Senate kills 'green fund' bill, looks to January

The Baltimore Sun

Efforts to pass a "green fund" tax to pay for Chesapeake Bay cleanup during the Maryland General Assembly's special session were thrown into limbo yesterday when Senate leaders said they would study an alternative in January.

Senate President Thomas V. Mike Miller said he opposes the bill as written, which would impose a fee of about $20 on all homeowners in the state to raise $85 million a year. The money would be used for farm fertilizer runoff control, improvements to urban storm-water management systems, stream reconstruction and other projects.

Instead, Miller said yesterday that he plans to work this winter with House leaders and Gov. Martin O'Malley to create a "Chesapeake Bay 2010 Trust Fund," which would raise $30 million to $50 million a year through unspecified means.

"There are concerns about the green fund bill, the tax aspect, and how the monies are being spent," said Miller, a Democrat who helped kill a similar proposal last year.

After hearing from experts he hopes to assemble in January, Miller said he will work with the other state leaders to figure out a way to raise the money.

"What we hope to do is have the governor, speaker and myself get together to produce ... a trust fund in a lock box for the Chesapeake Bay," Miller told reporters at the State House. "I believe something is going to pass," but he added that he was "not sure it will be called the green fund."

The green fund bill, endorsed by the Chesapeake Bay Foundation and other environmental groups, would impose annual fees of 1 cent per square foot on parking lots statewide, as well as about $20 a year on every homeowner in the state.

The money would be collected by local governments, which could keep 45 percent of the funds if they use them to fix leaky storm-water systems. The rest of the money would be doled out to state agencies for a variety of pollution-control projects, according to a formula that would give 50 percent to the state's environmental agency, 40 percent to agriculture and 10 percent to the Department of Natural Resources.

The green fund is supported by House Speaker Michael Busch, O'Malley and the Home Builders Association of Maryland, among others. It won the support of developers by dropping penalties for sprawl.

But the bill is opposed by the Maryland Chamber of Commerce and other groups that represent industries and owners of large commercial properties. During a hearing yesterday, those groups said the state already heaps too many taxes on businesses.

"It's not the time to put another tax burden on the business community," said Heather Hamilton, vice president of government affairs for the Maryland Chamber of Commerce. "The extent that Maryland is placing these new burdens on businesses is putting them at a competitive disadvantage."

Kim Coble, Maryland executive director of the Chesapeake Bay Foundation, said Miller's announcement yesterday would delay the legislation but in the end could mean a good cleanup funding program.

"The good news is we have a Senate president acknowledging that we need dedicated funding for bay restoration," Coble said. "We feel that this is urgent. ... We don't see why we need to wait. But we are very pleased to see he wants to create a dedicated fund for the bay."

Yesterday, O'Malley's administration endorsed the creation of a green fund. But during a hearing of the House Environmental Matters Committee, two of his Cabinet secretaries said the support is contingent on a proposed amendment that would allow O'Malley and future governors to decide where the money goes.

Instead of being doled out to state agencies according to strict quotas, O'Malley wants to control the cash through a computerized data analysis called "BayStat."

"We share with you the renewed sense of urgency for the restoration of the Chesapeake Bay," said Maryland environment secretary Shari T. Wilson. But she added: "We are trying to target the expenditures, for accountability."

The bill is sponsored by the environmental committee chairwoman, Del. Maggie L. McIntosh, a Baltimore Democrat who said her committee probably won't accept O'Malley's amendment as it is written. But she said the committee will likely work out a compromise that gives the governor some flexibility with the funds.

"You can't just say, here is a great big new special fund -- and then figure out day-to-day and month-to-month how to spend it," McIntosh said. "You have to have some framework to where it's going."

Three years ago, Gov. Robert L. Ehrlich Jr.'s administration helped create a "flush tax" to reduce a different kind of pollution: discharge from sewage treatment plants.

Del. Anthony J. O'Donnell, a Republican, said yesterday that it's a bad idea to approve the O'Malley administration amendment.

"It looks like an amendment that says, 'Take this on faith. We'll tell you how we spend this money later,'" O'Donnell said.

State Natural Resources Secretary John R. Griffin said funneling the money through O'Malley's "BayStat" analysis program will allow extra scrutiny by the administration and permit anyone from the public to see how the money is being spent.

"We are not asking the legislature to write a blank check to the governor," Griffin said.

State Sen. Joan Carter Conway, chairwoman of the Senate Education, Health and Environment Committee, said of the green fund that "conceptually, it's a good bill. ... But I don't believe it will move in the special session" this month. "We will address the issue in January."

Today in Annapolis

The Senate Budget and Taxation Committee will meet this morning to hold a work session on Gov. Martin O'Malley's legislation to eliminate a projected $1.7 billion shortfall in next year's budget, a blueprint which includes a proposed referendum on legalizing slot machines and several other measures to raise money for transportation projects.

Also this morning, the House Ways and Means and the House Appropriations committees are meeting to hear several bills that have been introduced during the special session. They include measures to give Baltimore City and other relatively poor jurisdictions a greater share of state grant dollars; and to increase the state tax rate for alcoholic beverages from $1.50 to $5.25 per gallon for distilled spirits, from 40 cents to $1.40 per gallon for wine, and from 9 cents to 31.5 cents per gallon for beer.

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