Which Maryland transportation agencies can set their own employee salaries instead of following the state's Merit System pay plan?

Plain-English summary

Maryland's Secretary of Transportation asked the Attorney General to sort out which parts of the sprawling Department of Transportation could set their own employees' pay and which had to follow the state's ordinary Merit System pay plan, including the specific question of who set the salaries of the Deputy Secretary, Assistant Secretaries, and the administrators and deputy administrators of several transportation agencies. The Attorney General concluded that the Maryland Transportation Authority, Mass Transit Administration, State Highway Administration, and Maryland Port Commission/Administration each had their own statutory grant of power to hire and set pay independent of the Merit System, that the Secretary's own staff assistants and consultants were unclassified employees whose pay still ran through the Secretary of Personnel's pay plan, and that everyone else at MDOT followed the ordinary Merit System, with a separate FY1989 budget-bill salary cap layered on top regardless of which system otherwise governed a position.

Currency note

This opinion was issued in 1988. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could Maryland's toll authority and transit agencies set their own employee pay instead of using the state's standard pay plan?
Yes, according to this opinion. The Attorney General concluded that the Maryland Transportation Authority, Mass Transit Administration, State Highway Administration, and Maryland Port Commission/Administration each had express statutory language authorizing them to employ and independently fix the compensation of their own employees, separate from the State Merit System Law's pay plan process.

Did the Secretary of Transportation's own staff have this same independent pay-setting power?
No. The opinion found that the Secretary's "staff assistants" and "professional consultants" were unclassified employees who could be hired and removed at the Secretary's pleasure, but their pay still had to run through the Secretary of Personnel's annual pay plan under Article 64A, meaning MDOT itself had no independent authority to set their compensation.

Did a budget cap on manager salaries apply even to agencies with independent salary-setting power?
Yes. The opinion explained that a separate FY1989 budget restriction capping certain middle and senior management salaries applied regardless of whether an agency otherwise had independent pay-setting authority, because that authority was never independent of the General Assembly's constitutional power to condition or limit appropriations needed to fund the salaries.

Background and statutory framework

The opinion distinguished three categories of Maryland state employment: "classified" employees covered by the Merit System Law (Article 64A), "unclassified" employees who are exempt from Merit System classification but still subject to many of Article 64A's other provisions (like leave and grievance rights), and "independent" employees entirely outside Article 64A. It then worked through the specific statutory grants for each MDOT-related entity: the Maryland Transportation Authority (TR §4-205(d), previously construed the same way in an unpublished 1984 AG opinion and consistent with a 1976 opinion about the Maryland Wholesale Food Center Authority), the Mass Transit Administration (TR §7-206(a), which the MTA had already put into practice with its own personnel system), the State Highway Administration (TR §8-204(e)(1), textually similar to the MdTA's grant), and the newly created Maryland Port Commission (TR §6-201.2(a), enacted by Chapter 541 of the Laws of Maryland 1988), each of which the opinion found gave that entity independent authority to hire and pay its own employees outside the Merit System's pay determination procedures.

By contrast, the opinion found the Secretary of Transportation's own office worked differently under TR §2-102(d): the Secretary could appoint and remove "staff assistants" and "professional consultants" at will, a category the opinion narrowed using the reasoning of a Baltimore City Circuit Court decision, Bender v. Bosz, to mean only MDOT employees in charge of an area of responsibility who report directly to the Secretary, a limitation the opinion found persuasive even though that trial-level ruling was later reversed on a separate procedural point on appeal. Critically, the opinion concluded that being "unclassified" in this sense did not mean "independent" for pay purposes: because Article 64A, §27(a) requires the Secretary of Personnel's pay plan to cover "all classified and unclassified positions for which the Secretary has authority to administer pay," staff assistants remained subject to the ordinary pay plan process even though MDOT could hire and fire them freely.

Finally, the opinion addressed a separate FY1989 budget restriction, discussed in an earlier 1988 opinion (73 Opinions of the Attorney General 43), that capped the dollar salaries of various middle and senior management positions, including several of the transportation positions at issue here. The opinion explained that this budget cap operated as a valid exercise of the General Assembly's constitutional power to condition appropriations, applying to a position's salary if it was paid from appropriated funds regardless of whether the employing entity otherwise had independent statutory salary-setting authority, citing Bayne v. Secretary of State for the principle that a budget restriction must be directly tied to the expenditure of the appropriated sum, and citing State Election Bd. v. Billhimer as background on ongoing litigation over which positions count as excluded from the classified service more generally.

