10 School Systems To See Drop in Direct State Funding

The Maryland Association of Boards of Education recently released an analysis of Governor Hogan’s education budget revealing changes in direct aid to education from FY2015-FY2016 for Maryland’s local jurisdictions. While overall state funding for education has been described as “record levels,” the collective effect of the proposed cutbacks and funding delays in the proposed FY16 budget mean that 10 county school systems will receive lower direct funds than last year, totaling a roughly $52 million.

Counties are the principal unit of local government in Maryland, and, unlike in many states, counties in Maryland are responsible for funding public schools, libraries, and local community colleges. While local boards of education develop local school budgets and oversee education-related spending, they are dependent on almost half of their financing from county governments.

The other half of funding for K-12 education in Maryland typically comes from the State of Maryland and federal grants. The Maryland Association of Boards of Education analysis is based on the Governor’s education budget highlights and funding table, which includes a county-by-county breakdown of state aid to education, including individual categories such as compensatory education, special education, and student transportation.

The funding table also includes two summary columns for state aid to education — one is total aid ($6.1 B)  and the other is total direct aid ($5.3 B).  While “total aid” is state budget analysts’ most-quoted figure, the figure that matters in practice is “direct aid” – which excludes costs paid for teacher retirements. From the perspective of a school board, it’s this funding that is actually available for use in providing teachers, supplies, equipment and facility maintenance in the annual operating budget. A drop in direct aid, even if there’s added state cost for pass-through retirement costs, means fewer dollars to provide education services. And such a drop – like that faced by ten counties this year – invariably translates to great pressure on the county government to provide offsetting funds, even at the expense of other critical county programs.

As described by the Maryland Association of Boards of Education, the Governor may increase education spending in future years,

The Governor has emphasized his commitment to sustaining the state’s investment in public education, and outlined a budget that maintains enrollment and formula-driven increases in spending. However, the proposed budget would not provide the more than 1% inflation factor increase in state aid, while pledging to restore a 1% increase in FY 2017 and in future years.

For more information, read the Maryland Association of Boards of Education Green Sheet here.

DLS Fiscal Briefing: The Big Picture on State Budget, Revenues, and Aid

The single most useful document in state finances each year is the Department of Legislative Services Fiscal Briefing. The document, officially released and presented today, details each component of the pending state fiscal plan and explains issues still pending before the General Assembly now in receipt of the Governor’s proposed budget.

Some highlights of particular value to county officials (links below go to specific pages):

Revenue Forecast
General Fund Snapshot
School and Local Aid By County
School and Local Aid Reductions
Capital Budget Summary

For more coverage on the budget proposal, see Conduit Street‘s continuing analysis.

To watch the initial DLS presentation of the Fiscal Briefing before the two legislative budget committees (January 26), view online through the Maryland General Assembly website.

The Actual State Share of School Construction Costs

Each county in Maryland contributes towards school construction costs for Maryland’s K-12 school system.  The total contribution of all counties statewide is significant. While the State has fulfilled its aim of investing $250M per year since 2004, and Governor Hogan has proposed to continue a high level of school construction funding, counties allocated $981M for capital projects in K-12 education in FY 2014 alone.

Belle Grove Elementary School, Anne Arundel County. Image courtesy of Anne Arundel County Public Schools Belle Grove Elementary School, Anne Arundel County. Image courtesy of Anne Arundel County Public Schools

The portion of building expenses that the State pays is based on the relative wealth of a county, providing more assistance to counties who are poor, according to a certain formula. Even in these counties, however, the State only contributes funding towards eligible costs, such as building and site development, renovation and limited renovation, leaving the counties to absorb all of the rest.

