Maryland Bar Bulletin
Publications : Bar Bulletin : December 2009

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State Budget / Maryland Economy

Even as the final gavels struck on sine die in the Senate of Maryland and the House of Delegates to end the 2009 Maryland General Assembly session, legislative leaders knew that when they returned for the 2010 session, the budgetary outlook would be even gloomier than what they had faced in the previous 90 days. While the General Assembly did manage to pass a balanced budget, as mandated by the Maryland Constitution, there was a very clear realization among the membership that when they returned to Annapolis for the 2010 session they would face a budgetary situation perhaps as bleak as the one that prompted a special session in November 2007.

As The Gazette newspapersreported only four days after the close of the 2009 session, fiscal projections indicated that Maryland faced a nearly $1 billion shortfall for the coming year. The paper stated further that the situation could be even worse heading into 2010 if State revenues declined. State revenues have declined since then. The latest projected deficit is now in the range of $1.9 to $2.0 billion, nearly twice what was projected only eight months ago. As a result, the General Assembly will be faced with the prospect of extensive cuts to a proposed budget that will be even leaner than the budget submitted by Governor Martin O’Malley in 2009.

The Governor has already cut $700 million and nearly 3,000 jobs (most of which are vacant positions) from the state budget since the legislature adjourned in April 2009. Many believe that at least another $300 million in additional cuts will be necessary. Given the state of the Maryland economy, both legislative presiding officers, Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch, have expressed an unwillingness to increase state taxes. Senate President Miller has believed for some time that the state gasoline tax needs to be increased. However, he concedes that there are not sufficient votes to enact such an increase.

Office of the Public Defender

On October 27, 2009, the Senate Judicial Proceedings Committee (JPR) received a briefing on issues related to the structure, governance and mission of the Office of the Public Defender (OPD). In the aftermath of the August 2009 firing of Nancy S. Forster by the Office of the Public Defender Board of Trustees (by a vote of two to one), the legislature has begun to examine whether Maryland’s three-member public defense governance body is the proper size, and whether that body should be appointed by a single appointing authority, in this case, the Governor.

The Judicial Proceedings Committee heard presentations by Forster, the entire Board of Trustees, national experts on public defense governance systems, and members of the public. Perhaps the most striking revelation to the Committee was that Maryland has the smallest public defense governing body in the nation, with only three (3) members. As the national experts pointed out, most states have public defense governance bodies of at least nine (9) members (the minimum size recommended by the American Bar Association).

One of the issues most likely to inspire legislation concerning OPD is whether its Board of Trustees is an advisory body or a governing body. While the statute describes the OPD Board of Trustees as an advisory board, the Public Defender serves at the pleasure of the Board. Questions arose during the JPR briefing as to what happens if the Board makes recommendations to the Public Defender that are not implemented. The Committee wanted to know if failure to implement the Board’s recommendations could result in the Public Defender’s removal. If so, the Board is not simply an advisory board, but a governing board.

One idea presented to the Committee by David Carroll of the National Legal Aid & Defender Association (NLADA) was that Maryland should consider converting to a public defense governing body that is appointed by multiple appointing authorities. Carroll cited the example of Louisiana, which had a public defense governing board that has appointees tapped by the Governor, Senate President, House Speaker, Chief Judge of the state’s high Court, deans of the state’s law schools, the state bar president and other stakeholders.

Judicial Compensation

In late 2008, the Judicial Compensation Commission issued its recommendations for judicial salary increases. Accordingly, legislation was introduced during the 2009 session to increase judicial salaries. However, due to the economic downturn and the state budget shortfall, the legislature deferred action on the Commission’s recommended salary increases until the 2010 session. Given a state financial outlook every bit as bleak as that of last year, it seems improbable that 2010 will bring long-overdue increases in judicial compensation.

Maryland Legal Services Corporation

In 2009, the Maryland Legal Services Corporation (MLSC) faced a proposed budget cut of $500,000, as well as restrictive budget language (as proposed by the House Appropriations Committee) which would have required individual grantees to provide reports to the General Assembly on their activities funded by MLSC grants. The MSBA partnered with the MLSC, the Maryland Disability Law Center, the Legal Aid Bureau and other legal community stakeholders to work with the Senate of Maryland to avert the cut to MLSC funding. The Senate rejected the proposed House cut, and in the budget conference committee, the House relented.

THE LATEST
projected deficit is now in the range of $1.9 to $2.0 billion, nearly twice what it was projected only eight months ago.

Given the continued concerns about the MLSC’s reduced funding from IOLTA revenue, the MSBA Board of Governors will review the forthcoming recommendations of the Access to Justice Commission, chaired by Judge Irma Raker (ret.) to determine whether a legislative remedy to the MLSC funding issue is appropriate.

