One Step Closer, but Not There Yet: Maryland’s 2019 School Funding Legislation

The General Assembly took an important step forward for Maryland children this year, passing legislation to begin implementing the recommendations of the Commission on Innovation and Excellence in Education (also known as the Kirwan Commission) over the next three years. This legislation follows multiple years of eroding education funding after the Great Recession, which left schools with fewer resources to pursue higher achievement standards. The Kirwan Commission’s evidence-based plan would rebuild our investments in education with the goal of making Maryland schools among the best in the world. This year’s legislation begins making the investments needed to achieve the commission’s vision. Next year, policymakers should finish the job. That means enacting the commission’s full suite of recommendations, backing them with sufficient funding, and cleaning up Maryland’s tax code to make that funding sustainable.

This legislative session’s school funding debate proceeded along two parallel tracks:

• The state budget determined the total level of school funding for the coming budget year, which will begin July 1. This includes any new funding to implement the Kirwan Commission plan. The commission’s interim report detailed immediate funding priorities.
• Legislators also advanced a bill called the Blueprint for Maryland’s Future, which laid out long-term policy goals based on the Kirwan Commission recommendations and set funding levels for future years.

Track 1: The Budget

The Kirwan Commission’s funding request for the coming year included five major components:

• Strengthening state support for special education ($138 million)
• Raising teacher salaries ($75 million)
• Increasing services at high-poverty schools ($55 million)
• Expanding prekindergarten ($29 million)
• Tutoring and other supports for struggling students ($23 million)

However, the governor submitted a budget in January that largely preserved the status quo. The governor’s budget did allow the General Assembly to decide how to spend $36 million for new education initiatives, but the overall level of public school funding was not meaningfully different from past years. The governor declined to spend $200 million the General Assembly set aside in 2018 to fund Kirwan Commission recommendations, and he directed gambling revenues covered by the new “lock box” requirement to school construction.

The legislature ultimately passed a budget between the governor’s status-quo proposal and the commission’s vision. The approved budget cut $72 million from the commission’s funding request for special education—which will force school systems to continue bearing the bulk of the responsibility for special education—and slightly increased funding for prekindergarten expansion. Altogether, the General Assembly called for $255 million in new education funding in the coming budget year.

Track 2: The Blueprint for Maryland’s Future

As originally introduced, the Blueprint for Maryland’s Future bill laid out an ambitious education policy agenda, including a commitment to provide schools an additional $750 million in state funding in the 2021 budget year. Some of this money would continue to fund the commission’s short-term priorities, while the rest would support the next phase of the commission’s plan.

The General Assembly largely left the Blueprint’s broad policy goals in place, but delayed the state investments necessary to achieve them. The bill that passed both houses calls for $355 million in new funding in fiscal year 2021, plus at least $370 million the following year. The legislature also added new accountability measures to the final bill, including some of Gov. Hogan’s top priorities.

In an encouraging move, the General Assembly also passed a bill to improve the way the state collects sales taxes on some online purchases, with a portion of the resulting revenue earmarked for education. The bill would require online marketplaces like Amazon and eBay to collect taxes on behalf of third-party sellers that use their platforms. This reform would streamline tax compliance for small businesses and could generate significant new revenue. The Blueprint for Maryland’s Future bill dedicates up to $130 million of this revenue to schools. Strengthening Maryland’s revenue system is the best way to sustainably increase our investment in education while protecting other essential state services like health care and transportation.

What Lies Ahead

We should celebrate the legislature’s actions this year to improve Maryland schools for all students. Still, some of the most important work lies ahead.

The most immediate task is to secure Gov. Hogan’s cooperation. Maryland’s executive-dominated budget process gives the governor final authority to spend or withhold the public school funding the General Assembly added to the coming year’s budget—and in the past Gov. Hogan has sometimes chosen to withhold investments in education the legislature called for. Furthermore, the governor has not yet said whether he plans to sign the Blueprint bill. Although both chambers passed the bill by overwhelming majorities, a veto would force students to wait another year to see any improvements.

Fortunately, there are hopeful signs. Lawmakers added some of Gov. Hogan’s preferred school governance structures to the Blueprint bill, and the bill ultimately passed with significant bipartisan support. These considerations may encourage the governor to sign the bill (or at least not block it). If he does sign it, the Blueprint bill also includes incentives for the governor to fund the new education investments right away rather than delay them. Some of the new accountability measures in the bill are conditional on the governor agreeing to spend the new education money included in the coming year’s budget. In short, investing more in public schools would enable Gov. Hogan to achieve one of his top policy goals.

In the longer term, the General Assembly must lay the rest of the groundwork for implementing and funding the Kirwan Commission recommendations. Maryland schools are far behind the funding standard the state set in 2002, and even further behind in consideration of today’s higher-than-ever academic expectations. Next year, lawmakers should take two steps to put Maryland schools back on track:

• Enact a timeline to fund the full Kirwan Commission recommendations. The Blueprint bill includes some of the commission’s recommended reforms, but most will have to be scaled up to benefit all students. Other elements, such as increasing time for teacher preparation and collaboration, are not in the bill at all. The components of the commission’s plan fit together like pieces of a puzzle—implementing some but not others will not bring the same benefits. Lawmakers should enact a timeline for full implementation next year.
• Clean up and strengthen Maryland’s tax code to ensure sustainable revenue. Legislative analysts estimate that the Kirwan Commission plan will require $3.8 billion in new state and local education funding by 2030. The best way to sustainably increase our investments in education while protecting other essential services like health care and transportation is to clean up and strengthen Maryland’s tax code. Linking new investments to new revenues will also put the state in a better position to continue investing in schools when the next recession hits. Maryland can afford to build a world-class school system if we eliminate corporate loopholes and other special-interest tax breaks, continue to build on recent sales tax reforms, and fix our upside down tax code.