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Marylanders to feel impact of legislative session
The picturesque dome atop the State House in Annapolis is a bit like a bubble, isolating hundreds of legislators and lobbyists from the constituents they’ve pledged to serve.
But after 90 days of drafting bills, splicing in amendments, holding hearings and navigating the political waters, the art of legislating gives way to the real test: how those new laws affect Marylanders.
Some people will breathe a sigh of relief: the low-wage worker who sees his paycheck grow, the chronically ill patient who can finally access treatment, the struggling parent who can now set her child on a path to educational success.
For others, the changes are more complicated: the employer reworking his labor budget, the day care owner improving her offerings to compete.
These are some of their stories.
A couple of weeks ago, Penni Day of Annapolis had doubts that legislation would pass expanding medical marijuana access. She and her husband started looking for apartments in San Diego.
“It was sort of a move-or-die thing,” she said.
But in the last hours of the General Assembly session, legislators passed a bill that will allow any physician to order marijuana for medical purposes. Day plans to apply for a patient identification card that will allow her to use the drug legally.
Day has Stiff-Person Syndrome, a rare neurological disorder that causes her muscles to spasm at any time, triggered by noises, touch or other stimuli. The spasms have already damaged multiple disks in her back and caused nerve damage.
Day is on 37 prescriptions to deal with her disease, including Valium and Oxycodone. Health insurance helps with the cost, but she is more worried about the risks of using the drugs.
“The addiction rate for all of my drugs is ridiculous,” she said. “I would much rather find marijuana or a marijuana derivative than be on narcotics.”
Soon, that will be possible.
Day used marijuana tincture for about three weeks recently, and she had no spasms during that time. She completely stopped taking Valium.
“I’ve tried to make something of my life after being sick,” she said. “We’re not potheads. That’s the biggest hurdle we will have to get over is that stereotype.”
Expansion of pre-K
Thanks to $4.3 million set aside in fiscal 2015, about 1,600 more 4-year-olds from low-income families will be able to enroll in publicly funded pre-kindergarten. The state already provides pre-K to about 27,000 economically disadvantaged children, but the new law expands income eligibility.
Child care experts say pre-K is crucial to educational success down the line and that getting low-income kids into quality programs can make an enormous difference in their lives.
But it also means some private-sector programs might feel the pinch — more seats in public pre-K classrooms could reduce demand for seats that charge tuition or spots in child care centers.
For now, that side effect will likely be minor, experts said, because the expansion was modest and will be spread across the state. But if Maryland continues down its path toward universal public pre-K, the impact on private providers could be substantial, particularly for day care centers in low-income areas, such as Holabird Early Learning Center in Dundalk.
“The wealthy parents, they’ll still send their kids to private preschools,” owner Charlonda James said. “But around here, if there are more public school slots, parents would definitely choose the free route rather than pay to come here for day care.”
But James said even though state-funded pre-K could hurt her business, she fully supports the expansion.
“A lot of students are staying home because their parents can’t afford anything,” she said. “Children need to be around other students. And at the end of the day, it matters what happens to the children, not what happens to me.”
It’s no secret that Maryland’s minimum-wage law will affect low-wage workers, however slowly it may do so.
The law will gradually raise the minimum wage from $7.25 to $10.10 per hour, with the first increase taking effect in January 2015. It included some notable compromises, such as a lower training wage for workers under 20 and exemptions for some restaurants and cafes.
But even employers who have no minimum wage workers are bracing for the effects of the law.
“My anticipation is that our wages will go up,” said Bob Phillips, president of Maryland-based restaurant chain California Tortilla. “If you raise the base, everybody’s going to be going up. … It will probably have an inflationary effect.”
Phillips said that his employees make more than the minimum wage, but the new law raises the bar for all employee wages.
Even without the Maryland legislation, California Tortilla would have faced a new minimum wage for Montgomery County, where it is headquartered and has six restaurants. The County Council voted in November to gradually increase the minimum to $11.50 by 2017, with the first increase in October.
Direct-support caregivers
Tied to the minimum-wage bill is a provision to boost the reimbursement rate paid by the state to providers that serve developmentally disabled Marylanders. The provision ensures providers can pay wages about 30 percent higher than the minimum wage — even after the rate rises to $10.10.
“These aren’t easy jobs — these support staff are bathing people, changing people, helping feed them. We need to make sure these jobs remain attractive,” said Martin Lampner, president of Chimes International LTD, a nonprofit provider of services for disabled people.
Chimes Maryland employs about 900 caregivers. Lampner estimated 40 to 50 percent of them might have quit if provider reimbursement rates hadn’t been raised.
One of those workers, Cori Daniels, said the wage hike will make it easier for her to stay in a job she loves. The 43-year-old mother of two teenagers often works overtime, as do her colleagues, “but it’s still tough to make ends meet,” she said.
“There’s high turnover because it doesn’t always pay enough, like for young people starting a family,” Daniels said. “So if you don’t love it, you leave. But people are willing to stay if they’re getting paid better than they could at some job flipping burgers.”
Estate tax
Recoupling Maryland’s estate tax with the federal rate will have an impact on more than just the extremely wealthy, according to experts.
The Maryland General Assembly approved a bill increasing the estate tax exemption to $1.5 million next year, $2 million in 2016, $3 million in 2017, $4 million in 2018, and the rate recouples with the federal level in 2019.
Mary Beth Beattie, chairwoman of the Maryland State Bar Association’s Estate and Trust Law Section, said this change will have an impact on residents who may not be thought of as outlandishly wealthy. She said where she practices in Montgomery County, many people carry $1 million in life insurance, have an IRA and own a valuable home that pushes their estate’s assets over Maryland’s current threshold.
“So it doesn’t take much for a sort of everyday working couple to have well over $1 million,” she said.
The bill will also make estate planning easier for residents with less than $5 million in assets, $10 million for a couple, and will reduce the reliance on devices such as trusts to protect assets.
“Once the Maryland tax has recoupled with [the federal level], that kind of planning is going to be much more simplified,” Beattie said.
Deficiency judgment
Time will tell whether shortening the timeline lenders have to file a deficiency judgment will help or hurt residents that have homes foreclosed on.
The General Assembly approved a bill shortening the time frame in which a lender can seek a deficiency judgment from 12 to three years, and limits the date to file a deficiency judgment on homes currently in foreclosure pipeline to July 1, 2017. A deficiency judgment can be sought against a homeowner if the foreclosure sale doesn’t cover the balance of the loan or any accrued interest.
Consumer advocates argued allowing such a long window hurt residents because banks could file to recoup the debt just as they were starting to emerge from a difficult financial period and cripples their ability to buy another home.
But opponents of the bill, such as the Maryland Bankers Association, argued that limiting the window may result in banks feeling the need to file for deficiency judgment because they won’t have time to review each situation.
There were 120 deficiency judgments sought in 2012 and 57 in the first quarter in 2013. But that number could rise because Maryland has experienced an increase in foreclosure activity for the seventh straight quarter. There were 12,589 foreclosure filings in the first quarter of this year.