Contested Judicial Elections

With 2010 being an election year, numerous Constitutional Amendments are likely to appear before the General Assembly. Among those potential amendments is likely to be a reintroduction of a proposal to abolish contested circuit court elections in Maryland, replacing the current system with a retention election system similar to that used for the Court of Appeals and the Court of Special Appeals.

While the MSBA has historically supported conversion to a retention election system for circuit court judges, previous introductions of the proposal have found little, if any political traction in Annapolis. Expect nothing different in 2010.

Uniform Power of Attorney Act

For the past three legislative sessions, the General Assembly has considered a recommendation of the National Conference of Commissioners on Uniform State Laws (NCCUSL) to establish in Maryland a Uniform Power of Attorney Act. The bill has failed each year. In 2009, the bill passed the Senate, but died in the House. Several MSBA Sections have devoted a tremendous amount of time to supporting this legislation.

As described by the Maryland Department of Legislative Services, the proposal would have:

  • applied to all powers of attorney, except a power of attorney paired with an interest in the subject of a power of attorney, given as security, or as consideration; a power to make health care decisions; a proxy or other delegation to exercise any and all rights with respect to an entity, or a delegation of authority to execute, become a party to, or amend a document or agreement governing an entity or entity ownership interest; a power of attorney created on a form prescribed by a governmental entity for a governmental purpose; a power of attorney created as part of, or in connection with, an agreement establishing an attorney and client relationship; or a power of attorney that states it is not subject to the provisions of the proposed law. A power of attorney is durable (not terminated by the principal’s incapacity) unless it expressly provides that it is terminated by the incapacity of the principal. The principal is the person who has granted authority to an agent in a power of attorney.

  • specified signature and acknowledgement requirements for proper execution of a power of attorney, validity of a power of attorney, and applicable law for determining the meaning and effect of a power of attorney; when a power of attorney becomes effective; when a power of attorney terminates;

  • when an agent’s authority under a power of attorney terminates; methods of resignation by an agent; the validity and enforceability of an act of an agent after the termination of a power of attorney, performed in good faith and without knowledge of the termination; the validity and enforceability of an act of an agent under a nondurable power of attorney performed in good faith and without knowledge of a principal’s incapacity; and the effect of a subsequently executed power of attorney on a previous power of attorney;

  • eligibility of a person to serve as an agent under a power of attorney;

  • the ability of a principal to designate two or more persons to act as coagents under a power of attorney; the ability of a principal to designate, or grant authority to designate, one or more successor agents; the authority of coagents and successor agents; and the liability of an agent for a breach of fiduciary duty committed by another agent;

  • acceptance of appointment as an agent under a power of attorney;

  • standards applicable to an agent’s actions and other requirements of an agent; liability of an agent; and disclosure by the agent of receipts, disbursements, or transactions conducted on behalf of the principal upon request by specified persons or entities or order of a court;

  • authority of an agent that must be expressly granted in a power of attorney; subject to the provisions of a power of attorney, the authority of an agent under an overall, general grant of authority, or a general grant of authority with respect to specific subjects; subject to the provisions of a power of attorney, limitations on a general grant of authority with respect to gifts; property with respect to which the agent may exercise authority under the power of attorney; and the effect of an act performed by an agent under a power of attorney; and

  • the ability of a person, in dealing with an agent, to rely on an acknowledged power of attorney without liability.
The bill contained a statutory form power of attorney and an optional form for use by an agent to certify facts concerning a power of attorney.

The MSBA Sections on Elder Law, Estates & Trusts, Health Law and Business Law have worked tirelessly on this issue, and will remain active in 2010.

Same-Sex Marriage

In 2009, the General Assembly considered competing proposals to authorize same-sex marriage and to specifically prohibit same-sex marriage in Maryland. At its February 2009 meeting, the MSBA Board of Governors authorized the MSBA Section on Family and Juvenile Law to support legislation that would allow marriage between individuals of the same gender, and to oppose legislation that stated that it would be against the policy of the State of Maryland to allow individuals of the same gender to enter into wedlock. Both proposals died in their chamber of origin. Both bills will be back in 2010.

Child Support Guidelines

The Maryland General Assembly first enacted the state’s child support guidelines in 1989. The guidelines, which dictate what a non-custodial parent must contribute to the upbringing of his or her children, have not been updated since enactment of the guidelines in 1989. While the child support guidelines are reviewed every four years (in accordance with federal and State law) by the General Assembly, every legislative attempt to update the guidelines has failed.

The Child Support Enforcement Administration (CSEA) of the Maryland Department of Human Resources (DHR) reports that the cost of raising a child has increased by at least 60 percent since the Maryland child support guidelines were enacted. The Department reported to the Senate Judicial Proceedings Committee and the House Judiciary Committee that it will seek introduction of legislation in 2010 that will adjust the child support guidelines that will reflect the current costs of raising a child. The current child support guidelines are based upon the 1988 federal poverty guidelines.

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Publications : Bar Bulletin: December 2009

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