FIELD ENFORCEMENT

The role of the Comptroller differs significantly from state to state. In Maryland, the agency’s Field Enforcement Division (FED) was responsible for the enforcement and regulation of alcohol, tobacco, and motor fuel. This was a unique, albeit effective, setup thanks to Franchot's leadership team of Jeff Kelly and Chuck Ulm, as well as their experienced staff. They spent decades earning the respect and trust of the industries they regulated.

Shortly after taking office, Franchot spearheaded efforts to establish a regulatory framework for specific tobacco products. In 2010, he sponsored HB 88 to prevent unsafe tobacco products from reaching the marketplace by establishing a license for businesses selling “Other Tobacco Products” (OTP). It also provided a mechanism to hold tax scofflaws accountable for underreporting, as well as ensuring the

Comptroller Franchot holds a press conference to discuss his agency’s Taxpayer Protection Act. Joining him are Field Enforcement Division Director Jeff Kelly (left); Deputy Comptroller Sharonne Bonardi (right); and Revenue Administration Division Deputy Director Wally Edelman (far integrity and safety of OTPs. Franchot’s unwavering determination has kept unsafe tobacco products off the shelves and out of the hands of young people.

FED was tasked with new duties by the legislature in 2011, overseeing the charitable slots program on the Eastern Shore, which was plagued by inconsistences. FED quickly instituted uniform regulations, an explanation of procedures and licensing and audit control that works well to this day.

One of the most significant accomplishments of Franchot’s tenure was his relentless advocacy of the Taxpayer Protection Act (TPA) of 2017. This legislation was in direct response to the avalanche of sophisticated tax fraud and identity theft schemes that were on the rise due to evolving technologies and unscrupulous criminals. The TPA not only protected taxpayers' money and privacy, it granted FED agents additional powers to enforce tax law, including issuing subpoenas and signing charging documents. The FED Investigative Unit expanded and is actively investigating multiple instances of tax fraud being committed against the State. The Office of the Attorney General (OAG) has designated an Assistant AG to work closely with the Comptroller’s Office to identify instances of income tax fraud that meet a threshold for prosecution. Of the multiple income tax cases investigated by FED agents and prosecuted by the OAG, the conviction rate stands at 100%.

Franchot continued his pursuit of dangerous tobacco-related products when he established the “e-facts” Task Force in October 2019 to examine the health and safety implications of electronic smoking devices following after national reports of serious illnesses, lung disease, and deaths attributable to vaping. After several meetings with advocates, parents and public health officials like Dr. Hoover Adger, professor of Pediatrics and Director of Adolescent Medicine, at the Johns Hopkins University School of Medicine, it became clear that the Task Force needed to address the surging popularity of these devices with young people and the public health threat posed by a new generation hooked on nicotine.

“Without Franchot’s leadership, many millions of tax dollars would have found their way into the pockets of unscrupulous tax schemers continually testing the limits of the state’s taxing systems.”

BILL GEORGE DIRECTOR OF FIELD ENFORCEMENT, ALCOHOL TOBACCO COMMISSION

In February 2020, the task force submitted a 30-page report of its findings, which contained legislative recommendations potential state agency action, and proposed regulatory language and enforcement priorities for the now-renamed Field Enforcement Bureau of the Comptroller’s Office. The changes did come, eventually, at the federal level. The Food and Drug Administration prohibited the manufacture and sale of fruit-flavored and mint-infused e-cigarettes in 2020, and then banned the sale of e-cigarettes to minors in all 50 states.

Motor Fuel Awards during Comptroller Franchot’s tenure

Motor fuel regulation may sound mundane, but for Franchot, it was a matter of tax fairness, fuel quality and safety. Unfortunately, fraud runs rampant, and agents have seen everything from fake IFTA (International Fuel Tax Administration) decals to bogus unlicensed vendors selling diesel fuel and counterfeit renewable fuels.

IFTA licensing (and decals) are required in the lower 48 states for any motor carrier. It simplifies quarterly returns and informs the state that operators are in compliance.

A rash of forged IFTA decals were spotted in Maryland shortly after Franchot took office, and the agency drafted legislation to establish criminal penalties. The bill passed into law and became model legislation.

