Municipal and county groups warn Eastern Shore delegation of budget shifts, housing preemption and unfunded mandates

Representatives from the Maryland Municipal League (MML) and Mako told the Eastern Shore delegation on Jan. 23 that local governments on the Shore face near-term fiscal risks from state budget choices and warned that elements of the governor’s housing package could preempt local control.

Justin Furey, director of advocacy and public policy for the Maryland Municipal League, said municipalities rely heavily on property taxes and that MML will pursue a task force (sponsored by Ways and Means chair Janelle Wilkins) to study diversified revenue options. "Our core challenge really is our overreliance on property taxes to pay for essential services," Furey said, describing task force aims to explore tax differentials and other revenue sources.

Michael Sanderson, director at Mako, told the delegation that counties face budget pressures including near-term cuts and shifted costs. He warned of a looming drop in highway user revenues that could exceed "more than a $100,000,000 a year" without legislative action and described pension and retirement-cost shifts that will require county contributions. "We're in that year to do so," Sanderson said of the effort to secure highway user revenue; Kevin Canale added that much of the governor's reported $380,000,000 in 'local aid' growth is education funding that counties do not control.

Mako also highlighted housing legislation in the governor’s package and urged local attention to where any preemption would apply. A Mako representative flagged "Senate bill 36, house bill 239" (referred to in the meeting as the Starter and Silver Home Act) and described it as, "as drafted, it's a pretty significant preemption on local land use," noting the group is advocating limits so that urban-core changes do not unintentionally apply to rural Eastern Shore communities without sewer and water capacity analysis.

Delegates raised multiple follow-ups: whether expanded 311 and assisted outpatient treatment (AOT) would create county costs, how much pension costs will be billed to counties this year (delegation was told roughly $39,000,000 in new county invoices), and whether the Walter Lomax Act change that placed partial liability for wrongful-conviction payments on counties will be reversed. Mako described the Walter Lomax change as added via staff-level budget language and called the county billing proposal "bonkers public policy top to bottom," and said it will pursue corrective legislation.

Why it matters: counties and municipalities on the Eastern Shore have limited revenue options and are watching state budget moves that shift costs to local governments. Delegation members and MML/Mako speakers stressed the need for coordinated follow-up with the administration and the General Assembly to avoid unfunded mandates.

MML and Mako asked the delegation for support in upcoming hearings and indicated they will be back with additional briefings, including a DLS fiscal briefing scheduled Feb. 6 and a housing panel on Feb. 13 focused on on-the-ground capacity and local housing providers.

The meeting recorded no formal votes on MML or Mako proposals; staff and lobby representatives offered to follow up with counties and delegation staff for legislative strategy and technical analysis.