Gov. Larry Hogan’s proposed operating budget for Fiscal Year 2016 has triggered anguish and concern expressed by advocates in news reports and in media commentary over proposed cuts to state funding for education, particularly in Baltimore city and Prince George’s County, two of the state’s largest school districts.
The substance of the angry buzz, laced with a heavy dose of blame and finger pointing over the education budget, falls primarily into two categories — math and perception of the math.
However, the ultimate outcome of the prevailing emotion and concern, and the successful resolution of this fiscal challenge in Annapolis will be directly related to how well the governor and lawmakers work together on an important third category — fiscal reality.
First, the education funding math for Baltimore city and Prince George’s County is compelling for difference reasons.
Under the governor’s current budget before the Maryland General Assembly, Baltimore would experience a $35 million reduction in overall state aid for K-12 education — a 3.9 percent decrease from the current fiscal year. This includes a $15.3 million reduction in Foundation aid, the largest single local school aid category, which includes Geographic Cost of Education Funding for jurisdictions where education operating costs are greater.
City schools would also experience reductions of $9.9 million, $4.5 million and $6.4 million in aid targeted, respectively, for disadvantaged students, special education and students with limited English proficiency and related comparative challenges the city school system faces.
Student transportation was the only category where city schools would receive an aid increase — approximately $330,000 — over FY 2015.
Conversely, Prince George’s County’s proposed state education aid budget is a study in contrasts. The county would experience an overall $2.9 million increase in education funding, but Foundation Aid would be reduced by $7.3 million — a 1.3 percent decrease — while aid for economically disadvantaged students, special education and student transportation would increase a combined $10.4 million.
Other aid to support Prince George’s students with limited English proficiency and to compensate counties with less-than-average per pupil wealth would increase by $10.7 million.
As for the perception of proposed education funding reductions, discussion of the issue in media reports and commentary has targeted a number of reasons for them, a few of which are:
– The governor only deployed half of the potentially allowable, but optional, Geographic Cost of Education Index funding.
– Inadequacies exist in the formula by which state funding for education is calculated, including weighing Baltimore’s property tax base too heavily and family incomes too lightly.
– Too aggressive use by the city of tax incentives to facilitate development, which, critics argue, deprives the city of tax revenue from growing property values.
– Developers are faulted for accepting the tax incentives, as if the incentivized developments would have occurred anyway without help from the city with the state’s highest property taxes.
One columnist called city politicians “spineless and easily snookered” for supporting tax incentives for job-generating business development.
Others suggest that state funding for city public schools is suffering from the “unintended consequences” of the city regaining economic development momentum and therefore not being eligible for as much funding under current formulas related to wealth.
Consider the irony of the message from some education advocates who appear to be arguing, in effect, that Baltimore’s education funding future rests on the city remaining statistically poor.
This is not to say that outrage from angry critics of education aid reductions has no relevant nuggets of substance. But the truth is, no one wants an underfunded school system in a city that is a major driver of the state’s economy. Not parents, not educators, not elected leaders and certainly not developers.
This brings us to important realities that frame the prospects for resolving the FY 2016 state education funding challenges.
The most prominent reality is that Gov. Hogan is irrevocably committed to budgeting for state spending levels that do not exceed revenues to the state’s general operating fund.
This is a core element of his administration. It’s easy to understand when you consider that spending from the state’s general fund has exceeded operating revenue in 10 of the 15 fiscal years since 2000, according to state data.
A tandem reality is that the General Assembly will ultimately pass a balanced budget. It’s required by the state Constitution.
Maryland lawmakers have only limited options if Gov. Hogan sticks to his underlying budget prerequisite that spending not exceed revenues. They can’t add to a governor’s proposed budget. They can only cut and potentially reallocate. Gov. Hogan has said that he is willing to work with lawmakers, who are in the process reviewing budget options.
Lawmakers should take the governor up on his offer and work with him and local elected officials to address budget shortfalls, anomalies and challenges and craft a stronger spending plan within the governor’s parameters.
Or to put it plainly, cut somewhere else to keep education funding strong. And if March revenue estimates allow, fill in those elsewhere cuts with a late-session supplemental budget appropriation.
Along the way, particularly in Baltimore, remember this fundamental tenet: Successful economies — and ultimately robust funding for schools and other city services — are built by nurturing business development, not discouraging it.
Donald C. Fry, president and CEO of the Greater Baltimore Committee, writes a monthly column for The Daily Record. His email address is email@example.com.