Citations and references

Statutes:

• Article 64A, §1 of the Maryland Code
• Article 64A, §37
• Article 64A, §27(a)
• Article 64A, §27(d)
• TR §4-205(d)
• TR §4-205(d)(1)
• TR §4-205(d)(2)
• TR §7-206(a)
• TR §7-202(c)
• TR §8-204(e)(1)
• TR §8-202(c)
• TR §6-201.2(a)
• TR §6-201.2(b)
• TR §6-203(b)(3)
• Former TR §6-204(m)(2)
• TR §2-102(d)
• TR §2-102(c)(3)
• TR §12-104(d)(1)
• TR §12-104(d)(2)
• §7-209 of the State Finance and Procurement Article
• Chapter 526, Laws of Maryland 1970
• Chapter 543, Laws of Maryland 1988
• Chapter 541, Laws of Maryland 1988

Cases:

• State Election Bd. v. Billhimer, 72 Md. App. 578 (1987), cert. granted 311 Md. 698 (1988)
• Bender v. Bosz, Case No. A 54296/A-455/1974 (Cir. Ct. for Balto. City, March 8, 1979)
• Bender v. Bosz, 290 Md. 345, 430 A.2d 66 (1980)
• Bayne v. Secretary of State, 283 Md. 560, 564, 392 A.2d 67 (1978)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1988/Volume73_1988.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

PERSONNEL

Department of Transportation — Independent Salary-Setting Authority

October 12, 1988

The Honorable Richard H. Trainor
Secretary of Transportation

You have requested our opinion on the meaning and scope of the various statutory provisions that affect the salary-setting authority of the Maryland Department of Transportation ("MDOT") and other specific transportation agencies. You have also asked, in particular, about the authority to fix the salary of the Deputy Secretary of Transportation, the Assistant Secretaries of Transportation, and the "administrators and deputy administrators" of the Maryland Transportation Authority, Maryland Port Administration, Mass Transit Administration, and State Highway Administration.

For the reasons stated below, we conclude as follows:

    1. The Maryland Transportation Authority, Mass Transit Administration, State Highway Administration, and Maryland Port Commission and Port Administration have independent authority to hire and set the compensation of their employees.
    2. The Secretary of Transportation has independent authority to hire staff assistants and professional consultants throughout MDOT but does not have independent authority to set their compensation.
3. All other units of MDOT must hire their employees in accordance with the State Merit System Law and compensate them in accordance with the pay plan developed by the Secretary of Personnel.
    4. Of the particular officials identified in your request, the following have their salaries set by the General Assembly in the budget: the Deputy Secretary of Transportation; the administrators of the Mass Transit Administration and State Highway Administration; and the Executive Director of the Maryland Port Administration. The following have their salaries set independently: the administrators and deputy administrators of the Maryland Transportation Authority; and the deputy administrators of the Mass Transit Administration and the Maryland Port Administration. The Assistant Secretaries of Transportation have salaries determined by the Secretary of Personnel in the annual pay plan. In Fiscal Year 1989, certain of these positions are subject to a salary cap in the budget bill.

                                        I
                                Background

All State employees are classified employees, unless a provision of law excludes a particular group of employees. Article 64A, §1 of the Maryland Code provides that "[t]he classified service means and includes all offices of profit or trust and all places of employment, whether permanent or temporary, in the service of any State officer, department, commission, board or institution, other than those in the military forces ..." subject to certain statutory exclusions.1
In addition to positions in the "classified service," State employment includes a number of positions that are not "classified," within the meaning of the Merit System Law, but nevertheless are subject to many provisions of Article 64A (for instance, those governing leave, benefits, and grievance rights). See, e.g., Article 64A, §37. This opinion will use the term "unclassified" to describe these positions.2
Additionally, some positions of State employment are wholly outside of the provisions of the Merit System Law. See 61 Opinions of the Attorney General 596 (1971) (Maryland Wholesale Food Center Authority). For purposes of this opinion, State employees who are not subject to the provisions of Article 64A are referred to as "independent" employees.
With respect to both classified and unclassified positions, the Secretary of Personnel prepares a pay plan in which she recommends salaries to the Governor for all classes of employees. The pay plan becomes effective "when funds for that purpose are available within the budget." Article 64A, §27(d) (as amended by Chapter 543, Laws of Maryland 1988). The pay plan may be amended by the Secretary of Personnel, with the approval of the Governor, "to recruit or retain

