Unemployment falls in MD

The Bureau of Labor Statistics released state level employment figures for February today. Marylanders unemployment rate fell to 6.6 percent, down from the 6.7 percent it had hovered at for three months.

Maryland employers added 10,500 positions in February. They have added 38,200 positions since February 2012.

The job market is slowly improving, but it's important to remember that the number of employed Marylanders only exceeded the number employed before the 2008 recession as of six months ago. Collectively, Maryland has a long way to go before every working family is able to succeed.

The Week Ahead

Last week we blogged about Senate budget action, hunger in Maryland, and the good and bad news about transportation. Neil Bergsman also appeared in a Washington Times story about the gas tax. MBTPI also submitted Senate testimony in support of a Earned Income Disregard pilot program, and expanding education funding.

For the week of March 25th to March 31th:

• Both houses have passed their versions of the operating budget. Work now moves to conference committee, to iron out differences between the two versions of the bill. The constitutional target for passing the operating budget is next Monday, April 1st (the 83rd day of the session). Work continues on the capital budget.
• The House passed the transportation finance package last week. Action now moves to the Senate (SB 1054). MBTPI supports the Transportation Infrastructure Investment Act of 2013, but only if it is paired with an expansion - by amendment or a separate bill (i.e. SB 703) - of the refundable portion of the state earned income tax credit.

Maryland's transportation challenge - Good news and bad news

House of Delegates acts to fund Transportation projects – but tax credits are needed to ease the effect on low-income working families.

MBTPI from Center on Budget estimates

 THE GOOD NEWS: 

The Maryland House of Delegates, by a 78-56 vote, has approved a sensible financing plan for Maryland’s transportation network.

The plan will provide funding to maintain roads, to make our bridges and highways safe, and to expand mass transit, bicycle and pedestrian transportation options for Marylanders.

The funding – principally from a sales tax on gasoline, will phase in over three years (until now, the state gas tax has not increased in 20 years). Then, it will automatically adjust with inflation, so that our transportation system won’t fall behind again.

The bill also includes modest increases in transit fares – everyone has “skin in the game.”

THE BAD NEWS:

It makes sense to use gas tax and transit fare increases to support transportation needs. The problem is these sources place a disproportionate burden on low-income working families.

There is a solution within the legislature’s reach. They can also pass House Bill 845 or SB 703 to expand the state Earned Income Tax Credit. The credit particularly helps working people with kids who earn less than $50,000. By increasing it, we can offset their added cost of gas and transit costs that come along with these much-needed transportation improvements.

Hunger solutions in Annapolis and Washington

Image: wpclipart.com

On Thursday, March 21, Maryland Hunger Solutions hosted a legislative breakfast to discuss food policy in Maryland. In addition to eating breakfast, there are other things we should do to fight hunger.

In spite of Maryland's overall wealth, hunger, homelessness and poverty remain problems here. One in 10 people are poor. Based on official USDA statistics, one in 8 Maryland households cannot afford adequate food at some point during the year (up from one in 12 just a few years ago). 50,000 Marylanders are homeless at some point each year.

In our budgeting and public policy, Maryland’s leaders have done a lot to improve these things. They have respected the social safety net while implementing a balanced approach to balancing the budget. They expanded Medicaid and moved forward to implement the Affordable Care Act and state health exchange. They are moving forward on a five-year program to provide in-class breakfasts at all eligible schools.

The situation in most other states around the country is actually much worse – both in terms of the rates of hunger, poverty and homelessness, and the commitment of the political leadership. Still, in the wealthiest state in America, we can and should do better.

On the federal level, things have gone haywire. The forces of greed and fear are telling us that people should not feel “entitled” to food, shelter, and medical care. These things ought to be efficiently allocated by market forces on the basis of ability to pay. The savings should be used to reduce taxes on investment earnings and corporate profits, according to some.

Our national leaders DO need to reform the nation’s finances to bring down the long-term budget deficit. We should support a “Grand Bargain” to accomplish these goals. But not everything should be on the table. Cuts to “Domestic Discretionary Expenditures” that affect Food Stamps, WIC, school meals, and other vital safety net food programs must not be negotiable. Cutting food for the hungry should not be part of a partisan political deal.

Our jobs as advocates include:

1. Thank Governor O’Malley and our legislators for preserving and enhancing key food and health efforts here in Maryland.
2. Advocate for structural solutions to hunger and poverty to prevent problems in the future. Things like minimum wage and paid sick day policies really are hunger solutions. Ultimately, so are funding for public schools and promoting access to higher education and job skill training.
3. Tell our representatives in Congress to protect food, housing and healthcare for low-income Americans as they come to a sane agreement to reduce future deficits.

Senate budget action

The Senate Budget and Taxation Committee has crafted its version of the state budget for fiscal year 2014, and it will be considered by the full Senate this week.

The Senate committee proposal is very similar to the budget approved by the House of Delegates, with two notable exceptions.