Board Of Public Works

It is not an exaggeration to say the Maryland Board of Public Works (BPW) is unlike any governmental body in the country. Comprised of the Governor, Comptroller and Treasurer, the BPW approves all contracts above $200,000, protects the State's fiscal integrity and its coveted AAA bond rating, and ensures taxpayer funds are spent wisely and fairly, among many other oversight responsibilities.

For years, Comptroller Franchot fought against single-bid contracts to ensure the State was getting the best value for its money. He also consistently advocated for the awarding of more minority and woman-owned contracts. The use of singlebid contracts has fallen by 86% due to Franchot's advocacy. CHAPTER

Franchot also spoke out against the repeated use of “emergency contracts” that could have been avoided with better planning. Many times, he was the lone BPW member chiding state officials for this tactic.

He vigorously fought against the closure of state-run hospitals and recalls one of the the darkest days of his tenure when the Board voted, against his objections, to close the Upper Shore Community Mental Health Center in Chestertown. At the time of the closure, the facility had 60 beds and residents could not be placed in other facilities in Central Maryland. Additionally, 100 employees lost their jobs in the midst of a recession.

“For too often, we’re presented with contracts that practically put a gun to our head, where we don’t have adequate time to fix procedural issues. Instead, we are faced with an unacceptable choice between agreeing to a bad deal for taxpayers or discontinuing a service that they desperately need. These late emergency contracts must stop. The Board of Public Works is not a rubber stamp, and I, for one, will not stand by quietly while laws are violated. Enough is enough.”

PETER FRANCHOT

Throughout his four terms, Comptroller Franchot visited Maryland’s public universities and colleges and worked closely with higher education leaders to advance critical priorities subject to BPW authorization. His partnership with Maryland's higher ed institutions and trade schools helped fulfill their mission of training future leaders and preparing the workforce of tomorrow to keep Maryland's economy strong.

Franchot’s time on the BPW saw significant capital construction on the campuses of Maryland’s public universities and colleges. In all, he authorized more than $8 billion in infrastructure projects for University System of Maryland institutions, including hundreds of millions of dollars for the system’s three Historically Black Colleges and Universities. These projects created thousands of good-paying, family-sustaining jobs and supported growing enrollment.

Prior to becoming Comptroller, Franchot served 20 years in the House of Delegates, spending eight years as chair of the House Transportation & the Environment Subcommittee. There, he directed record state investments to projects across the state, and was among the earliest and staunchest supports of the Purple Line light rail project that will link Bethesda, Silver Spring, College Park and New Carrollton.

In 2016, the BPW unanimously approved a team of private companies to build, operate, and maintain the Purple Line. The $5.6 billion contract was 876 pages long and, according to The Washington Post, is believed to be the most expensive government contract ever in Maryland” and one of the largest public-private partnerships on any U.S. transportation project.

In January 2022, the BPW approved a $3.4 billion contract to have U.S. subsidiaries of two Spanish construction firms take over the construction portion of the project. The overall cost has ballooned to $9.3 billion. The Purple Line is slated to open in fall 2026.

Franchot also backed the Maryland Department of Transportation's plan to ease crushing congestion on the Capital Beltway (I-495) and I-270, and he successfully secured comittments that a Project Labor Agreement would be used to provide union wages for workers on the project.

“As elected officials and policymakers, we have to make decisions using pragmatism and logic, and at this very early stage of this P3 project, I believe this revised plan is a win-win for the region.”

To address community concerns, he also orchestrated changing the order in which work takes place, ensuring a portion of revenues would be shared with local governments, steering funds to local transit upgrades, allowing public buses to use toll lanes free of charge, suspending the taking of private homes or businesses by eminent domain and requiring a monorail feasibility study between Montgomery and Frederick counties. That project remains in limbo as Franchot left office.

Comptroller Franchot tours a public athletic field with Howard County Executive Calvin Ball and Register of Wills Byron Macfarlane. In addition to procurement contracts, Comptroller Franchot and his BPW colleagues have approved grants for local parks and recreational spaces.

K - 12 SCHOOLS

Othe surface, the Office of the Comptroller has little to do with schools.

Being on the Board of Public Works provided a platform to approve capital funding for K-12 and higher education institutions, but Franchot was determined to take a more impactful role. One of the first initiatives he spearheaded was requiring a statewide financial literacy course as a high school graduation requirement.

