Johns Hopkins Institutions



Legislative Hotline




Volume 12, Number 14 June 9, 2004



During the interim the�Legislative Hotline will be distributed monthly, on the second Friday of every month.� In addition to state issues, we will also include information on federal and local affairs, if relevant.� The Hotline will return to a weekly distribution when Session resumes in January of 2005.


To view the legislative information below, click on the subject of interest to go directly to that area or scroll down to view the entire document.

STATE

FISCAL SITUATION IMPROVES
SPECIAL PLANNING COMMITTEE FOR HIGHER EDUCATION
HB 1188 VETO - HIGHER EDUCATION AFFORDABILITY AND ACCESS ACT OF 2004
SB 117 VETO � PRIVACY OF SOCIAL SECURITY NUMBERS
SB 621 VETO � LIVING WAGE
SB 819 VETO � WAIVER APPLICATION PROCEEDS

CITY

PROPOSED BALTIMORE CITY TAXES


STAFF CONTACT INFORMATION

Fiscal Situation Improves

The budget forecast for the State of Maryland was very bleak. The State, which has enjoyed over a $1 billion surplus in FY 2000, was facing an almost $1 billion shortfall in FY 2006. However, in the past few months the state has experienced stronger than projected sales and income tax collections � resulting in a $150 million growth in revenue estimates for FY 2004.

If these revised revenue estimates are carried into FY 2005 and FY 2006, the budget shortfall for FY 2006 drops from $830 million to $250 million. While this is still a significant budget shortfall, the gap is getting easier to handle without the devastating budget cuts that were discussed earlier this year. Even though the budget for FY 2006 is looking more manageable, it should be noted that due to increases in the Medicaid budget and the final installments of the $1.3 billion Thornton plan, the structural imbalance returns in FY 2007 with a projected shortfall of $1 billion.

In the FY 2005 budget, language was added to the Medicaid budget implementing a $5.2 million cut through additional reductions in hospital day limits. However, due to greater than projected savings from the day limits implemented in July 2003, the Department of Health reported that the FY 2005 day limits will be reduced to $2.9 million (total funds). Please note that the day limits for both FY 2004 and FY 2005 sunset on July 1, 2005 (the start of FY 2006).

Special Planning Committee for Higher Education

Governor Ehrlich has directed the Maryland Higher Education Commission to convene a special State Planning Committee to examine the future needs of higher education.

The panel, chaired by the Secretary of Higher Education, Calvin Burnett, will include representatives from postsecondary education, legislators, members of the business community, and community leaders. They are charged with examining enrollment trends, the cost of education, faculty workloads, program redundancies and cost efficiencies in institution operations and administration, as well as state funding levels for all sectors. The goal of the group is to make sure college remains accessible and affordable for all Marylanders. The results of the findings will serve as a blueprint for the State Plan for Post Secondary Education due out this year. The panel members are:

HB 1188 Veto - Higher Education Affordability and Access Act of 2004

The Governor vetoed House Bill 1188, Higher Education Affordability and Access Act of 2004. House Bill 1188 as passed by the General Assembly would have created a funding formula for the public higher education institutions by providing a 5% increase in funding over the previous year. The bill also would have capped tuition increases for the public institutions at 5% over the preceding year. Additionally, the bill as passed by the legislature would have increased the state appropriation under the Sellinger Aid program in future fiscal years at the same 5% level as the public institutions.

HB 1188 also created a Commission to Study Maryland's Commitment to and Funding of Higher Education. The President of Johns Hopkins University and a representative of the Maryland Independent College and University Association were to have served on the commission.

The Governor citied two reasons for vetoing the bill. First, the bill created an unfunded mandate because it failed to provide a funding source to cover the full cost of the legislation. The second reason was the increase of the corporate income tax that was included in the bill. The Governor did not feel it was appropriate to increase this tax at a time when businesses are still trying to recover from the recession.

SB 117 Veto � Privacy of Social Security Numbers

Governor Ehrlich vetoed SB 117 that prohibits the use of publicly posting or displaying an individual's social security number, or printing the number on a card required to access a service or product, such as a health insurance card. The bill was designed to protect an individual�s social security number and assist in preventing identify theft crimes. While the bill permits an insurer to use a person�s social security number on documents sent through the mail, the bill prohibits putting a person�s social security number in documents sent via email or facsimile.

The Governor vetoed the bill citing that this section places an undue burden on the insurance industry and will create new obstacles for Maryland consumers from accessing information required from their insurers. The Governor noted that since many insurers serve citizens in multiple states, Maryland�s protection of social security numbers needs to be consistent with other states such as California�s recent enacted privacy bill until such time that the federal government takes appropriate action.

