of the Maryland Energy Administration; Governor O’Malley; Mike Tidwell, Director of the Chesapeake Climate Action Network; and Jim Lanard of the Offshore Wind Development Coalition are just a few of the big winners that put Maryland on the map for renewable energy.

Having trouble seeing the above video? Click here to go directly to it.

Damian O’Doherty is a corporate communications strategist, a principal of KO Public Affairs LLC and co-founder of Center Maryland.

Donald Fry: Federal fiscal uncertainty could erode states’ infrastructure funding options

By Donald C. Fry

Now that state lawmakers have passed legislation to raise an estimated $3.4 billion in new revenue during the next five years to address the state’s crisis in funding transportation infrastructure, the next transportation funding challenge looms not in Annapolis, but in Washington, D.C.

Maryland, like most states, relies heavily on federal funding to pay for at least half of its major highway and transit projects.

But the current federal transportation authorization legislation known as MAP 21, an acronym that ironically stands for “Moving Ahead for Progress in the 21st Century,” expires on October 1, 2014. After that, prospects for the long-term solvency of the federal transportation fund appear to be in serious jeopardy.

When it was passed in 2012, the MAP 21 bill was heralded as legislation that, with a budgeted total of $118 billion, would bring 27 months of much needed transportation funding certainty and program stability.

However, the Congressional Budget Office reported to Congress on April 24 that both the Highway account and the Transit account of the federal Highway Trust Fund will be insolvent in fiscal 2015.

With an abrupt ending forecast for federal transportation funding certainty and with federal sequestration in effect, the pressure in Washington is to decrease, not increase federal spending.

This would ratchet up fiscal challenges for Maryland and other states that already face other major issues that constrain state budgets.

Such issues include Medicaid spending growth that is crowding out other needs, underfunded state retirement promises, local government fiscal stress, and state budget practices that hinder fiscal stability and mask imbalances, Joshua C. Greene, a partner in Patton Boggs, the world’s largest public policy firm, told state lawmakers in February.

The federal Highway Trust Fund “no longer can serve as a source of capital for new infrastructure,” says noted transportation expert Ken Orski. “And funding large capital-intensive projects with current user-fee revenues no longer is feasible.”

Eventually, with diminishing capacities to finance costly, multi-year construction projects on a “pay-as-you-go” basis, states will increasingly finance such projects through long-term obligations and public-private partnerships, Orski forecasts.

Maryland, which just passed a transportation revenue increase, has vast transportation needs. The single top-priority projects in each of Maryland’s 23 counties and Baltimore City will cost more than $12 billion. There are billions more needed for other projects on local priority lists.

Meanwhile, transit system expansion projects are always beyond any state’s sole fiscal capacity.

For example Baltimore’s badly-needed Red Line – which would convert the region’s hodge-podge of disconnected rail transit into a comprehensive integrated system that would give our region’s commuters and citizens vastly upgraded transit options – is approved for $1.25 billion in federal funding, approximately half of the project’s cost.

Many other states are not waiting for Congress to address the uncertain federal funding issues and are enacting transportation revenue increases.

It’s important to remember, however, that Maryland’s transportation revenue increase this year had little to do with fears of federal cutbacks in Washington. It was passed to begin addressing a more than $40 billion deficit in state funding for roads and transit that resulted from 20 years of transportation funding complacency in Annapolis.

So, where does the projected uncertainty of federal transportation funding leave Maryland? Despite our elected leaders’ political courage in enacting an unpopular gas tax, it leaves us facing the need for new innovative thinking and public-private partnership investment.

Maryland’s just-enacted public-private partnership legislation, intended to nurture private-sector interest in funding infrastructure that is critically needed if our state is to retain an edge in the uber-aggressive competition for business growth, is an encouraging first step.

But legislation is only the first step. The financial plans and partnership deals will be the key.

More than ever, Maryland needs fresh, creative thinking in both the public and private sectors about non-traditional infrastructure-funding options.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.