1
An early, thorough account of the scope of the classified service may be found in 24 Opinions of the Attorney General 547 (1939).
2
An issue concerning criteria that exclude certain positions from the classified service is currently pending before the Court of Appeals. State Election Bd. v. Billhimer, 72 Md. App. 578 (1987), cert. granted 311 Md. 698 (1988).

competent personnel or to ensure that compensation rates adequately compensate the skills, knowledge, effort, responsibility, and working conditions." Id.
Apart from these generally applicable personnel statutes, several provisions in the Transportation Article ("TR" Article) specifically address personnel or compensation. Part II of this opinion reviews the effect of these provisions.3

                                       II
            Scope of Independent Salary-Setting Authority

A. Maryland Transportation Authority ("MdTA")

TR §4-205, which delineates the general powers of the MdTA, contains the following grant of authority:

      (1) Subject to paragraph (2) of this subsection, the Authority may employ and fix the compensation of attorneys, consulting engineers, accountants, construction and financial experts, superintendents, managers, and any other agents and employees that it considers necessary to exercise its powers and perform its duties.
      (2) The expense of employing these persons may be paid only from revenues or from the proceeds of revenue bonds issued by the Authority.

TR §4-205(d).

3
The Motor Vehicle Administration ("MVA") has authority to employ "the deputies, subordinate officers, clerks, investigators and other employees necessary to carry out the powers and duties of the Administration." TR §12-104(d)(1). MVA's employees are statutorily specified to be within the State Merit System:

 "Except as otherwise provided by law, each deputy, officer, and employee of [MVA]:
     (i) Is employed under the State Merit System Law; and
     (ii) Is entitled to the salary provided in the pay plan established under Article 64A, §27 of the Code."

TR §12-104(d)(2).
No specific statutory provisions address the personnel or salaries of the State Aviation Administration or the State Railroad Administration.

In a 1984 opinion, the Attorney General concluded that MdTA has "the power to establish a personnel system, including classification and compensation, that is independent of the State Merit System." Opinion No. 84-012 (February 27, 1984) (unpublished). This conclusion is consistent with the Attorney General's prior construction of similar statutory language applicable to the Maryland Wholesale Food Center Authority. See 61 Opinions of the Attorney General 596 (1976). In that opinion, the pertinent language was interpreted to mean that employees of the Food Center Authority were independent employees, subject to none of the provisions of Article 64A.
The interpretation of TR §4-205(d) contained in the 1984 opinion comports with the provision's broad language, and the General Assembly has not changed this language since the opinion. This interpretation is also consistent with current practice, sanctioned by the Department of Personnel. Accordingly, we conclude that the MdTA has power to hire and fix the compensation of its employees, subject to the financial limitation imposed by TR §4-205(d)(2) but independent of the Merit System Law.4

B. Mass Transit Administration ("MTA")

TR §7-206 gives the MTA broad power to establish its own personnel system independent of the State Merit System:

    (a) Without regard to the laws of this State relating to other State employees, the [Mass Transit] Administration may:
         (1) Create and abolish any position other than one specifically provided for in this title; and
         (2) Determine the qualification, appointment, removal, term, tenure, and compensation of its employees.5
    (b) (1) The Administration may establish a personnel system based on merit and fitness.

4
We understand that the MdTA recently instituted a new personnel system applicable to MdTA toll collectors, toll facilities police, and management staff.
5
TR §7-202(c) provides that the MTA Administrator, who is appointed by the Secretary with the approval of the Governor, "is entitled to the salary provided in the State budget."

The MTA has in fact established a personnel system independent of the State Merit System: employment criteria, hiring and firing decisions, holidays, and compensation are all determined in accordance with the MTA's personnel system rather than the State Merit System. This comports with the clear and unambiguous grant of personnel authority to the MTA contained in TR §7-206(a).

C. State Highway Administration ("SHA")

The SHA also has specific statutory authority over employment matters:

    The Administration may employ and fix the compensation of engineers, accountants, professional and technical experts, surveyors, skilled and unskilled laborers, advisors, consultants and any other agents and employees that it considers necessary to carry out its powers and duties.