SB 621 Veto � Living Wage

Governor Ehrlich vetoed the Living Wage Bill - SB 621. The bill defined "Living Wage" as $10.50 per hour and would have required contractors or subcontractors with a State procurement contract for services valued greater than $100,000 to pay employees if at least one half of the employee's time during any workweek relates to the contract. The bill provided that if the employer provides health insurance to workers, the employer could reduce the wages paid by all or part of the hourly cost of the employer's share of the premium for each employee. Since nonprofits would have been exempt under the bill, there would not have been a direct impact to Johns Hopkins. However, Broadway Services holds two contracts that would have been impacted by this requirement.

The Governor vetoed the bill citing the State�s current fiscal condition, inadequate funds to pay for State procurements, and the fact that the bill does not take into consideration cost of living differences between different regions in the State. While the bill was vetoed because of the potential negative impact on Maryland businesses, there is discussion of an attempt by the legislature to override this veto.

SB 819 Veto � Waiver Application Proceeds

Citing a rushed process and lack of flexibility in its final form, Governor Ehrlich vetoed Senate Bill 819. Officially titled, Department of Health and Mental Hygiene � Federal Waivers � Waiver for Older Adults and Medicaid Managed Care Pilot Program, the bill is more commonly referred to as the �dually eligible waiver bill". His reasons for vetoing the bill included his belief that had it been enacted, it would have had the following four unintended consequences:

The Governor stated that Maryland�s Medicaid long-term care program needs more consideration, collaboration and planning prior to action, and assured that affected stakeholders and decision-makers will be involved in the process needed to resolve the long term care issues. Noting that legislation is not necessary for application to the Centers for Medicare and Medicaid (CMS) for a waiver to establish the State�s Community Choice Program, the Governor has instructed Secretary Sabatini to:
  • apply to CMS for an amendment to the existing Older Adults Waiver regarding the level of care and financial eligibility requirements, as directed by SB 819
  • report on the status of Maryland's amendment application to the General Assembly and the Governor by January 1, 2005
  • convene an advisory group or groups, composed of affected stakeholders, as well as the Department of Aging and the newly-created Department of Disabilities, to consult with DHMH in the coming months in order to examine fully the impact of applying for such a waiver, and
  • work closely with legislative leaders to build consensus on the waiver plans.
 Proposed Baltimore City Taxes

The main issue of concern in Baltimore City is proposed revenue enhancements. The Mayor�s administration has proposed three tax bills for the purpose of covering a $40 million deficit in the fiscal year 2005 budget. Two of these taxes, if passed, will affect Johns Hopkins.

The first is a 4% tax on energy consumption that will go into effect July 1, 2005. The 2005 effective date is due to the Payment In Lieu Of Taxes [PILOT] arrangement that Hopkins and nineteen other nonprofits negotiated with the City in 2001. City Council Bill 04-1359 will extend the energy tax to all nonprofits, residents, manufacturers, and government entities in the City. Other commercial users already pay an 8% energy tax.

The second proposal is a telecommunication tax. City Council Bill 04-1357 imposes a $3.50 monthly tax on every phone line in Baltimore City. The bill eliminates the exemption of nonprofits and governments from the current land line tax ordinance.

The Mayor and City Council have been informed that Johns Hopkins, along with the other nonprofits located in the City, unequivocally oppose the telecom tax. However, the organizations will not oppose the energy tax if some amendments are adopted. The proposed amendments will keep all parties in the bill and impose a cap on the amount nonprofits will pay. A sunset provision has also been proposed by the nonprofits. This measure, if passed, will apply to the fiscal year 2005 budget beginning July 1, 2004.

Hearings on the proposed taxes were held on June 2nd and 3rd. A committee report will be presented to the full City Council on June 14th. A final vote will be taken by the third week of June.

STAFF CONTACT INFORMATION
Please contact State Government Relations if you have concerns or would like additional information. Your input assists us greatly in evaluating and formulating the position of Johns Hopkins on all legislation.

Government, Community, and Public Affairs
901 S. Bond St., Suite 540
Baltimore, MD 21231
phone 443-287-9900
fax 443-287-9898


Heather Barthel hbarthe1@jhmi.edu
Mickey Geisler mgeisler@jhu.edu
Sheila Higdon shigdon@jhmi.edu
Maggy Huson mhuston1@jhu.edu
Jim Kaufman jkaufma@jhmi.edu
Bret Schreiber bschreiber@jhu.edu
Joe Smith jsmit185@jhu.edu
Cathy Ximenez cximenez@jhmi.edu

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ACRONYMS

© 2004 The Johns Hopkins Institutions. Baltimore, Maryland.
Office of Government, Community and Public Affairs.
Last updated 04June09