New laws for your holiday weekend

July 1, 2016 sees the imposition of a number of new laws in Maryland.  Many of these will hit your pocketbook and limit your freedoms. Some are the continuing negative legacy of the O’Malley years and the ongoing efforts of Maryland Democrats to thwart Governor Hogan’s efforts to roll back this legacy.  There is one example of bipartisan success but it is a drop in the bucket compared to the imposition on the freedom of all Marylanders these new laws represent.

  1. Maryland’s minimum wage will rise from $8.25 to $8.75. It’s the latest bump scheduled to take effect since lawmakers in 2014 approved increases over several years from $7.25. It is scheduled to go up to $9.25 next year and reach $10.10 in July 2018.

We covered this increase when it was passed.  Here is what we said at the time:

The bill’s fiscal policy note, reports that only 67,000 workers in Maryland earned equal to or less than the federal minimum wage in 2012.  Maryland’s labor force in 2012 according to the Bureau of Labor Statistics was 3.1 million; meaning a hike in the minimum wage will affect only 2 percent of all Maryland workers.  The report also noted that half of all those earning at or below the federal minimum wage were younger than 25 and 21 percent were teenagers.
Increasing the minimum wage will also put upward pressure on state expenditures.  Legislative analysts estimate the bill will require an additional $500,000 in extra staffing costs for the Department of Labor Licensing and Regulation.  These costs will increase over time.  The effects of the law on state employees will also require and additional $10.6 million over the next five years.
Legislative analysts relied heavily on the left leaning Economic Policy Institute for its analysis on small business.  EPI is heavily funded by labor unions and its board of directors lists the heads of the country’s major labor unions, including the AFL-CIO, CWA, UFCW, and SEIU.   Citing heavily from EPI, the analysis ticks off the numbers of workers who will benefit and what they would receive, while dryly noting that small businesses will see increases in labor and payroll costs.
According to analysis by the Heritage Foundation:
  • Studies find raising the minimum wage does not reduce poverty.  It is a completely ineffective anti-poverty policy.
  • The primary value of minimum-wage jobs is that they are learning jobs. They teach inexperienced employees basic employment skills that make them more productive and enable them to earn raises or move to better jobs.
  • Over half of all Americans started their careers making within $1 of the minimum wage. Few stayed there long.
  • Two-thirds of minimum-wage workers earn raises within a year—without the government’s help.
  • Correctly adjusted for inflation, the minimum wage currently stands above its historical average since 1950.
  • The minimum wage hike sponsored by some Members of Congress and supported by President Obama would raise the minimum wage to an unprecedented level—one-seventh above its inflation-adjusted all-time high.
  • This would cause employers to reduce hiring, leaving fewer people employed. Macroeconomic modeling shows the proposed minimum wage increase would eliminate 300,000 jobs. That means fewer opportunities for unskilled workers to get started in the labor market and move their way up.
  • When businesses have to pay higher wages, businesses hire higher-skill workers, freezing the least productive, most disadvantaged workers out of the job market. Consequently minimum wage hikes harm the very people that proponents of the laws most want to help.

2. The state’s gas tax will rise nine-tenths of a cent to 33.5 cents. Lawmakers approved several increases in 2013, with regular hikes to adjust for inflation. The state’s gas tax has gone up a dime since 2013, when lawmakers approved the first increase in 20 years from 23.5 cents.

Despite recent efforts by Governor Hogan to roll back these ongoing increases, Annapolis Democrats have maintained the automatic increases in the gas tax.  Here is what we said back when these increases were passed:

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Maryland’s transportation funding woes are one of its own making.  Since 2003 the lawmakers have raided the state’s transportation trust fund to the tune of $ 1 billion to cover budget deficits.  Both O’Malley and Miller presided over much of those fund raids and cuts to highway user funds, which the counties use to maintain roads and infrastructure.  The excerpt  of a video from Reason.TV explains how O’Malley took over $861 million—including $771 million in federal stimulus dollars allocated for infrastructure—and used it to pay for other non-transportation spending.

The Maryland Public Policy Institute analyzed various gas tax and transportation revenue plans floated by the governor and others.  The report found that O’Malley’s gasoline sales tax, and other tax and fee proposals would disproportionately affect lower income families, taking a larger share of household income from those making $20,000 to $40,000 in income than families with higher incomes.  The analysis noted O’Malley’s 6 percent sales tax plan to be the most regressive among the various proposals.
MPPI also debunked the claim made by proponents of gas tax increases that new revenues would go to relieving congestion and maximizing mobility.  The study found that a disproportionate share of transportation money goes to transit, not roads, even though transit ridership has not substantially increased.

