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Bill would give Washington Co. increasing share of state Disparity Grant

February 07, 2013|By KAUSTUV BASU | kaustuv.basu@herald-mail.com

ANNAPOLIS — A Washington County lawmaker has introduced a bill in the House that seeks to provide the county a gradually increasing proportion of a wealth-based grant with every passing year.

That wealth-based grant is known as the Disparity Grant, and Washington County hasn’t been able to receive it after the program was frozen in 2010.

Getting the grant money is one of the top legislative priorities for the Washington County delegation during the current session of the Maryland General Assembly.

Del. Andrew A. Serafini, R-Washington, who introduced the bill, said it was a way to start a conversation around the issue.

“It is a method to bring forward the idea through the legislative process,” Serafini said.

The chances that the bill would survive in its current form is unlikely, Serafini said Thursday.

The Disparity Grant was created in the early 1990s to give counties that have low revenue from income tax an opportunity to get state aid.

According to the formula used to calculate the grant, counties with per capita income tax less than 75 percent of the state average would be eligible for a grant. 

The amount of the grant depended on the per capita income tax revenue of a county with jurisdictions with lower income tax revenues getting a higher share of the grant.

When the cost of the grant grew to $120 million in 2010, the state froze the grant money for the future at 2010 levels.

But Washington County wasn’t eligible for the grant that year because its per capita income tax revenues were higher than 75 percent of the state average.

The county has been locked out of the grant ever since, even though its per capita income tax revenues are currently below that level.

If it were eligible, the county could have received $7.7 million in grant money during fiscal year 2014.

Serafini’s bill attempts to get some of that money through a gradual process where the county would receive 20 percent of the grant money it is eligible for in the first year, if the bill were to become law.

The next year, according to the bill, that proportional amount would climb to 40 percent for counties eligible for the aid.

In five years, counties that were eligible for the aid in 2010, but locked out because of the freeze, would be receiving the entire amount if they qualified.

Serafini said he hoped that the county’s per capita income tax revenue would rise in coming years, so that the county did not have to ask for the grant money any more.

He said Thursday that the bill is one of several options that the county delegation has in trying to get a portion of the grant.

“It could also happen through an amendment to the governor’s budget or a supplemental budget,” he said.

Eleven jurisdictions in the state, including Baltimore City, would be eligible for a total of $34 million dollars in fiscal year 2014 if the grant program had not been frozen at 2010 levels.

Only Wicomico County is eligible for more money than Washington County, at $8.9 million.

“Some have said that the likelihood [of counties getting the grant money] is not great,” Serafini said.

Any chances of getting the grant money could be affected if the federal sequestration — a federal spending cutback — were to happen in the coming months, he said.

“If they hit before the session is over … the state budget would be in serious change mode,” he said.

The state’s Department of Legislative Services has been working with interested legislators to look at various options available to the counties.

One suggested option would get Washington County and several other jurisdictions 40 percent of the grant money they would be eligible for; another more closely  resembles the Serafini bill with a gradual increase in the grant money over the years.

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