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2022 Maryland Works Legislative Overview
The 444th Session of the Maryland General Assembly is underway in Annapolis. It’s the final year of a tumultuous four-year term that’s witnessed new presiding officers for both the House and Senate, the appointment of seven new committee chairs, and a legislature continuing to deal with the challenges raised by the ongoing COVID-19 pandemic. With 2022 being an election year, this year marks the eighth and final year in office for Governor Larry Hogan, who is term limited. In addition, all 188 seats in the Maryland General Assembly will be up for grabs this November.
The dominant issue of this year’s Session will be the unprecedented State budget surplus. Maryland is flush with cash after two years of federal stimulus and unexpected economic growth, resulting in a $4 billion surplus that provides the State with the unique opportunity to invest resources toward unmet needs and priorities. Governor Hogan’s proposed $58.2 million budget includes the elimination of all state income taxes for retirees, and increases funding for several safety net programs, including more money to help pay utility bills, support child care workers, and provide food assistance to seniors and children. Additionally, Governor Hogan has set aside historic amounts of money to enhance Maryland’s state parks and strengthen the State’s Rainy Day Fund.
It is expected the legislature will look to further enhance public school construction funding, fund other long-term issues, as well as proposing additional tax relief proposals.
Other major issues expected to be debated this Session include legislative redistricting, the legalization of recreational cannabis, broad legislation addressing climate change, as well as the State’s response to the myriad issues related to the ongoing COVID-19 pandemic.
In the Maryland Senate, procurement law and legislation related to Maryland Works and the State’s program for preferred providers will now be overseen by the Senate Budget and Taxation Committee. As the committee will likely use this year to become better educated on procurement issues, major changes to procurement law are not expected this year.
Budget Outlook
- The outbreak of the COVID-19 pandemic precipitated a deep but relatively brief contraction in the U.S. economy. Employment in Maryland fell 6.8% in calendar 2020, but wage growth was slightly positive. General fund revenues exceeded expectations in fiscal 2021 by $1.7 billion, and the estimate for fiscal 2022 was initially revised up in September by $995 million. On December 14th, those estimates were again revised upward, this time by an additional $543 million. The bulk of the increase is attributable to income tax collections from tax year 2020, as well as higher sales tax receipts and growth in the tobacco tax.
- The latest revision follows the Board of Revenue Estimates (BRE) actions in September that also anticipated an additional $1.37 billion in revenues for fiscal 2023. That came days after Maryland closed the books on Fiscal Year 2021 with a $2.5 billion general fund balance. All told, it means state budget writers and policymakers have roughly $6 billion in unanticipated revenue as they construct the FY 2023 state budget. This represents an unprecedented state budget surplus.
- Overall, Maryland is still feeling the positive effects of federal relief aid flowing into and through the economy. The BRE believes the economic growth is relatively sustainable, but expects there are likely to be some future hiccups with course corrections to capital gains and business income and likely stock market declines at some point in the future.
Legislative/Emerging Issues
- COVID-19. After dominating much of the health care policy debate during the 2021 Session, legislators are again expected to focus attention on the State’s management of the COVID-19 pandemic. This includes Maryland’s public health response, in particular dealing with breakthrough infections and the administration of additional and booster vaccinations. Employer vaccinations mandates and various aspects of the pandemic’s impact on Maryland citizens, such as Maryland’s safety net programs, will continue to be issues of concern.
- Energy and the Environment. Far-reaching climate change legislation is expected to be adopted during the 2022 Session. A potential compromise bill fell apart on the session’s final day which included: acceleration of the State’s greenhouse gas emission reductions; increased tree plantings; stepped up energy conservation requirements; efficiency improvements for existing buildings, environmental justice enhancements, and increased funding for targeted programs. All of this elements are expected to be part of the 2022 debate.
- Legalization of Cannabis. As the number of states that have legalized adult-use cannabis continues to grow, the legalization of cannabis remains a major topic of conversation in Maryland. The House Speaker has expressed support for a referendum on the 2022 general election ballot, and the House has formed a workgroup to study the issue. The Senate President has expressed support for a legalization without the referendum requirement. Medical cannabis is currently legal in Maryland.
Legislative Leadership Changes
- In less than 4 years, new presiding officers in both houses have been elected for the first time in a generation. The Republicans have likewise elected new members to lead both the Senate and House caucuses. Remarkably, in the same time period, nine of the ten standing committee chairs in Annapolis have been replaced or have announced plans to retire next year. A historic and truly meaningful changing of the guard in the legislature.
2022 Election Preview
- Next year, Maryland will have a new governor, attorney general, and comptroller. A new state treasurer, former Delegate Dereck Davis, was sworn in on December 17th. The Democratic gubernatorial primary race is led by Comptroller Peter Franchot, along with political newcomer Wes Moore, and former Obama Labor Secretary Tom Perez. On the Republican side, Commerce Secretary Kelly Schulz is expected to be the nominee.
- The Congressional redistricting map passed during a December legislative Special Session. The Legislative redistricting map is being finalized and will be introduced early in 2022 Session. All 188 state legislative seats are up for grabs in 2022.
Source: Manis Canning