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Some state agencies want more of your money

Proposed fee increases would affect Marylanders from cradle to grave

By Michael Dresser, The Baltimore Sun

3:48 PM EST, March 3, 2012

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If you hold a gathering of more than 50 boats in Maryland waters after June 1, you can expect to pay a "marine gathering permit fee" — the amount yet to be determined — under legislation proposed by the O'Malley administration.

Need a certified copy of a marriage certificate? The cost would double from $12 to $24 under an administration proposal. Own a commercial scale with a capacity of more than a ton? The fee for registering it would increase from $75 to $100 under a bill submitted by the state Department of Agriculture.

In addition to the well-publicized tax increases that Gov. Martin O'Malley is proposing this year, his Cabinet agencies want to raise a wide range of fees for services — from recording an adoption to obtaining an initial copy of a death certificate.

Some of the proposed fee increases would affect millions of Marylanders — notably a doubling in revenue collected from the water usage fee often dubbed the "flush tax" and a $2 increase in a motor vehicle registration surcharge that supports emergency medical services. Others would affect hunters, parents of newborns and users of prepaid cellular phones.

Raquel Guillory, O'Malley's press secretary, said this year's list of proposed fee increases is similar in scope to those of other years and other administrations. "At some times, a fee increase is needed to provide the services Marylanders expect from their government," Guillory said.

But many Marylanders might not like it.

"Paying anything for government goods and services has become conflated with taxes," said Donald F. Norris, chairman of the department of public policy at the University of Maryland, Baltimore County. "The real problem is, people don't want to pay anything. They want it free or as close to free as possible."

To raise fees, O'Malley needs the approval of the General Assembly, which typically agrees to some and declines to go along with others. Fees are a particularly hard sell this year because legislators are also grappling with far-reaching tax proposals from the governor, including higher income taxes for the top 20 percent of earners and an extension of the state's sales tax to gasoline.

It doesn't help that O'Malley, a Democrat, took Republican former Gov. Robert L. Ehrlich Jr. to task for fee increases in the past two elections.

Among the groups that could be facing new or higher fees:

•Maryland hunters ages 16 to 65, who would see the cost of a basic license increase from $24.50 to $40. The cost of a stamp to hunt migratory birds would rise to $12 from $9. The money would go to wildlife conservation programs.

•Users of prepaid cellular service, who would have to pay a 60-cent fee each time they buy phone time. The fee would support emergency wireless 911 service. (Users of non-prepaid cell phones already pay a fee for that.)

•Parents of newborns or their insurers, who would pay $90 rather than $70 for a series of optional but highly recommended tests conducted at the state medical lab to detect problems.

•Purchasers of foreclosed homes, who would have to pay a $50 registration fee.

•Parents processing adoption registrations, for whom the fee would go from $12 to $24.

•Drivers appealing a license suspension or revocation, who would have to pay $150 instead of $125.

Some fees would affect only a few businesses. For instance, according to the state health department, a new licensing fee of $1,500 would apply only to the state's 12 to 15 surgical abortion centers. One fee is so narrow that it would likely be paid by only one company in the coming year — a bank that wants to change its form of governance. That $5,000 fee is intended to defray the state's cost of processing the application.

Not every fee-related bill is calling for an increase, however. A bill requested by the Department of Labor, Licensing and Regulation would waive reinstatement fees for members of the military whose professional licenses lapse during an out-of-state deployment. And for 128 truck drivers licensed to haul controlled hazardous substances, a $20 annual fee would go away.

But most of the proposals are for increases or new fees. Some have been met with protests from those who would have to pay them. Perhaps most vocal have been boaters, who for three decades have had to pay a relatively modest $24 licensing fee every two years — significantly less than in most neighboring states charge when all taxes are considered.

This year, faced with the mounting costs of dredging Maryland waterways so they don't silt up and become unnavigable, the state Department of Natural Resources is seeking a series of increases on a sliding scale that would charge more for the biggest boats.

