January 23, 2012

150 attend spirited Annapolis rally for transportation funding, jobs

More than 150 managers and employees from a wide range of construction-related businesses filled Lawyers Mall in Annapolis January 19 for a spirited rally urging lawmakers to address the state's transportation funding crisis by increasing revenue to Maryland's Transportation Trust Fund and enacting protections to ensure the fund is used for transportation purposes.

The rally was conducted by the Statewide Transportation Alliance to Restore the Trust (START). The coalition is comprised of the Greater Baltimore Committee, the Greater Washington Board of Trade, the Maryland Chamber of Commerce, more than a dozen county and local chambers of commerce, and more than 60 advocate organizations and businesses. It seeks to convince members of the General Assembly to adopt recommendations made by the state's Blue Ribbon Commission on Transportation Funding to increase annual revenue to the transportation fund by $800 million.

In addition to beginning to address a massive transportation backlog of unfunded highway, transit, port and airport infrastructure projects, increasing transportation funding will enable work to resume on now-dormant projects that will create thousands of jobs in the construction industry and associated sectors severely affected by the recession.

Rally participants were out in the chilly weather in support of a gas tax increase proposed by the Blue Ribbon Commission. Dressed in suits, neon vests and hard hats, supporters held signs saying, "Jobs Jobs Jobs" and "Roads = Jobs."

Transportation advocates agree strong leadership from Governor Martin O’Malley is essential to gaining passage of measures to increase transportation funding. The governor is expected to announce his proposal to increase transportation revenue, possibly as soon as this week.

Report and video of the January 19 rally

Governor O’Malley proposes $35.9 billion FY2013 budget

Governor Martin O’Malley released his budget proposal on January 18 in Annapolis. It includes a number of proposals that aim to reduce the state’s $1 billion operating budget deficit through what the governor calls “a balanced approach of reductions and investments.”

The fiscal year 2013 budget proposal calls for a general fund operating budget of $15.3 billion, a 1.9 percent increase over the current year; and overall state spending of $35.9 billion, a 3 percent increase over the current year.

His proposal would raise the lion’s share of its new revenue by capping tax deductions and phasing out tax exemptions. According to Governor O’Malley, the average family of four earning $150,000 a year would pay $191 more in state and local income taxes, raising about $182 million in new revenue for the state.

Other revenues would come from requiring online sellers to collect sales tax ($21 million); adjusting taxes on other tobacco products ($19 million); settlements with pharmaceutical/insurance companies ($59 million) and online lottery sales ($2 million). The budget also calls for redirecting approximately $104 million of other revenue streams into the state’s general fund.

The governor is proposing a $3.6 billion capital budget with state infrastructure and construction spending that is estimated will support more than 37,000 jobs. He also proposes “leveraging” an additional $1.4 billion in local government and private spending that will support up to 15,000 jobs, according to the governor’s estimate.

Watch upcoming State House Updates for more budget analysis from the business development perspective.

Governor O’Malley’s news release and video of his budget proposal
Governor’s budget presentation
Budget Highlights summary from Department of Budget & Management
General Fund budget table

Invest Maryland online auction scheduled for March 15

On January 17, officials with the Maryland Venture Fund Authority and the Department of Business and Economic Development briefed members of the Senate Budget and Taxation Committee on InvestMaryland, one of the state’s boldest measures passed by the General Assembly last year that aims to generate at least $70 million to invest in small technology business.

MedImmune president Peter Greenleaf, chairman of the nine-member Maryland Venture Fund Authority that oversees the development of the program’s bidding mechanism that raises investment capital for seed and early-stage companies, told the committee through auctioning of tax credits to insurance companies, generated funds will be awarded to three or four private venture capital firms to invest in bioscience and other high-tech companies.

Twenty holding companies representing 48 insurance companies – 24 percent of the 200 companies eligible for the credit — doing business in Maryland have submitted letters of interest in the program’s tax credit auction. Applications for the credit are due Feb. 1, with the auction scheduled for March 15.

Greenleaf also reported that the Grant Street Group has been selected to manage the online auction process. The Grant Street Group has managed more than 125,000 auctions to date involving more than $11.6 trillion. Grant Street also has worked with many municipalities, including Baltimore.

The authority began meeting in August to discuss how to proceed with the auction and with selecting the venture capitalists that will make the investments. Members most recently met January 19 to review the auction strategy, marketing outreach and plan for training companies to participate in the auction.

Greenleaf also informed the committee of its selection of Altius Associates of London as its venture capitalist consultant. Altius currently manages $19 billion in investment portfolios.

The authority began taking venture capital certification applications this month and plans to send out its requests for proposals to certified firms March 20. Recommended firms will be presented to DBED officials in May. Funds from the auction will be awarded to the first venture capital firms in June.

Lawmakers briefed on emerging education demands of future workforce

The economy is demanding more educated workers, and there is growing evidence of a mismatch between jobs and skills, according to presentations on higher education made January 19 to members of the Senate Budget and Taxation Committee and the House Appropriations Committee.

Forecasts show that by 2018, new jobs in Maryland requiring postsecondary education and training will grow by 213,000 – more than double the increase of anticipated jobs available for both high school graduates and dropouts combined.

Meanwhile, colleges and universities must compete for fewer resources today and in the future. Additionally, a swelling tide of more – and more diverse – students will continue to put pressure on public colleges and universities.

Committee members also heard a presentation on “performance funding,” a new method of funding public institutions based not on inputs, such as enrollments, but on outcomes, such as retention, degree completion and placement.

Recommendations included more directly focusing funding dollars on high-needs fields and increasing success rates among at-risk students.

More information on the performance funding concept

Hearings this week: Updates on state’s fiscal condition, economy and Plan Maryland

Monday, January 23

Senate Budget and Taxation Committee
House Appropriations Committee
Joint hearing, Legislative Services Hearing Room

• 1:30 p.m. -- Update on Maryland's Economy by the Federal Reserve Bank
• 3 p.m. -- Fiscal Briefing by the Department of Legislative Services

Tuesday, January 24

House Way and Means

• 11 a.m. -- Briefing, Gaming – Update on VLT Implementation
  
• 2 p.m. -- Fiscal Briefing, Department of Legislative Services

Wednesday, January 25

Senate Budget and Taxation

• 3 p.m. -- University System of Maryland's University of Maryland, College Park and University of Maryland, Baltimore Merger Study

Thursday, January 26

House Environmental Matters

• 10:30 a.m. -- Briefing, Plan Maryland
  

Complete schedule of upcoming General Assembly hearings.

Best wishes,

Donald C. Fry
GBC President & CEO

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