Recent Center Maryland columns by Donald C. Fry:

Business issues rose to the top of State House priority lists in 2013 session

O’Malley deserves better grade for affordable college in Maryland

Hire One Youth: connecting Baltimore’s youth with private-sector opportunity

Maryland’s transportation funding crisis is real, not contrived

Unmet county priority lists frame the need for transportation funding bill

CEOs are talking about Maryland’s competitiveness

Lessons from the port’s record year

Center Maryland: Inside Out — Joseph “Max” Curran, III — VIDEO

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Saul Ewing LLP Partner Joseph “Max” Curran, III explains how Maryland is making progress encouraging renewable energy. Some of the specific subjects discussed in the interview are solar power, STRIDE legislation, offshore wind and smart meters.

J. Joseph “Max” Curran III is vice chair of the firm’s Project and Resource Development Practice and a member of the Energy and Utilities Practice.

Center Maryland: Inside Out is a video politicast featured on Center Maryland. Lisa Harris Jones joins Damian O’Doherty to discuss Maryland’s growth, investment and infrastructure policies with various political insiders and elected officials. Center Maryland: Inside Out brings political realities to the forefront of the discussion, advancing reasonable and responsible ideas.

Having trouble seeing the above video? Click here to go directly to it.

Lisa Harris Jones is an Attorney at Law and Lobbyist, Member and Founder of Harris Jones & Malone, LLC. Damian O’Doherty is a Corporate Communications Strategist, a Principal of KO Public Affairs LLC, and Co-Founder of Center Maryland.

Josh Kurtz: House Cleaning

By Josh Kurtz

Jimmy Malone and Steven DeBoy are just the tip of the iceberg.

When the House of Delegates convenes in 2015, there could be as many as 50 new members. That’s right, more than a third of the chamber could — could — turn over.

Malone and DeBoy, conservative Baltimore County Democrats, were part of the first wave of retirements, signaling their intentions just after Sine Die. Del. Liz Bobo (D), a Howard County liberal, announced her retirement plans months earlier. Others are planning to seek higher office.

The Malone and DeBoy departures say something about the unique challenges facing conservative and moderate Democrats in Annapolis. Redistricting wound up doing them no favors, either.

Indeed, redistricting will contribute heavily to the looming reconfiguration in the House, along with all the usual reasons: electoral defeats, delegates running for higher office, and pure retirements.

In the Senate, turnover has helped contribute to the long tenure of President Mike Miller (D). At this point, Norm Stone (D) is the only senator who has served with someone other than Miller as president. Senators simply don’t know what life is like in the chamber without Miller running the show. No one has the seniority, gravitas or political cojones to challenge Miller’s supremacy.

But in the House, it works a little differently. No one is suggesting that Speaker Mike Busch (D), like Miller, the longest-serving presiding officer in the history of his chamber, is in any kind of danger of losing his gavel. But the House is a much less manageable place under the best of circumstances. As more and more newcomers arrive, with fewer connections and loyalty to Busch than the members who were there when he became speaker in 2003, it becomes harder for Busch and his lieutenants to maintain day-to-day control. That’s just the nature of the beast.

So here’s a quick look at possible House departures, by their newly-drawn district numbers (if districts aren‘t listed, it means all the incumbents are currently expected to return). Remember, upsets and surprise retirements are always possible as well — and someone could wind up as a candidate for lieutenant governor.

1B: Although he’s one of the two most conservative Democrats in the House, Del. Kevin Kelly is always vulnerable to a Republican challenge, depending on the quality of the candidate and the whims of the voters.

1C: Will Del. LeRoy Myers (R) run for Congress?

2C: Although Hagerstown is becoming increasingly Democratic, Del. John Donoghue (D) is never truly safe.

3A: Whether or not he’s elected mayor of Frederick this year, Del. Galen Clagett (D) is almost certainly not returning.

5: Four Republican incumbents have been drawn into the district. Del. Don Elliott (R), who is 81 and finishing his seventh term, is expected to retire. Del. Nancy Stocksdale (R), 78 and in her fifth term, is a candidate for retirement as well.

6: Del. John Olszewski Jr. (D) is the frontrunner to replace Stone in the Senate, assuming he departs, and Del. Sonny Minnick (D) is on retirement watch as well.

8: Depending on the political dynamic in 2014, Del. Eric Bromwell (D) could be a Republican target. There’s also a vacancy, thanks to redistricting.

9: With Sen. Allen Kittleman (R) likely running for Howard County executive, one or two of the delegates in the district could try to move up. Del. Susan Krebs (R) is now in Dist. 5. And there’s a new Dist. 9A, a Democratic-leaning sub-district with no incumbent.