TR §8-204(e)(1).
This description of the SHA's personnel authority closely corresponds to the statutory language used in TR §4-205(d)(1) to delineate the MdTA's personnel powers, and we adopt a similar construction here.6 The SHA's grant of authority to employ all necessary personnel does not contain the limitation that such hiring must be pursuant to the State Merit System. The SHA also has express authority to fix compensation.7

D. Maryland Port Commission ("MPC") and Administration ("MPA")

The newly created Maryland Port Commission has express authority to establish an independent employment system:

6
In the legislation that created MDOT and its modal administrations as well as the MdTA, the General Assembly made specific references to the applicability of the State Merit System for all statutorily created subunits of MDOT except for the SHA. The same legislation established the MdTA as an independent State transportation entity. The legislation was silent on the applicability of the Merit System to the MdTA and SHA. Chapter 526, Laws of Maryland 1970.
7
TR §8-202(c) provides that the SHA Administrator, who is appointed by the Secretary with the approval of the Governor, "is entitled to the salary provided in the State budget."

         (1) Notwithstanding any other provision of law relating to any other State employees, the Commission may adopt regulations to govern the personnel of the [Maryland Port] Administration

        (3) In carrying out the requirements of this subsection, the Commission may:
              (i) Create or abolish any position other than one specifically provided for in this title;
            (ii) Determine employee qualifications, appointment and removal procedures, terms of employment including compensation, benefits, holiday schedules, and leave policies, and any other matter concerning employees.

TR §6-201.2(a) (as enacted by Chapter 541, Laws of Maryland 1988).8
As is true of the MdTA, MTA, and SHA, the express power to "[d]etermine ... compensation" means that the MPC is empowered to do so independently of the pay determination procedures of Article 64A.9

E. The Secretary's Office

With respect to the Office of the Secretary of Transportation, TR §2-102(d) provides:

     The Secretary [of Transportation] may have in the Department the staff assistants, professional consultants, and employees provided in the State budget. Each staff assistant in charge of an area of responsibility and each professional consultant shall be appointed by and serves at the pleasure of the Secretary. Unless otherwise provided by law, the

8
Under prior law, except for certain "key personnel," full-time employees of the MPA were generally subject to the Merit System Law. Former TR §6-204(m)(2). Chapter 541 contains transitional provisions affecting MPA employees now in the Merit System. TR §6-201.2(b).
9
Under TR §6-203(b)(3), the MPA Executive Director, who is appointed by the Chairman of the MPC with the approval of the Governor, "is entitled to the salary provided in the State budget."

 Secretary shall appoint and remove all other personnel in accordance with the provisions of the State Merit System Law. The Secretary may delegate his authority to appoint and remove personnel of any unit to the head of that unit.10
The meaning of the "staff assistant" exception was discussed extensively in the trial court's opinion and order in Bender v. Bosz, Case No. A 54296/A-455/1974 (Cir. Ct. for Balto. City, March 8, 1979). The Circuit Court held that, in order to preserve the overall strength of the State Merit System, as well as to provide some limitation on the scope of the exception provided by TR §2-102(d), the "staff assistant" exception is limited to MDOT employees who are in charge of an area of responsibility and who report directly to the Secretary of Transportation. Although the trial court's decision in Bender was later reversed on a procedural point, Bender v. Bosz, 290 Md. 345, 430 A.2d 66 (1980), Judge Greenfeld's analysis of the "staff assistant" exception remains persuasive. The best interpretation of the statutory language is that staff assistants are unclassified but not independent and that MDOT has no independent salary-setting authority for these positions.

With respect to the "professional consultant" exception, there is no reason to construe this in other than the normal meaning of that phrase. The employment of consultants from time to time to provide professional expertise to MDOT would not be governed by the State Merit System Law.

                                      III
                   Procedures for Exercise of
              Independent Salary-Setting Authority

The pay plan prepared by the Secretary of Personnel includes "all classified and unclassified positions for which the Secretary has authority to administer pay...." Article 64A, §27(a). Thus, the salary of an MDOT "staff assistant would be included in the pay plan, because the staff assistant position, though unclassified, is one "for which the Secretary [of personnel] has authority to administer pay." See Part II.E above. Article 64A, §27(a) sets out the procedure for amending the pay plan to accomplish a salary increase, if funds are available in the budget for that purpose.