1.       The Senate committee places $75 million of the available balance (over $1 billion in both versions) in the state’s general fund, rather than the “Rainy Day Fund.” In the event that federal budget actions cause a reduction in revenue, this money would be available to support the budget without the need for further action by the legislature.

2.       The Senate committee reduces by $100 million the state contribution to teachers’ and employees’ pension costs.

The resulting budget would grow 2.8 percent (including all funds but excluding payments to reserve funds), totaling $36.8 billion.

The budget would leave a balance of $359 million in the general fund balance and $845 million in the Rainy Day Fund – a total of over $1.2 billion.

Following debate, possible amendment and approval on the floor of the Senate, the budget will then go to a House-Senate conference committee. Assuming the conferees can work out differences fairly promptly, the budget could be complete by the April 1 constitutional target date.

The Week Ahead

Last week MBTPI testified on seven bills, including: forming a committee to study evidence-based budgeting (support), an earned income disregard pilot program (support), and the new transportation financing plan (support with amendments). We also blogged about action in the House Appropriations Committee and the benefits of raising the cigarette tax.

Last Friday the House of Delegates passed the operating budget. The Senate Budget and Taxation Committee also sent its version of the operating budget to the  full chamber. The Senate will debate the budget on the floor this week, setting up a conference committee next week. The Senate Budget and Taxation Committee report and supporting documents will be available online at 8pm tonight (look for them on the legislature's website under recent publications).

This morning, the Bureau of Labor Statistics released state level employment figures for January. Maryland's unemployment rate held steady at 6.7 percent, the same rate it has been since November. This is still lower than the national unemployment rate of 7.9 percent.

For the week of March 18th to March 24th:

• The Senate debates the operating budget, starting on Wednesday. The House continues work on the capital budget. Check the budget hearing calendar for more information.
• Maryland Hunger Solutions is holding a Fighting Hunger and Poverty Breakfast. Nearly 1 in 6 households in Maryland reported in 2012 the inability to afford enough food. The breakfast will allow attendees to hear and see the voices of individuals struggling with food insecurity and the challenges of living in or near poverty, and ultimately provide an opportunity for everyone to engage in the critical effort to eliminate hunger and poverty across our state. If you have any questions or to RSVP, please contact Lisa Klingenmaier (lklingenmaier@mdhungersolutions.org ) by tomorrow, March 19th. Thursday, March 21st, from 8-10am in room 170 of the House Office Building.

Cigarette tax will help budget and save lives

Md. Citizens' Health Initiative

The legislature is considering legislation to increase taxes on cigarettes. This would both raise funds to help resolve Maryland's remaining "structural budget deficit," and would discourage smoking - especially among teenagers and young adults.

Senate Bill 700 and House Bill 683 would increase the tobacco tax rate from $2.00 to $3.00 per pack. It would also increase the tax rate on other tobacco products (like chewing tobacco and pipe tobacco) from 30 percent to 95 percent of the wholesale price (excluding certain cigars), and mandates minimum and maximum tax rates for certain other tobacco products. These bills would also guarantee at least $21 million in annual funding for tobacco cessation programs, beginning in fiscal year 2015, and divert additional funding to other health care programs.


The Maryland Budget and Tax Policy Institute supports these bills because of the significant public health benefits of reducing smoking. Previous increases in the tobacco tax have reduced smoking in Maryland twice as fast as the national average, saving lives and taxpayers’ money by reducing the need for health care. Adding another dollar to the per-pack cost, along with the other increases in SB 700 and HB 683, will save many more lives.

It will also raise money for important health programs—perhaps as much as $81.5 million in fiscal year 2014 according to the fiscal note.

SB 700 and HB 683 would also put the brakes on the disturbing upward trend in cigar use by young Marylanders. Increasing the tax on these products to put them more on par with cigarettes would quickly reduce the number of underage users of these products, protecting their health and well-being.

Appropriations Committee Moves Budget Forward

The Appropriations Committee completed its action on the state budget last week, sending the proposal to the floor of the House of Delegates.

Photo - MBTPI

The committee recommended reducing the Governor’s proposed budget by $160 million (not including payments to reserve funds), or 4/10 of 1 percent.

The largest reductions were in the Medical Assistance program ($41 million). The recommended cuts mostly reflect revised estimates of caseloads and costs.

Other significant reductions include $18 million in debt service (reflecting a different estimate of the amount of “bond premium payments” the state is likely to receive from bidders on state debt issuances), and $10 million in funding for colleges and universities.

The recommended budget totals $36.8 billion, a 3.0 percent increase from 2013 (again, not including payments to reserve funds).

The proposed budget will leave a total exceeding $1.1 billion in the state’s general fund and “Rainy Day Fund” balances – even after accounting for the $115 million reduction in estimated revenues announced last week.

This week, the Senate Budget and Taxation Committee will make its own decisions on individual agency budgets, while the full House of Delegates deliberates on the Appropriations Committee recommendations. The legislature is sticking to the original schedule in its budget work, so there’s a good chance of wrapping up the budget by April 1, the constitutional target date.