10: The district lines have been changed significantly, and Del. Shirley Nathan-Pulliam (D) has already announced her plans to challenge Sen. Verna Jones-Rodwell (D) in a different district.

11: There are rumors that Sen. Bobby Zirkin (D) is contemplating retirement, and Del. Dan Morhaim (D) would almost certainly run for his seat. Already Del. Jon Cardin (D) is planning to run for attorney general.

12: As noted above, all three delegates — Malone, DeBoy and Bobo — are out.

13: Sen. Jim Robey (D) just announced his retirement. Will Del. Guy Guzzone (D) run for his seat or for Howard County executive? How much longer do Dels. Frank Turner (D) and Shane Pendergrass (D), stick around?

15: Not everyone is convinced Senate Majority Leader Rob Garagiola (D) is running for re-election, despite what he says — and the $71,000 in his campaign account. If he didn’t, Del. Brian Feldman (D) would surely run for his seat.

16: Del. Susan Lee (D) is running for the seat Sen. Brian Frosh (D) is giving up to run for attorney general. Del. Bill Frick (D) is planning to run for AG as well.

17: Del. Luiz Simmons (D) seems to be gearing up to run for Senate regardless of whether Sen. Jennie Forehand (D) stays or goes.

19: Del. Sam Arora (D) has had a big target on his back since he voted against marriage equality. But no strong challenger has emerged yet. Del. Ben Kramer (D) could wind up running for Montgomery County executive, but only if the incumbent, Ike Leggett (D), opts for retirement — which seems increasingly unlikely.

20: Del. Heather Mizeur (D) is running for governor. Del. Sheila Hixson (D) is 80. Candidates are already lining up to run.

21: Former Prince George’s Councilman Tom Dernoga (D) is contemplating a run, which could scramble everything.

22: Del. Anne Healey (D) is on mild retirement watch, and it’s worth noting that newly appointed Del. Alonzo Washington (D) was not the first choice of Sen. Paul Pinsky (D) when the Prince George’s Democratic Central Committee was filling a vacancy. That suggests a degree of instability exists.

23: The district has four incumbents now, including House Judiciary Chairman Joe Vallario (D) — who could be the odd man out. Del. Jim Hubbard (D) is also being squeezed by the new lines.

24: Del. Carolyn Howard (D) may be thinking of retiring. It’s worth noting that Del. Darren Swain (D) is new, and Sen. Joanne Benson (D) doesn’t especially get along with the other two delegates. Will Tiffany Alston attempt a comeback? Will Greg Hall run for the seat he was almost appointed to?

25: Del. Aisha Braveboy (D) is running for attorney general. Will Del. Melony Griffith (D) take on wounded Sen. Ulysses Currie (D)?

26: The latest rumor has Sen. Anthony Muse (D) contemplating a challenge to Prince George’s County Executive Rushern Baker (D). Surely at least one of the delegates would run for his Senate seat under that scenario — and Del. Veronica Turner (D) may take him on regardless.

27: The Vallario seat is now up for grabs.

29: All three delegates could be gone. Del. Johnny Wood (D), at 77, is a candidate for retirement in 29A, and Democrats — even conservative Democrats — aren’t much in favor in the district these days. Del. John Bohanan (D) also faces electoral peril in 29B. And Del. Tony O’Donnell (R) in 29C? Who knows? He could wind up running for Senate or Congress.

30: The district has changed a lot and now has sub districts. The incumbents in 30A are Speaker Busch and Del. Herb McMillan (R). The new lines help the former and hurt the latter. Del. Robert Costa (R) is now the incumbent in 30B. He’s considered a candidate for retirement.

31: The district has also been split into sub districts. 31A has no incumbent. 31B has three. Does Del. Steve Schuh (R) proceed with his plans to run for Anne Arundel county executive? Is Del. Don Dwyer (R) toast?

32: Dels. Mary Ann Love (D) and Ted Sophocleus (D) are both on retirement watch.

34: If Sen. Nancy Jacobs (R) retires or runs for re-election in Dist. 35, do one of the delegates step up to run for Senate?