3. A state-sponsored retirement savings plan goes into effect. IRAs will be created for private-sector employees without access to a workplace savings program with their employer. Employees would need to make the contributions and can opt out of the program. The law applies to employers using an automated payroll system who don’t already offer a retirement program.

This is a particuarly disturbing measure as it was passed with wide Republican support.  The idea grew out of a study group lead by former Lt. Governor Townsend.  Here was our take on this group’s efforts:


The task force, established by Governor O’Malley, is, as Mr. Sears reported it,

The group is looking at the possibility of recommending the creation of a mandated retirement program where nongovernment employers would be required to offer a retirement plan or enroll employees into a state managed plan. Employees would be automatically enrolled and as much as 6 percent of their pay deducted for retirement (under one proposal) in a defined benefit plan unless the employee opted out.

Yes, the State of Maryland is studying how to force your employer to force you to save for retirement or have the state step in to do the forcing.  It is hard to imagine a more nanny-state concept.

What must the state’s Democratic leaders think of you that they feel the need, once again, to save you from yourself? Well, former Lt. Governor Kathleen Kennedy Townsend candidly relates what liberal democrats really think of the great unwashed over which they rule:

“I love education but why do drivers stop speeding? It’s not because they were told ‘This is bad for you’ but because things happen to make you quit speeding. I’m a great believer in education but I know as a mother of four children, I can tell kids what to do or I can tell them they have to go to their room if you don’t do it.”

Children.  The citizens of Maryland, in KKT”s eyes and those of the state democratic monopoly, view you and I as children who are too stupid to know what is good for us.  That is why they have a task force established to find a way for the state to “send you to your room” if you don’t save for retirement in the way they insist.

Liberals like KKT and O’Malley have the elitist view that they know better how to run your life then you do. They favor big government because we are just too stupid to be allow to govern ourselves as the founders of this country intended.

If Maryland Democrats want to know why they were beaten so badly in this year’s election, read this article and understand that a majority of Marylanders reject the idea of  nanny state that treats the citizens like children.

This is what we said about this legislation during the recent session:

Today, the Senate Budget and Taxation committee heard SB 1007, a bill which would establish a retirement system for Marylanders without access to a retirement plan. Under the plan, the state would create the “Maryland Small Business Retirement Savings Program and Trust,” and that agency would collect 3% of an eligible individual’s wage to participate unless that individual opts-out.

It is a mandatory retirement program that requires people to weave through a complicated process to prevent the state from taking even more of their money from their paychecks. Additionally, the agency will also collect a 1% administrative fee and, according to the Fiscal Note, “The State may not be held liable for thepayment of retirement savings benefits payable by the program or trust.”

This bill takes money from the citizens, hands it over to the state, pays the state a cut, and does not guarantee even the original investment to be returned to those who are forced to contribute. Also, the account that would keep these retirement funds will not be secure from being raided, and which happened with the state employee pension fund.

4. Maryland will have a new scoring system to prioritize transportation projects. It’s the result of a battle between the Republican governor and the Democrat-controlled Legislature over transportation funding. While the governor won’t be prevented from funding a project with a lower score than another, an explanation would be required for the decision. The governor vetoed the bill, but the Legislature overrode the veto in April, shortly before adjourning.

This was an issue that dominated a great deal of time last session.  It was a naked invasion of the Governor’s perogatives by Annapolis Democrats who would have never dreamed of such an action during the O’Malley, Glendenning or Schafer administrations.  Here is what we said at the time about it:

Either the bill usurps the authority of the executive branch and it is a bad bill, or it does nothing at all and has no reason to pass. The Governor should veto this legislation regardless of the answer, and he should wield the veto power to protect Maryland from such legislative abuses

5. A ban on powdered alcohol in the state will be extended two years until June 30, 2018.

Here is what Brian Griffiths wrote about this ban:

The first, and most obvious, aspect is the fact that the Liquor Lobby does what the Liquor Lobby always does; protect their back yard. There is no more protectionist lobby in the state than the Liquor Lobby. All alcohol sold in our state has to go through the wholesalers and distributors, and only they can sell to the liquor stores. Grocery stores (except for four grandfathered liquor stores in Montgomery County) can’t sell beer or wine as they can in Virginia. For years, consumers couldn’t have wine delivered to their homes, before enough legislators finally overturned the ban a few years ago.