The Week Ahead

On Friday, the House Appropriations Committee approved a balanced budget for consideration by the full House of Delegates. Last week we blogged about state leaders' new transportation financing plan and the latest revenue estimates for Maryland, and hosted a guest blog about unaccompanied homeless youth. MBTPI also opposed a bill eliminating the state corporate income tax, supported (with amendments) a host of other reforms to the corporate income tax, and supported expanding the refundable state earned income tax credit. All testimony can be found on our 2013 session page.

For the week of March 11th to March 17th:

• Hearings continue in both chambers on the capital budget. The House is also expected to send the operating budget to the Senate next week. Check the budget hearing calendar for more information.

Revenue Board Slightly Reduces Estimates

The Board of Revenue Estimates has revised the official estimate of state revenues downward by $115 million. The $115 consists of $77 million in the current year (1/2 of 1 percent) and $38 million in the upcoming fiscal year 2014 (1/4 of 1 percent). The decrease comes mostly from sales tax proceeds, with smaller reductions attributed to corporation and individual income tax. Even with this revision, revenues would grow 4.9 percent this year and 2.4 percent next year.

Comptroller Peter Franchot, the chair of the Board of Revenue Estimates, attributed the reduction to:

• Reduced consumer expenditures related to the 2 percent increase in federal payroll taxes that took effect January 1 (a part of the “fiscal cliff” provisions that was allowed to take effect).
• The economic ‘de-multiplier’ (my phrase, not Comptroller Franchot's) effects of anticipated federal budget cuts on Maryland’s economy.

This estimate revision arrives just as the legislature is completing its hearings on agency budgets and beginning to make its budget decisions.

In constructing the proposed budget, Governor O’Malley allowed for a cushion of over $1 billion.  He did this precisely because the resolution of the federal government’s budget was uncertain and that federal actions could affect state revenues and programs.

The legislature should not over-react to this modest reduction in revenue growth. The state budget remains balanced through June 2014 with a comfortable margin. Inflicting state budget cuts on top of federal cuts will not help our economy.

Teenagers and Young Adults on Their Own and Without a Place To Call Home – A Growing Problem That Needs a Smart Solution

Today's blog is a guest post from Ingrid M. Löfgren, Skadden Fellow/Attorney with the Homeless Persons Representation Project, Inc.

The Maryland General Assembly is currently considering SB 764/HB 823, a bill that would establish a task force to study the housing and supportive services needs of “unaccompanied homeless youth,” or young people between the ages of 14 and 25 who lack stable housing and are not in the physical custody of a parent or guardian. This bill represents a critical first step toward the development of statewide strategies to ensure that these young people transition to a stable and self-sufficient adulthood.

Homelessness among unaccompanied youth in Maryland has increased dramatically in recent years. The Maryland State Department of Education identified more than 14,000 homeless students during the 2008-09 school year, up from approximately 10,600 only two years earlier, and school systems in almost every jurisdiction report unaccompanied homeless students. Consistent with this trend, the Johns Hopkins Center for Adolescent Health identified 640 unaccompanied homeless youth in Baltimore in 2011 (of which 115 were aged 14-18), a 50 percent increase from 2009. Prince George’s County identified 185 unaccompanied homeless youth during its first count in 2012. Although more data is needed to accurately determine the scope of the problem, unaccompanied youth homelessness clearly is a persistent and growing issue in Maryland.

Unaccompanied homeless youth are extremely vulnerable and have unique needs that are not appropriately addressed by systems designed for adults. Although poverty, lack of affordable housing, unemployment, low education levels, and other factors that contribute to adult homelessness also play a role in the occurrence and duration of homelessness among young people, family breakdown and systems failure are the primary causes of homelessness for most unaccompanied youth. Many of these young people become homeless as a result of severe conflict in their homes; physical or sexual abuse; rejection by their families due to sexual orientation, gender identity, pregnancy, or mental health issues; or because they have aged out of the foster care system without the skills and resources necessary to live independently. They need a range of housing options and supportive services that take into account their developmental stage, lack of experience living independently and permanent connections, and traumatic experiences before and during homelessness.

Homelessness has serious consequences for unaccompanied youth and society. While living in shelters or on the streets, unaccompanied homeless youth are disproportionately likely to become victims of crime, suffer from physical and mental health issues, commit suicide, engage in risky sexual behaviors, drop out of school, and turn to delinquency as a means of survival. Without access to housing and supportive services, homeless youth experience poor educational, health, and workforce outcomes, leaving them ill-equipped to transition to stable and self-sufficient adulthood.

Passage of SB 764/HB 823 is a critical step toward ensuring that unaccompanied youth have access to a comprehensive continuum of developmentally-appropriate housing and supportive services, the key to preventing and ending their homelessness. The task force created by the proposed legislation will bring together for the first time representatives from key executive agencies, service providers, advocates, and youth to study the housing and supportive services needs of unaccompanied homeless youth in Maryland. The task force’s recommendations regarding legislation, policy initiatives, and budget priorities to meet these needs will greatly improve outcomes for some of Maryland’s most vulnerable young people.