35: With Sen. Barry Glassman (R) running for Harford county executive, one or more of the delegates could try to move up.

37A: Will Del. Rudy Cane (D) want another term in 2014, when he will be 80?

38: The district has been split into three subs, with Republican Dels. Charles Otto and Mike McDermott thrust into the same sub district. McDermott seems set to challenge Sen. Jim Mathias (D), so he’s probably gone. Dist. 38B will produce a non-incumbent winner, and in 38C, House Apropriations Chairman Norm Conway (D) could find himself in deep trouble.

39: The incumbents are probably all seeking re-election. But does former Del. Saqib Ali (D) try to get his old seat back, or does he run for something else, and which incumbent is most vulnerable if Ali tries for a House seat in 39?

40: Four Democratic incumbents are now in the same Baltimore City district: Dels. Frank Conaway Jr., Keith Haynes, Barbara Robinson and Shawn Tarrant. Something’s gotta give.

42: Much shuffling in this Baltimore County district. Del. Stephen Lafferty (D) seems safe in 42A, but four Republican incumbents now live in the two-seat 42B: Dels. Susan Aumann, Joseph Boteler, William Frank, and Wade Kach. Kach is said to be contemplating challenging Sen. James Brochin (D).

43: If Sen. Joan Carter Conway (D) decides to retire, one or two delegates could try to move up.

44: The district now has one seat centered in Baltimore City, and two anchored in Baltimore County. City Dels. Keiffer Mitchell (D) and Melvin Stukes (D) live in the same subdistrict in the city. Mitchell could wind up as Doug Gansler’s running mate.

45: Will Sen. Nathaniel McFadden (D) retire? Will Del. Cheryl Glenn (D) run for Senate regardless of what McFadden does? Will newly appointed Del. Nina Harper (D) be able to run a competitive race for a full term. Already Cory McCrary (D), an aggressive and impressive union and community activist, is seeking a House seat in this East Baltimore district.

46: All the House incumbents are running for re-election at this juncture, and all appear strong. But they’ve also got a strong challenger in Brooke Lierman, a lawyer and the daughter of former Maryland Democratic Chairman Terry Lierman.

47: This Prince George’s district has a new majority-Latino sub district that was designed to elect County Councilman Will Campos (D). That means three incumbents are now in a two-seat sub district: Dels. Jolene Ivey (D), Doyle Niemann (D) and Michael Summers (D). If Ivey winds up on a gubernatorial ticket, as rumored, that would take care of the problem.

Josh Kurtz is editor of Environment & Energy Daily, a Capitol Hill publication. He can be reached at joshkurtz92@gmail.com.

Recent Center Maryland columns by Josh Kurtz:

Reality Check (in Four Parts)

Winners and Losers

Filing Deadline Quietly Changed to Early January

Stations of the Cross and the Station That’s Become a Cross to Bear

Fools Rushern In

A Sense of the Senate

Montgomery Councilmember Seeks Investigation Into Anonymous Web Attack

Peter Principle

Center Maryland: Legislative Wrap-up – 1000 Friends of Maryland — VIDEO

Winners: 1000 Friends of Maryland, led by Dru Schmidt-Perkins, collaborated with numerous transportation leaders and activists like the Coalition for Smarter Growth and Get Maryland Moving, to build support for a once-in-a-generation transportation infrastructure financing effort to create and maintain over 44,000 jobs.

Having trouble seeing the above video? Click here to go directly to it.

Damian O’Doherty is a corporate communications strategist, a principal of KO Public Affairs LLC and co-founder of Center Maryland.

Inside the Headlines with Towson President Maravene Loeschke (Part 2 of 2) — VIDEO

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The second half of Towson President Maravene Loeschke’s interview focuses on Towson University’s commitment to Innovation to Teacher Preparation, STEM Education, a new Leadership Program and the important role the University has in the Towson community.

Inside the Headlines is a video politicast featured on Center Maryland. Damian O’Doherty brings guests on the show to have in-depth conversations on major news happening in Maryland.

Having trouble seeing the above video? Click here to go directly to it.

Damian O’Doherty is a corporate communications strategist, a principal of KO Public Affairs LLC and co-founder of Center Maryland.