Franchot recognized that students must be financially literate to be prepared for college, their careers, and stable futures. He worked with a variety of stakeholders, including Junior Achievement, to advocate for financial education. He initiated a grassroots petition campaign gathering over 10,000 signatures to persuade the Maryland General Assembly to implement a statewide high school graduation requirement in personal finance. The effort came up short, but it was the first sign that Franchot would be vocal about schools. CHAPTER

In 2011, Comptroller Franchot urged Baltimore County government and school officials to address the unsafe and unhealthy working and learning environments in 65 public school buildings that lacked air conditioning, despite more state funding for school construction over the years. Often, the buildings that lacked climate control were located in the most poverty-stricken zip codes. It was a social and economic injustice, and Franchot became the leading advocate for thousands of students, teachers and staff who were forced to work and learn in these harmful conditions. He proposed installing portable units as a temporary, immediate measure until Baltimore County renovated or replaced the aging school buildings. In neighboring Baltimore City, 75 schools were without sufficient air conditioning and heating in their classrooms, so Franchot expanded the fight to help those students and staff, whose schools were also often in economically deprived communities.

After the lack of heating in Baltimore City schools made national news with images of shivering children in winter coats sitting in freezing classrooms, Comptroller Franchot and Gerald Stansbury, the state chair of the Maryland chapter of the NAACP, wrote a letter to the U.S. Department of Justice requesting a civil rights investigation. “These students deserve to have the same educational experience as Maryland students who are privileged to live in more affluent communities” they wrote.

While the Cool Classrooms

battle wore on, Franchot wanted to recognize exceptional school maintenance. The Silver Hammer Award honored the underappreciated work done by public school custodians and maintenance crews throughout the state. Head custodian, Joe Stafford, of Cumberland's Fort Hill High School, built in 1936, received the award in Allegany County for his exemplary maintenance belying the school’s age. Faced with limited budgets and spiraling costs, the custodial and maintenance teams were dedicated to keeping the children and staff safe and healthy. The Silver Hammer provided much-needed recognition for those in the K-12 system who actually kept the lights on and the classrooms cool (or heated in the winter months). CHAPTER

By

2022, Franchot’s advocacy for the state’s most vulnerable children resulted in air conditioning units in all Baltimore County schools and all but 14 Baltimore City schools. For over a decade, Comptroller Franchot stood firmly with students, parents, teachers, staff and advocates to bring a resolution to this decades-long public health crisis.

High-performing schools rely not just on superior teachers, administrators and staff, but also devoted volunteers Franchot paid tribute to them with the Golden Apple Award.

Jill Burnett, who volunteered at three different schools in Carroll County each week while organizing boosters, sporting events, teacher appreciation weeks, and setting up and breaking down dances and performances, was among the deserving honorees.

Lastly, Franchot celebrated the artistic talents of students across the state with the Maryland Masters Awards. Artwork created by K-12 students was submitted statewide. The winning selections, in a variety of mediums, adorned the walls of the Louis L. Goldstein Treasury Building. CHAPTER

Honoring Unsung Heroes

An important part of Peter Franchot's tenure was paying tribute to individuals and organizations devoted to serving others - Maryland's unsung heroes. In 2012, Franchot created the William Donald Schaefer Helping People Award to honor Marylanders who went above and beyond to assist the most vulnerable in their communities. The award was an homage to the former Comptroller, Governor, and Baltimore Mayor whose "Do It Now" mentality was greatly admired by Franchot. Recipients of the award were selected from all 24 jurisdictions. Winners demonstrated Schaefer’s commitment to helping the little guy and assisting those most in need. They came from all walks of life and poured every ounce of their time and energy into the cause they championed. Every year, the number of nominations increased in number and many worthy suggestions could not be recognized, demonstrating how many outstanding humanitarians live among us.

Comptroller Franchot launched his Baseball & Brew initiative in 2017 to help grow the tourism industry in Maryland. It featured a beer and baseball trail to guide lovers of both from Maryland's mountains to its seashore.

