Revised State Budget Paves the Way for Significant New Investment in Education

Photo by K Whiteford

Maryland lawmakers are poised to move forward with a budget that invests significantly more in schools than proposed in Governor Larry Hogan’s budget. The General Assembly’s budget changes also made cuts to address lower state revenue estimates released earlier this month, rejecting some of the new spending and tax breaks the governor proposed in his budget.

The $268 million decline in anticipated revenues, split between the current budget year and the next one that begins July 1, was largely a result of the federal government shutdown at the start of the year.

The House of Delegates and Senate have each passed their versions of the budget, featuring dozens of large and small differences. The two chambers will now use a conference committee to work out the differences between the two versions.

More Support for Public Schools

The most significant budget debate this year is about school funding. Policymakers are determining whether the state should take the first step toward implementing recommendations of the Commission on Innovation and Excellence in Education (Kirwan Commission), a body that spent two years developing a plan to create world-class public schools across the state.

The House and Senate budget plans take significantly different approaches to funding the Kirwan Commission’s wide-ranging policy recommendations. The House dedicated $320 million in new public school funding to begin implementing the Kirwan Commission’s recommendations next school year, with nearly half of this new funding going toward special education. The new support for special education is important because inadequate state resources have forced school systems to cut back in other areas in recent years in order to provide students with disabilities the services required under federal law.

Meanwhile, the Senate Budget and Taxation Committee set aside $225 million for the Kirwan Commission recommendations in the coming year, including only $33 million in new special education funding. The Senate plan would allow the state to provide additional funding conditional on the passage of legislation to require online marketplaces like Amazon to collect sales tax on purchases from third-party sellers that use their platform.

Making any significant new investments is an important first step to strengthen Maryland’s education system, which has suffered from eroding support over the last decade. However, the Senate’s approach would make it harder for local school districts to make progress. While revenue reforms like the one the Senate plan proposes are needed to ensure the state can invest in schools as well as other essential services like health care, adding extra conditions to public school funding means that Maryland children will face more uncertainty about whether they can count on receiving a great education.

Both chambers included more funding to recruit and retain teachers, provide additional services in schools where nearly all students are in low-income families, and expand prekindergarten. The Senate plan also set aside a portion of the money needed to continue implementing the Kirwan Commission recommendations in future years.

Regardless of what the two chambers ultimately agree on, it is still not guaranteed that the new funding will make it to classrooms at all. Because of Maryland’s unique governor-dominated budget process, legislators can set aside funding for a certain purpose in the budget year that begins July 1, but the governor can opt not to spend it. And, the governor has in the past opted not to spend money the legislature set aside for schools. The General Assembly can mandate spending for the following budget year (starting July 1, 2020) and future years by passing legislation.

Reduced Investments in Higher Education

There is a slight difference in how the two chambers handle state support for Maryland’s public colleges and universities.

The House reduced higher education funding by about $21 million, primarily from the University System of Maryland, based on a recommendation from legislative analysts. This recommendation was based on a judgment that the university system has used state funding to build up more financial reserves than necessary, without increasing services. The House made corresponding cuts to community colleges and Morgan State University. However, there is no evidence that these institutions have the same ability to absorb the cuts.

The Senate plan restores a portion of the funding for the University System of Maryland and Morgan State University cut by the House, and rejected the House cut to community college funding.

The Senate committee cut $1 million in administrative funding for the University System of Maryland, partly in response to reports that the university system chancellor has engaged in improper outside business activities. While it is encouraging that the General Assembly is monitoring public officials’ conduct, sufficient administrative funding is essential to ensure that the university system is managed effectively.

Other Areas Where the House and Senate Budgets Differ

• Private school vouchers: The House rejected the governor’s proposal to increase public funding for private school vouchers, while the Senate committee left in place $4.5 million in new state funding for private school vouchers. This is a misplaced priority at a time when every dollar counts for strengthening Maryland’s bedrock commitment to guaranteeing every child a great public education.
• Raises for police and correctional officers: Public safety officers get a raise under every version of the budget, but the Senate budget offers the most generous salary increases. This includes a 5 percent general salary increase for law enforcement officers starting July 1 and an almost 7 percent increase for correctional officers.
• Support for homeless youth: The House budget directs the governor to spend $1 million to aid youth experiencing homelessness, supporting provisions of the 2018 Ending Youth Homelessness Act. The Senate budget does not include this funding.
• Economic development: The House cut about $30 million from economic development programs to pay for other priorities. This was a wise choice, given the strong evidence that investments in basic services like education and health care are the most effective ways to strengthen our economy. About half came from the Maryland Technology Development Corporation’s budget following a recent audit that found significant issues in the agency’s management. The Senate budget restores about $13 million of these proposed cuts.