Friday 5 | February 7, 2020

Did you know that Annapolis was known as the “Athens of America” for its wealth of cultural activities in the 17th century, and once served as the capital of the United States?

1. “The state of our state has never been stronger.” On Wednesday, Governor Larry Hogan delivered his annual State of the State address to the Maryland General Assembly. During his opening remarks, the governor touted Maryland policymakers’ ability to find middle ground in the face of bitter partisanship in Washington. He stated that Maryland has experienced one of the greatest economic turnarounds in the country, with more businesses open and more people working.

Additional highlights from the State of the State address include:

In the Democrats’ response, Senate President Pro-Tempore Melony Griffith addressed the following key policy areas as priorities for the caucus:

2. Mfume wins Democratic primary in race for Maryland’s 7th Congressional seat | On Tuesday, former U.S. Congressman Kweisi Mfume won the Democratic primary in the race for Maryland’s 7th Congressional district to succeed the late Congressman Elijah Cummings. Mfume, who held the seat prior to Cummings, is running on a platform that includes lowering the cost of prescription drugs, banning assault weapons and preserving Social Security. Mfume also supports the Green New Deal and believes that Congress should take more steps to mitigate the effects of climate change. He will advance to a special general election to be held on April 28 to fill the remainder of Cummings’ term. Mfume will face the winner of the Republican primary, Kimberly Klacik, a nonprofit founder whose video and tweets about conditions in West Baltimore garnered attention from President Trump last summer.

3. Paid family and medical leave legislation is introduced | Both the House and Senate have introduced legislation establishing a paid family and medical leave mandate. SB 539 / HB 839 would establish a Family and Medical Leave Insurance (FAMLI) program to be administered by the Division of Unemployment Insurance. The program generally provides up to 12 weeks of benefits to an employee who is taking partially paid or unpaid leave for the following reasons: 1) to care for a child during the first year after the child’s birth or after the placement of a child through foster care or adoption, 2) to care for a family member with a serious health condition, 3) the employee has a health condition that results in their being unable to perform the functions of their job, 4) to care for a service member who is the employee’s next of kin, or 5) because the employee has an exigency arising out of the deployment of a service member who is a family member.

The bill establishes the FAMLI Fund, which will consist of contributions from employees, employers and self-employed individuals. Beginning January 1, 2021, each employee, employer and self-employed individual shall contribute to the fund. The total rate of contribution: 1) may not exceed 0.5% of an employee’s wages, 2) shall be applied to all wages up to and including the Social Security wage base, 3) shall be shared equally by employers and employees, and 4) shall be sufficient to fund the benefits payable.

There are any number of additional nuances and complexities outlined in the language, and the Chamber is very concerned that the implementation of this legislation will result in additional costs and administrative burden to employers and particularly small businesses. Through our MDCC Paid Family & Medical Leave Workgroup, the Chamber has attempted to work with the advocates of this program to outline our concerns and encourage changes to the bill. Unfortunately, these changes, some of which align the bill more closely with federal law and seek to address some of the challenges for small businesses, were not accepted. The Chamber will continue to work with stakeholders toward a better outcome on this issue.

SB 539 has a hearing scheduled for Thursday, February 27, at 1 p.m. in the Senate Finance Committee. If you wish to share your concerns with the committee, please contact Ashley Duckman (aduckman@mdchamber.org).

4. Pimlico pushback | This week, Senate Budget & Taxation Committee Chairman Guy Guzzone introduced the Racing and Community Development Act of 2020.If passed, the bill would authorize up to $375 million in debt to rebuild Maryland’s largest racetracks and secure the Preakness Stakes’ home in Baltimore. The bill provides at least $180 million for Pimlico and $155 million for Laurel Park to be issued by the Maryland Stadium Authority, and subject to approval by the Board of Public Works.

The legislation reflects a deal reached last fall between the city of Baltimore and the Stronach Group, whereby the latter pledged to donate the track’s land in Northwest Baltimore to the city for development. It requires the state to pay $17 million per year from video lottery terminals for the repayment of the bonds—unlike the original deal, which would’ve switched the use of casino funds dedicated to horse racing to pay for the bonds. If the bill passes, the casino money set aside for horse racing would sunset and those funds would be steered to the state’s Education Trust Fund.

For his part, Governor Hogan has been critical of any plan that would divert education money to horse racing but has also said that he would like to see the Preakness stay in Baltimore.

5. Bill hearings next week | Next week will feature a marathon of bill hearings on tax issues that the Chamber is monitoring closely. Six of the most important are outlined below.

SB 397: Sales-and-Use Tax and Personal Property Tax—Exemptions—Data Centers

HB 129/SB 523: Income Tax—Pass-Through Entities–Imposition of Tax

HB 565: Income Tax–Business and Economic Development Tax Credits–Termination

HB 295: Corporate Income Tax–Combined Reporting

HB 473: Corporate Income Tax—Throwback Rule

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