Inside the Headlines with Towson President Maravene Loeschke (Part 1 of 2) — VIDEO

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WINNER: Towson President Maravene Loeschke comments on Towson University’s ability to work with the Governor to allot $300,000 out of the state budget to allow time for the university’s baseball program to become self sufficient by 2015. Part of the initiative was tackling Title IX requirements head on by assigning an additional $2 million for a new women’s softball field.

Inside the Headlines is a video politicast featured on Center Maryland. Damian O’Doherty brings guests on the show to have in-depth conversations on major news happening in Maryland.

Having trouble seeing the above video? Click here to go directly to it.

Damian O’Doherty is a corporate communications strategist, a principal of KO Public Affairs LLC and co-founder of Center Maryland.

Josh Kurtz: Reality Check (in Four Parts)

By Josh Kurtz

A couple of days before the end of the General Assembly session in Annapolis, a couple of lobbyists for the National Rifle Association were overheard talking.

“Now comes the fun part,” one said to the other.

In other words, with the session ending, gun rights groups can begin inflicting pain on senators and delegates as they begin running for re-election — whether they voted for Gov. Martin O’Malley’s gun control package, or whether they voted against it. In some districts, the NRA and their allies figure, voters will be so incensed about the new gun laws that they’ll be willing to take it out on Democratic incumbents, even those who voted against the gun control package.

They’re probably right — but only up to a point.

After all, how many resources will the NRA and other pro-gun groups be willing to pump into Maryland legislative races? Will national gun rights groups care one whit about Maryland? And even with adequate resources, how many senators and delegates will the NRA be able to take out, realistically?

As we’ve written previously, there may be five or so Democratic state senators in Maryland who are vulnerable to a general election challenge — and no doubt, the legislature’s recent shift to the left, including on gun control, contributes to these lawmakers’ precarious states. To the extent that conservative organizations are going to target any of these incumbents, gun groups have a role to play.

But if they knock off five Democratic senators — so what? The Democratic advantage goes from its current 35-12 to 30-17. That admittedly makes it harder to move controversial legislation through the chamber — and gives whatever moderate Democrats who remain an element of power and leverage that doesn’t exist now. But it doesn’t change the overall dynamic very much at all.

The same is true in the House, where Democrats currently hold a 98-43 advantage. At most, eight or 10 House Democrats are vulnerable in November 2014 to Republican challengers. That would give Democrats, at worst, an 88-53 majority.

National party organizations and advocacy groups don’t generally take the long view about politics. Some strategist may think it’s in the conservative movement’s long-term interest to have 53 House Republicans in Annapolis instead of 43, that it helps the long slow march to a majority (that will never come).

But the people who hold the purse strings don’t take the long view. So why should the NRA and their conservative allies invest a dime to shrink yawning Democratic majorities in Maryland in 2014 when Republicans need to flip just one seat to take control of the Nevada state Senate? Or two seats in Oregon? Or three seats in Colorado or Iowa?

Financial and mathematical realities mean the Maryland NRA operatives won’t have as much fun between now and Election Day as they’d like.

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The Dutch Ruppersberger for governor boomlet has been interesting to observe. But even though a few reporters and bloggers have begun asking the congressman and his aides about his intentions for 2014, the fact remains that his response (essentially, “I’ll think about it”) is no different than it has been for the last two years at least.

Ruppersberger, in a short video interview on the Maryland Juice political blog Friday, repeatedly emphasized how much he likes his current job. More tellingly, he said, “Right now, I really don’t have time to do anything at this point.”

At the end of 2012, Ruppersberger’s congressional campaign account had $891,000 — most of which can be used on a race for a state office. That’s certainly a decent sum of money to build a campaign on.

But Ruppersberger is 67 now. He’s got a very nice gig as ranking Democratic on the House Intelligence Committee — and if, by some miracle, Democrats flip control of the chamber in 2014, he’ll have one term as chairman.

Ruppersberger would surely love to be parachuted into the governor’s office. But get a late start running against younger, hungrier opponents in an already crowded Democratic primary? Spend the next several months working the phones to raise money and criss-crossing the state to woo party activists? And risk a very prominent position for a crap shoot?

Not likely to happen.

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Speaking of wannabe governors, as Del. Heather Mizeur (D) lays out a rationale for her candidacy, one of the things she tells potential supporters is that powerful national women’s groups like EMILY’s List are all but certain to back her candidacy.