All counties, no matter how poor according to the State’s index, pay 100% of the following expenditures:

  • Site acquisition; leasing or purchasing school facilities;
  • Relocation and temporary storage costs;
  • Architecture, engineering, and construction inspection services; including master plans, feasibility studies, programs, educational specifications, or equipment specifications;
  • Renovation projects to replace, upgrade, or renovate building systems that have been replaced, upgraded, or renovated within 15 years;
  • Construction of administrative or support facilities, including administrative offices, warehousing, resource, printing, vehicle storage, and maintenance facilities; and ancillary construction costs such as: (1) Permits; (2) Test borings; (3) Soil analysis; (4) Bid advertising; (5) Water and sewer connection charges; (6) Topographical surveys; (7) Models; (8) Renderings; or (9) Cost estimating; and
  • Moveable equipment and furnishings

What this means is that county governments actually pay a much larger share of total school construction costs than the school construction formula implies.  For example, the official wealth-driven State share of a local school project in Wicomico County was 96% for FY 2014.  However, in the construction of the James M. Bennett High School, Wicomico’s most recently completed new school building, the final percentage breakdown on funding provided for the project to date is 52% Wicomico County; 48% State of Maryland and the budget estimates for the completed project anticipate a final funding split of 58% Local and 42% State.

school construction formulaactual school construction costs

In Anne Arundel County, the State share of a local school project has been 50% for several years.  However, in four recent construction and renovation projects, the actual State share of total construction and renovation costs was far lower – between 17% and 26%. For example in the construction of Belle Grove Elementary, the project total was $17 million, and the state contribution was $2.7 million, or 16.6%.  For examples of the state-local share of other projects in Anne Arundel County, see Anne Arundel County’s State Funding of Total Project Cost Anne Arundel 2013.

Here is a cost breakdown of Anne Arundel County’s Belle Grove Elementary renovation project from Anne Arundel County Public Schools:

  • Plans/Engineering & Ancillary Construction Costs $1,832,682.43
  • Construction Costs $13,920,755.02
  • Furniture, Fixtures & Equipment $864,292.68
  • Project Total $16,617,730.13
  • State Participation $2,768,000.00
  • % State Participation of Total Project 16.66%

formula ann anrundelanne arundel actual

The Hogan Budget – What It Means For Counties

Today, Governor Hogan unveiled the basics of his FY 2016 spending plan, with more details expected tomorrow as the budget itself is formally introduced. In this item, MACo will try to digest and encapsulate what we know and understand about this year’s spending plan, with a focus on county government funding programs.

-No new Highway User Revenue funding for county roads and bridges
-Reductions in formula growth for several education programs
-Program Open Space repayment canceled, and diversion of state transfer taxes
-Several other local areas flat-funded back to FY2014 levels

We will seek to update this item as new information becomes available. For general coverage of the Hogan Budget, check the Baltimore Sun‘s political blog coverage.

A Sun editorial from late Thursday previews the legislative debate on the budget proposal:

For all his talk of strong medicine and ending a spree of overspending in Annapolis, Gov. Larry Hogan’s first budget, at least as he presented it, did not sound so drastic. At his first news conference since his inauguration, he said he increased funding for K-12 and higher education, maintained investments in school construction funding, avoided state worker furloughs and layoffs and, at least for the moment, left in place funding to continue the Red Line and Purple Line transit projects in the Baltimore and Washington areas.

The Overall Essentials:

-Resolves the FY15 and FY16 shortfalls, and seeks to address the state’s structural budget deficit

-General Fund budget increases by 2.4% (or 0.5% after certain exclusions), many drivers are mandated appropriations

-Largest spending reductions are to medical providers, employee compensation, school funding, and unspecified agency reductions

-Record funding for education, though some programs cut from expected growth levels

-$1.4 billion for highway development, and funding for major transit lines intact while projects are to be reevaluated

The County Effects:

-$35m in local aid reductions (program details not yet available, but flat-funding of several programs cut earlier this month seem likely – police aid, local health departments, disparity grants, and community colleges)

-education reductions include eliminating the cost-of-living adjustment for the main school funding programs, halving the Geographic Cost of Education Index, and

-public school construction totals $250m in bonded projects, plus $30m in pay-as-you-go projects

-Deleting a statutorily scheduled $50m repayment of Program Open Space funds diverted in past years, and redirecting some funding from the state transfer tax to the general fund, instead of POS and related programs statutorily receiving those funds

-No additional funding for local roads and bridges through Highway User Revenues or similar distributions; FY15 grants for potholes ($10m to counties) and municipal roadways ($16m statewide) were discontinued

MACo will continue to provide updates as more details become available.

