Public Policies in Maryland That Discussion Chapter

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In "The Annapolis Report" -- a review of the 2010 legislative session -- the MPPI explains that due to the governor taking funds from the HUR all the counties' share and the Baltimore City share will be "significantly reduced" (MPPI). In fact the counties' share will "have been all but eliminated" the MPPI continues, quoting from an article in the Washington Post that asserts "…counties will have to contend with almost no 'highway user' revenue."

Moreover, through 2015, the Post is quoted suggesting that Maryland counties "will have to make due with less than 10% of the hundreds of millions they have typically received each year over the last two decades" (MPPI, p. 9). The actual dollar amount that the counties and Baltimore City will lose due to this dipping into funds by the governor is around $400 million, the MPPI explains.

Included in O'Malley's budget moves -- the legal term for the Maryland state budget is BRFA, e.g., Budget Reconciliation and Financing Act -- is another "loan" from another fund in Maryland that was not intended to shore up the state budget. That fund is the state's Bay Restoration Fund; the governor's plan is to take $200 million from the Bay Restoration Fund and put it into the general fund.

What was the Bay Restoration Fund supposed to do? The MPPI says that the main money from this fund is supposed to pay for upgrades to the state's wastewater treatment plants.

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Better wastewater treatment plants means that less toxic material from sewage plants will be dumped into Chesapeake Bay. In fact the taxes that are paid by users of wastewater treatment plants are now going into the state general budget rather than going for what it was supposed to be used for, upgrading sewage treatment plants.

The "Annapolis Report" also points out that O'Malley is borrowing $350 million from a "little-known fund called the Local Income Tax Reserve Account (LITRA). These monies are to be used to manage the "cash flow of personal income tax payments and distributions to local governments" (MPPI, p. 8). By borrowing from this account, O'Malley, according to MPPI, is diverting funds in a way that is "inconsistent with standard accounting practice" (MPPI, p. 8).

Conclusion: The borrowing of millions of dollars from the highway funds in Maryland by the governor is not unique to this state. Many governors move funds around from one account to another to balance the books, or at least give the impression of balancing the books. But when important funds for fixing roads and bridges is spirited away from counties to make the state government look good, that is wrong, and should be stopped.

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