That’s probably true enough. But there’s backing her, and then there’s backing her.

EMILY’s List can be a formidable ally for any Democratic woman who favors abortion rights. Support from the group can yield hundreds of thousands of dollars in contributions. EMILY’s List has made the difference in several key state and congressional races over the years.

But consider what’s on the organization’s plate this year and next. EMILY’s List is backing five big-city candidates for mayor in 2013 — including Los Angeles City Comptroller Wendy Greuel, who is locked in a tight mayoral runoff that’s being held on May 21 (though she was trailing by 9 points in the most recent poll). The List’s list also includes Christine Quinn, the New York City Council speaker who is trying to make history by becoming the city’s first woman (and first openly gay mayor) — and is currently the frontrunner.

Come 2014, EMILY’s List will be working to protect two potentially vulnerable U.S. senators, Kay Hagan of North Carolina and Jeanne Shaheen of New Hampshire. The group is also talking to 15 potential candidates for governor — including Illinois Attorney General Lisa Madigan, who would be the frontrunner if she runs; Rhode Island state Treasurer Gina Raimondo, who would be very formidable; and Pennsylvania Congresswoman Allyson Schwartz, the Democratic frontrunner in a state where the Republican governor is tanking in the polls.

Hawaii Congresswoman Colleen Hanabusa might also run for governor or Senate next year, and Alex Sink, the Democratic gubernatorial nominee in Florida in 2010, may try again next year.

What do these women have in common? They all have a better chance of becoming governor of their states than Heather Mizeur has of becoming governor of hers — at least at this early stage.

So while yes, EMILY’s List will help Mizeur, she doesn’t appear destined to be anywhere near the top of the List at the moment.

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A number of people have asked me to write about former state GOP Chairman Alex Mooney and his apparent desire to run for Congress in West Virginia, now that he’s moved there. I’ve been flip about it and said that in any West Virginia contest, Mooney wouldn’t be the most conservative candidate, and that voters there would surely be wary of a half-Hispanic carpetbagger. I guess I stand by that view, with all due respect to Mooney and to West Virginia Republicans.

But to stick with the theme of this week’s column, let’s take a look at some of Mooney’s potential GOP primary opponents in the race to succeed Congresswoman Shelly Moore Capito (R), who’s running for Senate and will probably win.

Although he hasn’t formally declared his candidacy, the frontrunner is probably former state Sen. Steve Harrison, a banker who was a triple major and college football player at Brown University. He’s a leader in the group Fellowship of Christian Athletes, and for fun, he’s become a national champion discuss thrower in the 45-50 age category. He peppers his Twitter feed with links to anti-gay marriage and pro-life groups.

Other possible candidates include state Senate Minority Leader Mike Hall — an ordained minister who lost a bid for state treasurer in 2012 — and state Del. Eric Nelson, a banker and an elder in his local Presbyterian church who also boasts membership in the NRA, local Chamber of Commerce and state oil and gas association, and whose father was a state legislator with the same name.

Mooney knows a lot about raising money — heck, he’s writing a book on that very subject. But he probably had a better chance of winning a seat in Congress if he’d remained in Maryland’s 6th district than he does in the district where he’s living now.

Josh Kurtz is editor of Environment & Energy Daily, a Capitol Hill publication. He can be reached at joshkurtz92@gmail.com.

Recent Center Maryland columns by Josh Kurtz:

Winners and Losers

Filing Deadline Quietly Changed to Early January

Stations of the Cross and the Station That’s Become a Cross to Bear

Fools Rushern In

A Sense of the Senate

Montgomery Councilmember Seeks Investigation Into Anonymous Web Attack

Peter Principle

Louie, Louie

Center Maryland: Legislative Wrap-Up –Transportation — VIDEO

Winners: Maryland Department of Transportation Team, led by Acting Secretary Darrell B. Mobley and Acting Deputy Secretary Leif Dormsjo, collaborated with numerous transportation leaders and activists like Tony Hausner of Purple Line Now and Get Maryland Moving to build support for a once-in-a-generation transportation infrastructure financing effort to create and maintain over 44,000 jobs.

Having trouble seeing the above video? Click here to go directly to it.