Maryland Association of Community Colleges Briefs the Senate Education Committee

Dr. Bernard Sadusky, Executive Director of Maryland Association of Community Colleges recently briefed the Senate Education, Health & Environmental Affairs Committee on the achievements of the State’s community colleges.

A few statistics Sadusky shared the committee include:

  • There are 23 community college campuses across the state, and additional classes are offered at 1,000 other sites across the state.
  • There over half a million individuals enrolled in community colleges, approximately 140,000 of them are degree-seeking students and 376,860 are working towards a certification.
  • The average age of a community college student is 26, over half of the students are female, and 68% of the students work part time while attending classes.

While testifying Sadusky told the committee, “We do whatever it takes to meet the needs of the community.”  Sadusky used the increase in associates degrees and certificates over the last five years, (38% and 47%, respectively) to emphasize the contributions that community colleges make towards a highly skilled workforce.

Sadusky stated that on of the largest challenges facing community colleges is affordability, explaining that the number one reason students drop out is because they cannot afford college. MACo wrote a letter last year in support of additional state funding for Community Colleges.

For more information, see our previous posts, MACo Hosts Community Colleges, Supports Funding and MACo and Maryland Community College Presidents Meet to Discuss Future Collaboration.

Maryland Analysts Critique Department of Education Study

As reported on WBAL, a study on charter schools ordered by the Maryland General Assembly is incomplete, resulting in conclusions and recommendations that cannot be substantiated, according to a letter written to legislative leaders this week by a top state analyst. Lawmakers required the Maryland State Department of Education to conduct the study, which it contracted with the Schaefer Center for Public Policy at the University of Baltimore to carry out, WBAL reported.

As described by WBAL,

“The study elements requested by the legislature were clearly not provided in a thorough or methodical manner,” wrote Warren Deschenaux, director of the Office of Policy Analysis at the Maryland Department of Legislative Services, which was required in legislation to examine the study.

The study stated that estimates for the amount and direction of the difference in funding between charter schools and traditional schools vary widely statewide.

“However, little data is provided to support the finding,” Deschenaux wrote.

For more information, see the full story from WBAL here and read the letter from the Department of Legislative Services here.

For additional background, see our previous post, Reports Recommend Revisions to Maryland Charter School Laws.


Reports Recommend Revisions to Maryland Charter School Laws

As reported in the Baltimore Sun, a newly released study by the Abell Foundation, a Baltimore nonprofit that researches education issues, states that Maryland should recruit successful charter schools to the state and consider granting them greater autonomy and control over teacher contracts.  The article describes,

The majority of Maryland’s charter schools are in Baltimore. In the last school year, 11,800 students, or nearly 14 percent of total city school enrollment, went to charters.

But even in charter-friendly Baltimore, said City Neighbors Charter School leader Bobbi Macdonald, its three schools are constantly chafing under rules that limit their ability to innovate. When school officials asked for freedom to decide how to evaluate teachers, for example, they were told to comply with the city’s rules.

In Frederick County, Tom Neumark and a group of families fought for five years to open a charter school focused on providing an education steeped in the classics. At every turn, it seemed to them, the county school board put up obstacles to the school’s opening.

The Maryland State Department of Education was required to report on charter schools this past year.  In the executive summary of their report they provided a list of possible recommendations, stating, “if the legislature agrees with the conclusion of this report that the current system shows enough promise to be expanded, then it should also consider actions, that would:

1) Create a state level Independent Chartering Board (ICB) that would be an additional, active statewide authorizer of charter schools;
2) Institute a time-limited subsidy to the LEA that partially subsidizes the per pupil cost of a new student entering a charter school; and
3) Create a state or local addition to the per pupil allotment of a charter school student to compensate for the facilities expenses that the charter school’s existence relieves the state and locality from providing.

For more information:

Read the full story in the Baltimore Sun here

Read the Abell Report here

Read the Maryland State Department of Education Study here.