The starting point of the trail celebrates baseball Hall of Fame pitcher, "Lefty" Grove, whose statue was unveiled in his hometown of Lonaconing

For 10 years, the Schaefer Award grew in stature and meaning. In 2014, Warrior Canine Connection received the nod in Montgomery County for their mission-based trauma recovery efforts reconnecting wounded warriors to postmilitary life using canine companions. In 2020, Friends of Blackwater National Wildlife Refuge received the Schaefer Award for their education and conservation of one of Maryland’s greatest scenic and ecological treasures. Joseph Benn took home the 2021 Baltimore County award for mentoring at-risk foster children in his community, teaching the value of hard work and becoming self-sufficient, all from his barber shop in Windsor Mill.

Deserving Marylanders, living or deceased, were honored equally by Franchot. Lefty Grove, a native of Lonaconing who rose from poverty to become one of the all-time greatest pitchers, won two World Series titles and was inducted into the Baseball Hall of Fame in 1947. Franchot, the unofficial chairman of the Lefty Grove Memorial Committee, helped secure funds through his role on the Board of Public Works to have a statue erected in Lefty’s hometown. Sculptor Susan Luery, creator of the Babe Ruth statue outside of Oriole Park at Camden Yards, was commissioned in 2017 to complete the statue. It was unveiled in October 2019, just in time for the 90th anniversary of the 1929 World Series in which Lefty amassed two saves in 6 1/3 scoreless innings.

Honoring Unsung Heroes

After the 2019 death of former House Speaker R. Clayton Mitchell, Jr. with whom Franchot served in the General Assembly, the Comptroller created the Mitchell Award for Distinguished Public Service to honor public servants who put the interest of citizens above party politics and self-promotion. The Speaker's, son, Clay Mitchell, Sr., son had the honor of delivering these awards personally as a tribute to his father.

Recipients of the Mitchell award were chosen from both sides of the aisle, and they were touched by the recognition of their lifetime of service. Pioneers like Gloria Lawlah and Eileen Rehrmann were recognized for their advocacy of women and minorities and fighting for the elderly. Heavy hitters Casper Taylor and Wayne Gilchrest received the nod for their stewardship conserving Western Maryland heritage sites and Eastern Shore wetlands, respectively.

Franchot was not one to shy away from charitable acts and encouraged his employees to do the same. Agency personnel annually participated in the Maryland Charity Campaign, donating portions of their salary to worthy organizations. Employees raised funds for nonprofit groups throughout the year. The signature philanthropic event was the Salvation Army Holiday Family Program, wherein each agency division adopted anonymous, underserved families and purchased holiday

Honoring Unsung Heroes

presents from an extensive wish list. Each December, Salvation Army personnel would arrive to collect the gifts, amidst much fanfare and celebration. It truly embodied Franchot’s desire to make sure everyone did their part to assist those who needed a helping hand.

Honoring Unsung Heroes

Covid Mobilization

When COVID-19 suddenly ravaged the world, Franchot expected every agency employee to step up and continue serving taxpayers. Staff seamlessly transitioned to remote work and still delivered firstclass customer service. In fact, when most state agencies stopped answering their phones altogether, the Comptroller’s agency ended up taking non-tax related calls from desperate Marylanders in search of unemployment assistance, motor vehicle services or other state agency assistance.

As the pandemic worsened, and economic activity came to a screeching halt, state and local governments were forced to make significant cuts to their operating budgets as lockdowns were put in place to safeguard public health. In response to the expected revenues reduction, Governor Hogan proposed sweeping cuts - impacting public safety, education, the environment, healthcare and more.

Known for its artisanal suds and skin care products, Mount Royal Soap Company in Baltimore formed an unlikely partnership with alcohol maker Charm City Meadworks and Waverly Color Company, a producer of high-end tattoo ink, to produce hand sanitizer to combat COVID-19.

As one of three votes on the Board of Public Works empowered to make midyear budget reductions, Franchot successfully blocked over $280 million of cuts that may have helped prevent eviction or the closure of a business.

Franchot led his team decisively through the crisis with the focus, as always, on taxpayers. He began by offering a 90-day filing and payment extension until July 15, 2020, for both individual and business income taxes. This decision proved critical to helping businesses keep the lights on and assisting individuals who had lost their jobs. Franchot repeated the 90-day extension in 2021, and did so again in 2022 for individual tax filers only.

The Bureau of Revenue Estimates indicated that the 2020 and 2021 forbearances benefitted roughly 600,000 taxpayers each year, enabling them to collectively hold a $1.8 billion interest-free loan that may have prevented eviction or simply given extra financial breathing room. Forbearance, however, was not the only assistance coming from the agency.