Damian O’Doherty is a corporate communications strategist, a principal of KO Public Affairs LLC and co-founder of Center Maryland.

Donald Fry: Business issues rose to the top of State House priority lists in 2013 session

By Donald C. Fry

Going into the 2013 General Assembly session, business advocates hoped that lawmakers would consider passing legislation to address the state’s growing crisis in funding transportation infrastructure.

But even the most optimistic of transportation advocates, myself included, gave passage of a transportation revenue bill a 50 percent chance at best – largely because of lawmakers’ long-standing reluctance to increase transportation funding by the $600 million to $800 million it would take to begin easing the more than $40 billion backlog of unfunded priority projects around the state.

But lawmakers this year delivered. They passed the first comprehensive transportation revenue package in decades and, on the last day of the session, even passed a constitutional amendment creating a lockbox to protect transportation funding from being used for other purposes.

What changed? Several things. First, the General Assembly’s own fiscal analysts projected that, because of stagnating revenue to the state’s transportation fund, by 2017 Maryland would not have any funding for new transportation projects and could afford only maintenance of the state’s roads, bridges, transit and other transportation assets.

Second, Virginia’s state legislature this year managed to pass a badly-needed transportation revenue package that raised basically the same amount of new funding that Maryland legislators had been avoiding like the plague for at least a decade. This instilled a fresh spate of competitive pressure on those under the Maryland State House dome.

Third, and perhaps most important, the state’s top elected officials, Governor Martin O’Malley, Senate President Mike Miller, and Speaker of the House Michael Busch forged a consensus and demonstrated political courage and leadership to address this long-standing state need.

Something else happened in Annapolis this year. Lawmakers didn’t stop with just passing the transportation bill. They delivered positive outcomes on a number of key issues relating to the state’s competitiveness for business growth and job creation.

They passed a host of bills supported by business advocates, including a bill to encourage private-sector investment in infrastructure projects through public-private partnerships, a new tax credit for cybersecurity investment, and tax credit increases for research and development, biotechnology investment and film production.

This year, the issue of business competitiveness and job creation rose to the top of the priority list in Annapolis. For example, lawmakers passed two-thirds of the bills the Greater Baltimore Committee supported.

Following are summaries of keynote issues for the GBC and other business advocates that gained favorable outcomes this session.

TRANSPORTATION

• Transportation funding. The General Assembly passed HB 1515, a consensus proposal by Governor O’Malley, Senate President Miller and House Speaker Busch that was the GBC’s top priority. It is estimated to generate up to $3.4 billion in new revenue to the state’s transportation fund over the next five years and will allow the state to begin addressing the massive backlog of unfunded transportation projects.

• Transportation funding lockbox. Lawmakers passed SB 829, a constitutional-amendment lockbox bill sponsored by Senate President Miller and supported by the GBC that would require Transportation Trust Fund proceeds to be used only for transportation purposes. For any other use, the measure requires a declaration of a fiscal emergency by the governor and a three-fifths vote of the entire General Assembly. In the final two hours of the session, the measure passed the House by a 106-32 vote and the Senate by a 40-7 vote. This proposal will appear on the 2014 election-year ballot for voter approval.

• Public-private partnerships. On the last day of the session, lawmakers passed HB 560, another GBC priority that establishes state policy on the use of public-private partnerships and expressly authorizes specified state agencies to enter into them. It is expected to be a key option for the state to leverage private-sector funding for transportation assets and other infrastructure projects. The bill creates a streamlined process by which state agencies and private industry can partner in financing and delivering public infrastructure projects.

EDUCATION

• School construction in Baltimore City. Lawmakers passed an amended version of HB 860, a high priority of the GBC that will overhaul the way public school construction is financed in Baltimore City. The measure leverages approximately $1.1 billion in funding by allowing the Maryland Stadium Authority to issue bonds that would generate funding for construction of 15 new schools and renovation of 35-40 other schools.

• College readiness. A bill to improve college readiness of Maryland’s high school students, SB 740, passed on the last day of the session. Among other things, the legislation is intended to address an alarming need for remedial courses in math and English among Maryland high school graduates when they enter college. More than 57 percent of students attending community colleges in the state need remedial courses, while 24 percent of Maryland high school graduates who go to a four-year college require remedial courses, according to state data.