10
TR §2-102(c)(3) provides that the Deputy Secretary of Transportation, who is appointed by the Secretary with the approval of the Governor, "is entitled to the salary provided in the State budget."

For the reasons stated in Part II, however, the Secretary of Personnel does not have authority to administer the pay of MdTA, MTA, SHA, and MPC/MPA employees. These entities may determine base salaries and grant raises pursuant to their own procedures, subject, of course, to any applicable statutory or budgetary restrictions. For instance, if an entity requires a budget amendment to effectuate a raise, it must follow the procedures in §7-209 of the State Finance and Procurement Article. See also Part IV below.

                                    IV
                     The FY 1989 Salary Cap

In 73 Opinions of the Attorney General 43 (1988), we discussed in detail a budget restriction that sets a dollar amount cap on the salaries of various middle and senior management positions for FY 1989. We concluded that this salary cap "is a proper exercise of the General Assembly's constitutional power to condition or limit appropriations." The restriction, we observed, applied to both the salary adjustment appropriation in which the restriction is set out and the appropriations to the various Executive Branch agencies. "However," the opinion continued, "the restriction does not prohibit the Board of Public Works from paying, out of the General Emergency Fund, an amount that would bring a manager's effective income above the cap, if the Board concluded that unanticipated and exigent circumstances justify the payment." 73 Opinions of the Attorney General at 43.
The cap applies to a number of the positions that you inquired about, including Deputy Secretary and Assistant Secretary of Transportation, Highway Administrator and Deputy Highway Administrator, and Mass Transit Administrator.11 If the salary of a position subject to the cap is paid from appropriated funds, the restriction prevents a raise above the cap (except by the Board of Public Works from the General Emergency Fund), even if the entity has

11
The budget restriction also includes five positions at the MPA. After the Budget Bill for FY 1989 became law, the General Assembly enacted Chapter 541 of the Laws of Maryland 1988, creating the MPC and giving it independent salary-setting authority. Pending further analysis of the relationship between the two measures, we reach no conclusion about the applicability of the cap to these MPA positions.

independent salary-setting authority.12 "Independent salary-setting authority" is shorthand for the several provisions, discussed in Part II above, that authorize the head of a transportation entity instead of the Secretary of Personnel to set compensation. Such authority is not independent of the General Assembly's power to limit or condition the appropriations needed to fund salaries at these entities. See generally 73 Opinions of the Attorney General at 48-50.13

                                        V
                                  Conclusion

 In summary, it is our opinion that:
    1. The Maryland Transportation Authority, Mass Transit Administration, State Highway Administration, and Maryland Port Commission and Port Administration have independent authority to hire and set the compensation of their employees.

    2. The Secretary of Transportation has independent authority to hire staff assistants and professional consultants throughout MDOT but does not have independent authority to set their compensation.
3. All other units of MDOT must hire their employees in accordance with the State Merit System Law and compensate them in accordance with the pay plan developed by the Secretary of Personnel.
    4. Of the particular officials identified in your request, the following have their salaries set by the General Assembly in the budget: the Deputy Secretary of Transportation; the administrators of the Mass Transit Administration and State Highway Administration; and the Executive Director of the Maryland Port Administration. The following have their salaries set independently: the administrators and deputy administrators of the Maryland Transportation Authority; and the deputy administrators of the Mass Transit Administration and the Maryland Port Administration. The Assistant Secretaries of

12
If the salary of a position is not paid with appropriated funds, however, this restriction would not be legally effective. A restriction must be "directly related to the expenditure of the sum appropriated ...." Bayne v. Secretary of State, 283 Md. 560, 564, 392 A.2d 67 (1978).
13
The budget restriction does not affect "bona fide promotions, reclassifications, or new positions authorized by law." 73 Opinions of the Attorney General at 43 n.1.

Transportation have salaries determined by the Secretary of Personnel in the annual pay plan. In Fiscal Year 1989, certain of these positions are subject to a salary cap in the budget bill.

       J. Joseph Curran, Jr., Attorney General
       Jack Schwartz, Chief Counsel
          Opinions & Advice
       Elena Langrill, Assistant Attorney General