The pandemic shuttered bars, restaurants, breweries and other businesses due to social distancing requirements and staffing shortages. Franchot understood the devastating impact this would have on the food and beverage service sector.

Restaurants lost their more lucrative sales since they were forbidden from selling

“Right now, Maryland taxpayers and businesses must stay focused on their health and keeping the lights on, both in their homes and businesses. Extending the due date for Maryland individual and business income tax payments helps us keep cash flowing in our economy and into employee’s bank accounts.” alcohol to go, while breweries were restricted in how much beer they could allow customers to take home and they couldn't deliver straight to their doorsteps.

To support these small businesses, Franchot moved to suspend enforcement of alcohol carryout limits, allowed restaurants to make to-go cocktails and paved the way for home delivery of beer. Governor Hogan signed an executive order temporarily permitting such moves, providing restaurants and breweries a lifeline to survive the pandemic. The experiment served as the basis for permanent reform of these regulations that passed in the 2021 legislative session.

DONALD C. FRY PRESIDENT & CEO GREATER BALTIMORE COMMITTEE

To help businesses keep the lights on and avoid more layoffs, Franchot’s team compiled and maintained an updated list of more than 80 pages of restaurants and related businesses statewide that remained open during the first 18 months of the pandemic. Outdoor seating, carry-out, curbside and delivery options were noted, so customers could patronize their local establishments in the manner they felt most comfortable. The agency's most pivotal role during the pandemic was the implementation of the RELIEF Act of 2021, which provided direct stimulus payments and unemployment insurance grants to qualifying Marylanders, as well as grants and loans to eligible small businesses. The Comptroller's Office was responsible for processing and issuing these stimulus checks to hundreds of thousands of qualifying Marylanders, doing so in a matter of days for 98 percent of recipients.

“Local businesses are the beating heart of our state’s economy and the backbone of our communities. They are being decimated through no fault of their own, leaving their survival and the fate of the tens of thousands of Marylanders they employ, as well as their families, in jeopardy. We have to pull together and help them keep the lights on during this period of deep uncertainty and loss.”

PETER FRANCHOT

As part of the RELIEF Act, the General Assembly made a bevy of changes to the tax code in the middle of tax season, requiring the creation of new forms and adjustments to the interactive tax processing system. Filing and payment deadlines

“During Peter’s tenure as our comptroller, his stewardship for our state and all Marylanders transcended just the typical comptroller’s roles. As the aptly-nicknamed “watchdog,” he maintained a fiercely independent stance on all issues related to taxpayer money, supported small businesses and local industries, had an open door with leaders across the state from all walks of life and both political parties, and he listened to everyone. His decision-making was as thoughtful as it was passionate, and he will be missed in Annapolis and around the state.”

ERIC D. BROTMAN

CEO, BFG FINANCIAL ADVISORS,LUTHERVILLE AND MEMBER, COMPTROLLER’S BUSINESS ADVISORY COUNCIL

were extended to accommodate these changes and interest charges and penalties were waived.

Franchot also lobbied to expand the Earned Income Tax Credit (EITC) to benefit more low-income Marylanders, particularly people who file taxes using an Individual Taxpayer Identification Number, or ITIN. The agency developed an online EITC assistant in English and Spanish to help Marylanders determine if they qualified for the credit. This was a Herculean team effort, with nearly every agency division playing a role.

COVID ravaged many sectors, but few suffered quite like the state's child care providers. Hundreds of facilities permanently CHAPTER closed as mandatory shutdowns and social distancing requirements meant lower enrollments and laying off staff.

Some relief arrived in the summer of 2020. The push to get essential workers back on the job meant the state had to foot the bill for daycare expenses. Unfortunately, the Maryland State Department of Education (MSDE), which oversaw the state's child care facilities, failed to promptly identify which providers would receive payments and did not sign off on disbursement authorizations required for the Comptroller to issue funds. As a result, child care providers went unpaid for five weeks, unable to pay employees or cover operational expenses.

The agency's General Accounting Division stepped up to resolve the situation, expediting payments within hours of authorization. As a result, the Maryland State Child Care Association presented the Comptroller's Office with an award for their heroic efforts.

