Government Relations Archive

The 2008 session of the Maryland General Assembly ended at midnight on April 8. Here is a brief overview of the most important issues for independent higher education (as provided by MICUA):

• The FY 2009 operating budget includes $58.7 million for the Sellinger Program – an increase of four percent in the per-student appropriation and an adjustment for enrollment growth.

• The budget also includes $1.65 million for the Regional Higher Education Centers to provide funds to the Maryland Higher Education Commission (MHEC) to distribute for the basic operations of the centers and to provide incentive funds to encourage the development of new programs in areas of high-need.

• It also includes $3.6 million for BRAC initiatives to support academic programs that serve the military installations.

• The FY 2009 budget includes $109 million for student financial aid, a five percent increase over last year’s appropriation.

• The FY 2009 state capital budget includes $9 million for four MICUA member institutions (John Hopkins, Mount St. Mary’s, Loyola College, and Sojourner-Douglass College) – a $1 million increase over the Governor’s budget.

Summary of legislation that may impact independent colleges:
• House Bill 40 – requires employers to provide leave with pay for the illness of an employee's immediate family. The bill provides that an employee may only use leave with pay that has been earned.

• House Bill 133 – extends the work of the Commission to Develop the Maryland Model for Funding Higher Education. The bill also adds the Lt. Governor to the Commission's membership.

• House Bill 358 – requires the Department of Budget and Management to develop a searchable website that includes information on state financial assistance or expenditures in excess of $25,000 including all grants, loans, awards, and contracts.

• Several environmental bills passed, including bills to authorize grants, loans, and tax credits for projects to promote energy conservation and reduce the consumption of fossil fuels.

• House Bill 905 and Senate Bill 438 – these bills require public institutions of higher education in Maryland to develop and implement plans for programs of cultural diversity and require the independent institutions that receive funds under the Sellinger Program to submit certain information to MICUA. MICUA must submit a report to the Maryland Higher Education Commission on the efforts of the independent colleges and universities to promote and enhance cultural diversity.

• House Bill 942 – requires the colleges of medicine, nursing, pharmacy, and dentistry to submit a one-time report to the legislative committees and the Office of Minority Health and Health Disparities on courses that have been developed regarding cultural competency and health disparities.

• House Bill 1210 – prohibits credit card issuers from offering gifts in exchange for the completion of a credit card application at a college or university (including at athletic events).

• House Bill 1287 – establishes a student internship program to encourage students to explore opportunities in public service.

The Maryland Independent College and University Association (MICUA) provided the following summary of the Maryland General Assembly’s special session which adjourned on November 19, 2007.

The Maryland General Assembly passed the six bills introduced by the Governor with many amendments.

In aggregate, legislation passed during the Special Session raises about $1.3 billion in revenues and cuts the fiscal 2009 budget by about $550 million. The Budget Reconciliation Act reduces state appropriations in fiscal 2009 in four areas:

• Cuts state aid to local schools by altering the Thornton formula;
• Reduces utility grants provided to local jurisdictions;
• Reduces appropriations to Program Open Space; and
• Cuts overpayments to the Health Benefits Fund for state employees.

These specified cuts total about $330 million. In addition, Governor O’Malley must identify $212 million in additional cuts in the fiscal 2009 budget. The Sellinger Program is preserved with full funding. In addition, the General Assembly passed a provision within the Budget Reconciliation Act stating that funds appropriated to the public universities through the newly created Higher Education Investment Fund will be included in the formula used to calculate Sellinger grants. This provision will increase state aid under the Sellinger Program in future fiscal years.

The Budget Reconciliation Act contains a troubling provision stating the legislature's intent that the Governor consider legislation to "defer and alter formula mandates to slow the growth" in the state's baseline budget. This provision was added as a concession to the House Appropriations Committee, which tried to alter several mandated programs (including Sellinger) during the Special Session.

The General Assembly passed legislation proposing a constitutional amendment to authorize video lottery terminals (slots) at five locations in Maryland. This constitutional amendment will go to the voters during the General Election in 2008.

Several adjustments were made to the State's tax structure. The following is a summary of the major adjustments:

Income Tax:
The state income tax rate is increased to 5% for earnings over $150,000 (individuals) and $200,000 (joint filers); 5.25% for earnings over $300,000 (individuals) and $350,000 (joint filers); and at 5.5% for earnings over $500,000. In addition, the legislation includes an increase in personal exemption amounts and expands the refundable earned income tax credit for low-income Marylanders.

Sales Tax:
The sales tax rate increases from 5% to 6% and is expanded to include certain computer services, such as software planning and design, hardware and software installation, data recovery, and management services.

Titling Tax:
The titling tax rate is increased to 6%, but allows a reduction for the trade-in value of a vehicle. In addition, the vehicle title fee is increased from $23 to $50 and the cost to correct title certificates is increased from $20 to $50.

