20030201 Maryland Municipal League’s Maryland Mayor’s Association - Mayor’s Press Conference February 1st, 2003

February 1, 2003 Mayor’s Briefing Sheet

Maryland State Budget Municipal Impacts

Maryland Municipal League’s Maryland Mayor’s Association - Mayor’s Press Conference February 1^st, 2003

Also see:

20030131 State's mayors brace for state budget cut by Janie Schmidt and Carrie Knauer writing for the Carroll County Times

For more information, click on: Maryland General Assembly Opera, Maryland Municipal League, Westminster City Finance, Maryland State Budget, Taxes Maryland.

[For past posts on “Soundtrack” about the Maryland Municipal League click on: Maryland Municipal League. Disclosure: I served on the Maryland Municipal League Board of Directors annually for five consecutive years, from June 2000 to May 2005.]

The recently released Maryland state budget included cuts in aid to municipal government as the new Ehrlich Administration attempts to address budget deficits exceeding $1 billion. While the budget document touts overall increases in aid to local governments, those increases are largely confined to education and libraries – programs that do not affect Maryland’s incorporated cities and towns.

Provisions of the FY 2004 state budget with potential negative impacts on municipal government include proposals to:

Withhold from local governments $102.4 million in Highway User Revenues. Cost to municipal governments in FY 2004 is $12,267,074 according to an analysis prepared last week by the Maryland Department of Legislative Services

Withhold $10 million in circuit breaker tax credit reimbursement payments to local governments to help pay for administrative costs of the Maryland Department of Assessments and Taxation. Municipal impacts could approach $0.5 million.

Transfer to the state's general fund $29.9 million dollars from the local share of Program Open Space (POS) revenues. This represents a 48% reduction from the FY 02-03 program fund total. Total municipal losses will vary depending on what projects were planned for the coming year. However, an estimated 50% reduction to municipalities is likely in FY 2004.

Transfer to the state's general fund $8 million in the current fiscal year and $10 million in FY 2004 from the Waterway Improvement Program. Municipal impacts could approach $2.0 million.

Eliminate the Department of Natural Resources Community Parks and Playgrounds grant program. Since its inception two years ago, the program has provided around $11 million to local governments, with approximately 60% or $3.2 million of the funds going to municipalities in FY 2003 and 91% or $4.3 million in FY 2002.

Municipalities stand to receive additional funding through the following programs, which received more money in the Governor’s proposed FY 04 budget:

Increase to $8.7 million funding for the Community Legacy Program. Program funding has been $13 million and $6.5 million in each of the past two years. Municipalities received 76% or $10.7 million of these funds in FY 2002 and 83% or $2.3 million of available funds allocated thus far have been awarded to municipalities in FY 2003.

Increase by over $22 million, funding for the Maryland Water Quality Revolving Loan Fund and the Maryland Drinking Water Revolving Loan Program. Municipalities received $127 million or 32% of the available Water Quality Revolving Loan Fund monies from FY 2000 through FY 2003. Of the funding allocated from the Maryland Drinking Water Revolving Loan Fund from FY 00 through FY 03, 75% or $15 million of the monies went to municipalities. State estimates put the total funds needed to rehabilitate aging wastewater treatment plants over the next twenty years to be $4 billion.

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