Several other problems with grant funding followed in the months ahead, but Comptroller Franchot and his team repeatedly came to the rescue to prevent more damaging outcomes.

As life slowly started to return to normal and demand for fuel rose with more people back on the roads - in addition to Russia's invasion of Ukraine - gas prices sharply spiked. The pain at the pump impacted nearly everyone, so Franchot led the rallying cry for a 90-day gas tax holiday and, later, a one-year suspension of a nearly 7-cent state gas tax increase that was tied to inflation.

Rather than heed Franchot's 90-day suggestion, the General Assembly agreed to pass a 30-day suspension of the state gas tax, saving motorists 36 cents per gallon from March 18 to April 16. Implementation of the gas tax holiday fell on the Comptroller's Office, requiring rapid action from all divisions and coordination with the state's service station owners to ensure compliance. Once again, the agency earned an award, this time from the Federation of Tax Administrators, for its superior work.

Franchot and his team overcame the challenges of COVID and managed to improve the lives of Marylanders, leading the nation in tax administration and continuing to provide the kind of customer service that taxpayers deserved and expected under his stewardship.

Onward & Upward was intentionally chosen as the title for this publication. A favorite expression of Maryland’s 33rd comptroller, it is a rallying cry that exudes hope and optimism and served as a compass that guided Peter Franchot’s work during his 36 years of service to the people of Maryland.

During his tenures as a member of the Maryland House of Delegates (19872007) and as Comptroller of Maryland (2007-2023), he served alongside five governors, five lieutenant governors, three comptrollers, three attorneys general, four state treasurers, two Senate presidents, and four House speakers. On a number of occasions, Franchot played a central role in some of the most consequential policy decisions impacting the future of generations of Marylanders, from investments in public education, to transportation and infrastructure, environmental protection, public safety, and so many others.

Throughout his years of service both in the executive and legislative branches, Franchot embraced the role of a champion for communities and constituents who feel unheard and unseen in the corridors of power in Annapolis. Unafraid of –and unapologetic for – taking on powerful special interests and political figures when he believed it was justified, Franchot elevated important issues of concern to the highest levels of government. Doing so earned the respect and admiration of Marylanders across the state – even those who disagreed with him.

What’s more, Comptroller Franchot was an effective fiscal watchdog for Marylanders – demanding accountability, transparency, and results from government agencies, including his own. He led the transformation of the Comptroller’s Office to become the national model of efficiency and service that it is today, garnering awards and recognitions for its operational successes – from customer service to fraud detection. Our fiscal and economic health, despite two economic crises during Comptroller Franchot’s tenure, remain strong; and our state is well-positioned to weather future uncertainties that may harm the financial stability of Maryland’s working families and small businesses because of, in no small part, his leadership.

What these years of advocacy and leadership have produced are fiscal and economic policies that support working families and small businesses; a government that is more responsive to the people it serves; and a strong affirmation that public service – despite the political fault lines that often divide us – remains a noble calling that allows ordinary citizens to accomplish extraordinary things for their neighbors and communities.

Our state is better, and her future brighter, because of the nearly four decades of dedicated public service Franchot devoted to Maryland. Thank you, Mr. Comptroller – Onward and Upward!

Acknowledgements

This publication was written and designed by Comptroller Peter Franchot’s staff, who are grateful to Comptroller Franchot for the opportunity he has afforded all of us to serve the people of Maryland.

We wish to especially acknowledge and thank the following members of the Comptroller’s Office for their roles in this publication:

Principal Author: Maureen O’Prey

Editor: Alan Brody

Designer: Deirdre Tanton

Contributors: Emmanuel Welsh, Anne Klase, Emily Gontrum, Barbara Sauers, Bill George, Jeff Kelly, Susan O’Brien, Chuck Ulm, Gary White, Gary Ellison, Brandy Wiggins Richmond, Carol Lavix, Van Howeth, Andrew Waters, Lisa Henneman, Alex Walinskas, Kynara Fogan, Nadia Williams, Benjamin Penserga, Justin Hayes, and Chris Riley.

We also wish to attribute certain photographs in this book to Joe Andrucyk from the Governor’s Office; Maximilian Franz; Christopher Myers Photography; David Hartcorn; Matthew Presky; McClintock Distillery; Old Line Distillery; Alyssa Maloof; and Lyon Distilling.