Tobacco Tax:
The tobacco tax is increased by $1.00 to $2.00 per pack.

Corporate Tax:
The corporate tax rate is increased from 7% to 8.25%. In the first six months (FY 2008), $16 million of this corporate tax revenue is dedicated to the Higher Education Investment Fund to reduce tuition at public universities and for capital projects at public universities and community colleges. In future years, about half of the increased corporate revenue is dedicated to the Higher Education Investment Fund. The Department of Legislative Services estimates that $50 million in corporate tax revenues will be dedicated to the Higher Education Investment Fund in FY 2009. These provisions will benefit the MICUA state-aided institutions by increasing the Sellinger grants in future years and by providing some relief in the Governor's capital budget program.

In addition, the General Assembly passed legislation requiring a study to evaluate the use of "combined reporting" to calculate Maryland taxable income by affiliated corporations.

Controlling Interest Provisions:
The General Assembly passed legislation imposing recordation and transfer taxes on the transfer of real property through the sale of a "controlling interest" beginning in FY 2009.

The General Assembly also passed legislation introduced by the Governor to expand Medicaid health care coverage for low-income Marylanders and to provide incentives for small businesses to offer health care insurance to employees. In addition, the General Assembly passed a provision to create a Chesapeake Bay Trust Fund to support programs to clean up Maryland's bays and rivers.

The Maryland General Assembly adjourned sine die at midnight on April 9.

The FY 2008 Operating Budget included full funding for the Sellinger Grant Program. In total, the MICUA member institutions will receive an almost 18 percent increase in state aid over the FY 2007 appropriation. (The Sellinger funds per institution ultimately depend, though, on full-time equivalent enrollment for the Fall of 2006.)

The General Assembly cut the Governor’s allocation for the University of Maryland System and Morgan State University by approximately $2.2 million. The outcome of this is an increase in state aid for public universities of 6.7 percent. In the end, the state’s student financial aid programs saw a decrease of $1.2 million, leaving $110 million in remaining funds.

The four MICUA capital projects totaling $8 million were also approved.

The General Assembly failed to pass any legislation to deal with the state’s future structural budget. It was reported that the Governor plans to balance the budget using the state’s “rainy day” fund to pay for increases in education and health care, but no reserve funds will be available next year to correct the $1.5 billion structural deficit that is projected. Senate President Thomas Mike Miller is reported as saying that he believes next year’s budget will include cuts, tax increases, and slot machine revenues.

For additional information on the top legislative issues affecting independent colleges and universities in Maryland, visit the MICUA web site: http://www.micua.org/legaffairs.htm

The State has adopted a 29.4 billion operating budget, which contains substantial increases for higher education.

• The Sellinger Grant Program for Maryland’s independent colleges has been fully funded at $50 million -- a 9 percent increase over FY 2006.

• For the first time, independent colleges with teacher preparation programs will receive state grants to support them.

• The appropriation for student financial aid is approximately $109.5 million -- a 14.7 percent increase over last year. Need-based financial aid will increase by about 25 percent.

Following is a list of some of the bills considered this session that impact private colleges:

• There was a bill that will take effect in January 2007 prohibiting any employer from printing a social security number on a wage payment document.

• A Voter Bill of Rights was passed by both chambers and then was vetoed by the Governor. The veto was overridden by the General Assembly and became law on April 10. This bill requires local boards of election to establish polling sites on both public and private university campuses if at least 500 faculty, students, and staff are registered to vote. Any college or university receiving state aid (including Goucher) will be required to provide a facility and recruit volunteers to staff these sites.

• The Maryland Stem Cell Research Fund was passed to promote State-funded stem cell research and cures through grants and loans to private and public entities.

• Companion bills passed both the House and Senate to create a commission that will be charged with developing a model for funding higher education. The Commission is composed of 27 members, and includes the President of Johns Hopkins University and the President of MICUA (Maryland Independent College and University Association.)

• The General Assembly passed a bill to extend the $6.15/hr. minimum wage bill to public agencies, including public institutions of higher education. A similar bill was passed last session for private entities, including private colleges and universities.

• A number of bills were introduced that would impact academic freedom on campus, but these bills encountered strong opposition and they will not become law.

Status of Sellinger Aid

The Governor's budget fully funds the Sellinger Program in FY 2007. In addition, we are told that members of both budget committees strongly support the independent institutions and the Department of Legislative Services (DLS) has not recommended any reductions. A decision by the Senate Budget and Taxation Committee and the House Appropriations Committee is expected within the next two weeks.

Increase in Financial Aid Funding

The FY 2007 budget contains $17.7 million in new financial aid funds, mainly for need-based programs. The increase includes $15 million in additional funds for the Education Assistance (EA) program and $2.3 million in funds for the Guaranteed Access (GA) program.