The operators of a 24-foot boat would see the fee increase to $75 this year and $125 two years later, while the owner of a vessel longer than 65 feet would pay $350 and then $700 starting in 2014. Besides dredging, the fees would help pay for maintenance of boat ramps and marine safety programs.

Though the administration says it plans to scale back some of the increases before a March 16 bill hearing, the proposal has given an opening to O'Malley's political foes, who have teed off on the plan.

"There may be a false perception that boat owners in our state can easily afford a fee hike," state Sen. Nancy Jacobs, a Harford County Republican, said in a news release. "But I think the majority of them are not well-heeled and prioritize their spending to keep their love of boating alive."

Norris said Republican orthodoxy has held that fees are a better way to pay for government services than taxes because — at least in theory –– they are paid by the users of a specific service. As an example, he pointed to admission fees charged for entry to state parks.

"Not everyone's going to consume that, so why should everybody pay for it?" Norris asked.

In 2004, faced with a pressing need for transportation revenue, Ehrlich proposed a package that included a near-doubling of the motor vehicle registration fee. Republican lawmakers, loyal to a governor of their party and relieved that he hadn't proposed a gas tax increase, voted overwhelmingly in favor of the package.

Ehrlich also originated the $2.50-a-month fee that finances the Bay Restoration Fund. Many Democrats applauded that decision — but not before hanging the "flush tax" label on it and making sure that the fee applied to homes on septic systems as well as those on public water and sewer.

The fee increases would come back to haunt Ehrlich. In 2006 and 2010, O'Malley, moving to counter Ehrlich's portrayal of him as a "tax-and-spend" liberal, ran effective campaign ads hammering his Republican opponent over fees. O'Malley won both times.

Republicans have absorbed that message and now are turning it against the governor.

"A fee is a tax, a tax is a fee, and this governor doesn't seem to know a fee or a tax he doesn't like," said Senate Minority Leader E.J. Pipkin, an Upper Shore Republican. He said he thought O'Malley had promised not to raise fees — something administration officials say he never did.

"The governor never makes sweeping statements like 'I'll never raise a fee,'" Guillory said. She said O'Malley criticized Ehrlich over the use of large fee increases as a substitute for a rise in taxes, not for routine departmental charges.

Fee-increase bills roll into the Assembly every year. Last year brought increases in fees for probation supervision, birth certificates and vanity tags, among other things.

In some cases, as with most of the fees proposed by the health department, the service must be provided by law. For instance, if the costs of newborn screening are not covered by the fees, taxpayers would have to pick up the tab, according to Deputy Health Secretary Fran Phillips.

In other cases, tax dollars are not an option, state officials say. The boating fee proposal is a case in point.

Bob Gaudette, director of boating services for the Department of Natural Resources, said the state has seen its revenues from a vessel excise tax decline by half in the economic downturn. At the same time, he said, the Army Corps of Engineers has essentially handed off the responsibility for dredging of shallow waterways used for recreational and commercial fishing to the states.

If the department doesn't get the fee revenue it's asking for and another source of funds is not identified, Gaudette said, dredging would be cut back and waterways would silt up — creating dangers to navigation and problems for businesses that depend on those channels.

"We don't like people running aground. And people don't like running aground," he said. "Some boaters see it as just another fee, and they're focusing on the fee rather than the need."

michael.dresser@baltsun.com

Selected fee increases proposed by state agencies

•Hunter's license, now $24.50 for state residents, would rise to $40.

•Maryland migratory game bird stamp would rise from $9 to $12.

•Initial copy of a death certificate, now $12, would cost $24.

•Users of prepaid cellular phones would pay new 60-cent fee to finance 911 network.

•Registering a motorized boat of 16 to 32 feet would rise to $75 from $24.

•Nonmotorized boats would need $12 decal.

•Owners of septic systems would pay $5 a month toward bay restoration, up from $2.50. Many users of public water and sewage systems also would pay a higher "flush tax," depending on usage.

•Surgical abortion centers would face new state fee of $1,500.

Sources: Governor's office; General Assembly