BIOSCIENCE AND TECHNOLOGY

• Cybersecurity tax credit. On the last day of the session, lawmakers passed HB 803, creating a tax credit for investment in Maryland cybersecurity companies. The bill authorizes $2 million per year in tax credits between fiscal 2014 and 2018. Personal and corporate investors can claim a 33 percent income tax credit for an investment of up to $250,000 in a cybersecurity company located in Maryland.

• Biotechnology tax credit eligibility. Lawmakers passed HB 328, which expands tax-credit eligibility for investors in Maryland biotechnology companies. It would extend eligibility for biotechnology businesses older than 10 years by calculating from the date that the first tax credits were awarded to investors rather than the start date of the company. The legislation is intended to take into account the longer early-stage and product development cycles experienced by biotechnology companies.

• Biotechnology tax credit. The operating budget passed by lawmakers includes $10 million in available tax credits for biotechnology investment, a $2 million increase from the current fiscal year.

EXPANDING THE ECONOMIC BASE

• Job skills training. Lawmakers passed an administration bill that would nurture the creation of industry-led partnerships to advance the skills of the state’s workforce. Companion bills, SB 278/HB 227, passed both the Senate and the House by substantial majorities. They establish the Maryland Employment Advancement Right Now (EARN) program within the Department of Labor, Licensing and Regulation to provide competitive grants to industry partnerships to develop workforce training programs.

• Research and development tax credit. Passage of HB 386 increases available funding for research and development tax credits to $8 million – from $6 million available in the current fiscal year.

• Film production tax credit. Lawmakers passed SB 183, which increases the amount of available tax credits for film production activity from its current level of $7.5 million annually to $25 million in FY 2014. Available tax credits will revert to $7.5 million in FY 2015 and FY 2016.

• Corporate training centers. On the final day of the session, lawmakers passed a GBC-supported bill, SB 631, which will exempt corporate training facilities that have lodging for employees from paying county hotel taxes. Currently, counties in Maryland require corporate training facilities to pay hotel taxes, even though such corporate lodging facilities are not open to the public and are used exclusively to lodge employees attending training programs.

• Combined reporting. Legislation strongly opposed by the GBC and business advocates that would have instituted a combined reporting method of tax calculation for Maryland corporations with operations in other states, died in both Senate and House committees.

HEALTH CARE

Lawmakers passed HB 228, which put in place policies necessary to further implement federal health care reform in Maryland. Specifically, this bill provides funding for the Maryland Health Benefit Exchange, which is slated to begin open enrollment by October 1, 2013. Health insurance offered to individuals and small businesses through the Exchange will be effective January 1, 2014.

The bill expands Medicaid coverage and enables the Exchange to become financially self sufficient by 2015, according to the legislation’s fiscal note.

The exact impact of the bill on small businesses is difficult to quantify, say state fiscal analysts. However, beginning in 2014, the Exchange will be the only place small businesses will be able to receive tax credits for offering coverage, providing incentives for small businesses who do not offer coverage today.

Including federal funding to subsidize premiums for individuals making less than 400 percent of the poverty level (approximately $44,000 per year), the projected impact of the legislation on all providers, health care expenditures, and jobs is $682 million in increased funding and 9,000 new jobs in 2014, according to the fiscal note.

ENERGY

Lawmakers passed the O’Malley administration’s offshore wind legislation, HB 226. The legislation, which would add offshore wind energy to the state’s renewal energy standards. Beginning in 2017, the bill would require retail electricity sales in the state to include up to 2.5 percent from offshore energy sources. The specific required annual amount from offshore energy would be determined by the Maryland Public Service Commission.

What made the difference in Annapolis this year? In previous legislative sessions, business was frequently the target of proposed legislation that would hurt our state’s competitive position. Although legislative efforts contrary to business interests are still a concern, this year’s session did not leave the impression that business had a target on its back.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.

Recent Center Maryland columns by Donald C. Fry:

O’Malley deserves better grade for affordable college in Maryland

Hire One Youth: connecting Baltimore’s youth with private-sector opportunity

Maryland’s transportation funding crisis is real, not contrived

Unmet county priority lists frame the need for transportation funding bill

CEOs are talking about Maryland’s competitiveness

Lessons from the port’s record year