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Maryland Gov. Larry Hogan's 'modest' plan to cut fees proves controversial

Maryland's governor wants to cut a utility fee by 15 cents. Even that will mean a fight in Annapolis.

Maryland Gov. Larry Hogan wants to cut $71 million in fees over the next five years, including one that would save utility customers about 15 cents a month.

But the Republican's plan to pay for the relatively small break is on collision course with leading Democrats, who want to use the same pot of cash to create more clean-energy jobs.

The conflict sets up yet another front in the ongoing battle over how to spend the first state surplus in nearly a decade, and illustrates how even mundane initiatives can become partisan fights.

"It's why I wanted to hurry up and spend it," said Del. Dereck Davis, House Economic Matters Committee chairman and a Prince George's County Democrat who is pushing the jobs proposal.

"It was out there like a sore thumb," he said of the contested pool of money. "You could see this coming. … We need to do utility rate reductions whenever we can, but if it's going to be minuscule, it's better to do more to create jobs."

The governor has proposed reducing a dozen fees, including eliminating the $50 charge for a handgun permit and cutting in half the charges for vanity license plates, birth certificates and fishing licenses.

The fees were identified for cuts because they met two criteria: they were increased under Hogan's Democratic predecessor, former Gov. Martin O'Malley, and could be reduced without causing administrative headaches, said Joseph M. Getty, the governor's lobbyist.

"Citizens were overburdened," Getty said. "These were selected in terms of increases that occurred during the O'Malley administration that, with more efficiency in government and better management of programs, we could reduce."

Having a policy targeting a political foe's record hit a nerve with some Annapolis Democrats.

The focus on O'Malley-era fee increases led Del. Maggie McIntosh, who chairs the House Appropriations Committee, to dismiss the fee reductions as "political."

Other Democrats say the governor's plan could jeopardize one of their top priorities — increasing the percentage of electricity that comes from renewable sources.

They hope with greater demand for jobs in that industry, they can use $40 million in the Strategic Energy Investment Fund to pay for job training programs, particularly in Baltimore.

Hogan has proposed taking $10 million from that account to replace the money that would be lost by reducing a monthly residential utility surcharge, which a Public Service Commission spokeswoman said would amount to about 15 cents per customer.

"The governor's offering a one-year political gimmick," said Sen. Richard S. Madaleno, a Montgomery County Democrat. "We're offering a long-term plan" for job creation.

Hogan ran for office in 2014 on a promise to roll back taxes and fees that were increased during the O'Malley years. His political organization, Change Maryland, tallied as many as 40.

This summer, the governor reduced about 100 fees by executive order, but he needs the legislature's approval to whittle others.

Matthew Clark, Hogan's spokesman, dismissed the idea that the fee reductions would be symbolic, though the governor has described them as "modest."

Clark said it was a start. "Most hardworking Marylanders will agree that every single penny counts," he said.

Hogan's approach marks a reversal from the philosophy under the state's last Republican governor, Robert L. Ehrlich Jr., who called for government services to be funded by fees paid by people who used those services. Hogan served as Ehrlich's appointments secretary.

"What we believed was it was better to give money back to taxpayers with a tax cut rather than a fee reduction," said Del. Robert L. Flanagan, a Howard County Republican who served as Ehrlich's transportation secretary.

For instance, when Ehrlich and Flanagan sought $165 million for transportation in 2004, most of it came from a fee rather than from increasing the gas tax. The government raised about $150 million by increasing the vehicle registration fee from $81 every two years to $128.

Flanagan said he supports Hogan's efforts to put money in citizen's pockets, however it's done.

"If I had to choose between giving money back to citizens of Maryland or keeping it to fund state government, I would go with our governor to give it back," Flanagan said.

Del. Kumar Barve, a Montgomery County Democrat who chairs the House Environmental Matters Committee, doubted these fees could be reduced without citizens being forced to pay for them in another way.

The fees for fishing licenses and other permits "are important for us to be able to regulate sport and commercial fishing. These are important function of government and would hurt [state agencies] if we lowered them," he said.

While there was controversy when the license fees were first increased, advocates now say they don't mind paying $20.50 a year to fish in freshwater streams or $15 a year to fish in the Chesapeake Bay.

"Over the years you get used to it," said Dave Smith, executive director of the Maryland Saltwater Sport Fishing Association. "I don't believe the general consensus of our angler is that the fees are too high."

Smith said when the fishing license fees were last raised, the increase came with an assurance that the extra money would get a dollar-for-dollar match from taxpayersand the whole pot would be spent on conservation programs. He said he hoped any fee reduction wouldn't also deplete resources for conservation.

A gun rights group offered tempered enthusiasm for Hogan's proposal to eliminate the $50 application fee to get a handgun permit. John H. Josselyn, lobbyist for the Associated Gun Clubs of Baltimore and a member of the group, likened it to a poll tax for exercising Second Amendment rights.

But he said that eliminating the fee doesn't do anything to address what his group sees as the bigger issue: having to get a permit in the first place.

The fee should be repealed, he said, because it "only exacerbates the situation as it disproportionally impacts the poor and minorities."

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