More than likely, the Liquor Lobby saw powdered alchol as a threat to their business model and agree to cut a deal with Franchot (their regulator) to keep it off the shelves. The same kind of deal they cut to get beverages like Four Loko off the shelves a few years ago. This, of course, is crony capitalism at its finest.

The other, less obvious, aspect of this story is the contradiction between the banning of powdered alcohol and the legalization of marijuana. Before the announcement of the ban, there was a bill already trying to race through the General Assembly to forbid the sale of this stuff:

A bill ( HB1288) introduced by Baltimore County Del. Dan Morhaim would prohibit the sale of powdered alcohol through June 2016. Offenders could face a fine up to $1,000.

What’s of course fascinating about that bill though is the inclusion of Dr. Dan Morhaim as the lead sponsor of the bill. In addition to banning powdered alcohol, Morhaim has been one of the leading voices in supporting marijuana decriminalization in the General Assembly. Morhaim supports marijuana decriminalization despite the medical evidence that marijuana is harmful to people, particularly minor children. However, Morhaim’s justification for banning powdered alcohol is the “concerns over powdered alcohol among public health experts” and a lack of study of its medical impact on people.

So for Morhaim and other Democrats, legalizing an illegal narcotic that has well-studied harmful effects on people is good, but banning a substance that has been little-studied but is related to a legal substance is bad. This is the same type of liberal nonsense thinking that the sale of grain alcohol in our state last year.

I don’t understand the appeal of Palchol. I have no idea why anybody would want to have powdered alcohol instead of actual, quality beer, liquor, or wine. We may not know what it does to people, but we do know that this product has been approved by the appropriate regulatory authorities for sale. Why the same people who want to see marijuana legalized want to see powdered alcohol banned says a lot about the modern Maryland Democratic Party, their legislative priorities, their special interests supports, and the powerful impact of crony capitalism on our state liquor industry.

6. Funding to the state’s land preservation program known as Program Open Space will be restored. The law, already signed by the governor, will return $60 million over the next two years.

This is actually a bipartisan victory for Governor Hogan.  Here was our take on it:

The recent signing into law of HB 462, which restores and protects state funding to transfer tax funded land conservation, preservation and recreation programs such as Program Open Space.  This new law comes as the Maryland Board of Public Works announced this week that is was keeping the state’s property tax rate the same.

During the O’Malley administration, monies set aside for various special funds, including programs like Project Open Space, were seized and diverted into general fund spending.  These funds, despite scores of tax and fee increases, were never replenished during O’Malley’s tenure. In fact, the state started issuing bonds to continue to fund open space spending raising the specter that the property tax, used to fund Maryland’s debt payments, would itself need to be increased by the next administration.

Despite leaving this oil slick of poor fiscal management behind, in November, 2014, at one of is last Board of Public Works meetings, Governor O’Malley insisted that “the next administration will not be in favor of open space”.  The Daily Record reported the comments in full under the headline “O’Malley: Larry Hogan Hates Open Space.” This criticism came during the approval of a sweetheart land deal for a major donor to O’Malley and state democrats.

It is hard to imagine a more concrete example of the cynical, partisan leadership Marylanders endured for eight years under Martin O’Malley.

Despite the partisan hyperbole of former Governor O’Malley, the reality is that Governor Hogan, rather than hating open space, has done far more than his predecessor in protecting the program and its dedicated sources of funding.  The new measure, passed with wide bipartisan support and signed by Governor Hogan this week, provides $60 million in new funding for programs such as the Maryland Agricultural Land Preservation Fund, and Rural Legacy and Program Open Space. It also allocates funds for state land and park development, maintenance and recreation. The law also requires that the transfers under the O’Malley administration, totaling $90 million, be repaid with the state’s general funds and that additional repayments, totaling $152 million, be appropriated starting in 2021. The law prevents a repetition of the abuses under the O’Malley administration by establishing new procedures for all future appropriations, reimbursements and transfers.

This is hardly the act of an administration that hates open space as Governor O’Malley so petulantly claimed.

Hopefully, this post shows why it is important to be reading Red Maryland regularly.

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