Governor Larry Hogan Signs Fiscal Responsibility Bill into Law
Also Signs Pension Relief for School Boards
ANNAPOLIS, MD – Governor Larry Hogan today was joined by Senate President Thomas V. “Mike” Miller and Speaker of the House Mike Busch for the second bill signing ceremony at the State House in Annapolis.
“Today, I am proud to sign legislation that will help ensure Maryland’s fiscal stability in years when revenues are less than projected,” said Governor Hogan. “I’d like to thank the majority leadership for working with us in a bipartisan way to enact meaningful, common sense budget reforms.”
The governor today signed HB 503 – State Budget – Appropriations – Income Tax Revenue Estimate Cap and Revenue Stabilization Account. The legislation incorporates the governor’s Fiscal Responsibility Act of 2017, which places a cap on the estimate of non-withholding (e.g. capital gains) revenues assumed in the budget process. This cap is designed to reduce revenue volatility by ending the practice of using temporary revenue spikes to fund known recurring future expenses. It will also create a process whereby excess state income during years with a revenue surplus will be automatically moved into the Rainy Day Fund to make that excess revenue available for use in years where revenues are less than projected.
This bipartisan legislation is based on recommendations from a joint report by the Department of Budget and Management, the Department of Legislative Services, and the Office of the Comptroller.
The governor also signed HB 1109 – Teachers’ Retirement and Pension Systems – County Boards of Education Payments. This legislation reduces public school pension costs by nearly $20 million in response to an unanticipated cost issue this year. This legislation will provide a one-year suspension of the local administrative costs incurred by the pension system. The State will fund the difference ensuring that the pension system remains secure. This legislation was part of a bipartisan compromise between Governor Hogan and the presiding officers to provide incentives for Marriott and Northrop Grumman to remain and expand in Maryland.