School Formula Commission Continues: Focus on Equity, Regional Costs, MOE

The “Blueprint for Maryland” formula workgroup met this week, continuing its look at components of current and potential school funding models – but isn’t making any decisions yet.

The latest meeting of the Kirwan Commission’s formula funding workgroup was August 1, and the members dug into several areas of school funding. Their discussions remained expository and preliminary, as the group has not yet turned the corner into taking votes or making even foundation-level decisions.

The meeting materials are all available online:

This presentation, from education researchers based at Rutgers University, sought to compare Maryland’s education spending across jurisdictions to that in other states. Their top-level analysis: Maryland grades a “B” for overall effort, but is slightly “regressive” in distribution, since the lowest poverty areas receive (slightly) more total state and local funding than the highest poverty areas.

Several items raised during the Commission’s prior meeting on July 24 were clarified and expanded by the Department of Legislative Services staff. Perhaps the item of greatest interest was a consolidated graph showing funding trends in Maryland education:

School funding trends

The discussion about these trends focused on three time periods:

2002-2008 was the phase-in of the State’s “Thornton” plan, where state funding was deliberately increased, nominally to bring the state contribution to match that of the counties. 2008 funding, labeled on the chart, shows that this goal was essentially accomplished.

2009-2014, essentially the period of the “great recession,” saw both state and local contributions inch forward, but at a lesser rate. Staff discussed the economic effects behind the state slowdown in funding. Absent from that discussion, but clearly a factor, were state decisions altering the state/county fiscal relationship. The massive redirection of more than $300m/yr in local transportation revenues in 2009 (and each year since), followed by the phased-in shift of over $250m/yr in teacher pension costs surely contributed to counties’ ability to find discretionary funding for schools during this time period (and beyond).

2015-2019 showed a reversal of that trend, where modest state funding increases were lower than those from county governments. Interestingly enough, the endpoint of the analysis shows that the state contribution and county contributions are, once again, nearly identical.

Another follow-up discussion, this visual example of a typically-structured Tax Increment Financing instrument was used to add clarity to the debate from July 24, where members speculated about the appropriate treatment of such property under education wealth formulas.

An additional analysis of school funding, along with the mechanics of the current “Maintenance of Effort” law. An additional county funding analysis was discussed for some time, as members digested various time periods — the deep-recession wave of MOE waiver requests, several subsequent years of county funding (as state cost shifts dominated county budget decisions), followed by a period where a state-imposed “escalator” altered the county contribution calculation.

The Commission invested much of its afternoon session discussing the cost of living, or cost of education, across different regions of the State. The current funding formula includes the so-called Geographic Cost of Education Index as a state-only additional funding layer, tied to regionally-developed values for “costs of living” (labor, etc) but also the “costs of education” (recognizing harder-to-reach school populations in some demographics).

State-paid consultants had previous developed an alternative model, styled as a “Comparable Wage Index,” initially proposed to alter all school funding across the State. The August 1 presentation, however, reframed that tool to look much more like the current GCEI — an upward-only (i.e. “truncated”) adjustment for high-cost areas, that could be applied to only limited parts of state funding – namely, the base “foundation” funding stream.

The August 1 discussion about the CWI (and the current GCEI) did not result in any conclusions, but its potential consideration would have substantial consequences for the intra-jurisdictional distributions within the State.

The staff’s elimination of any downside calculation, by “truncating” the formula to only have a positive effect, seemingly removes the potential for a CWI (or revised GCEI) to have some of the most massive distributional effects posed by the consultant’s report from prior to the Kirwan Commission’s formation.

A final presentation for the day focused on the full Kirwan Commission’s recommendations on a “career ladder” for teachers, and related recommendations and expectations for greater investment into the teaching profession.

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To watch video coverage of the August 1 meeting, or to see the full range of materials presented, visit the Kirwan Commission website.

The formula funding workgroup is scheduled to meet again on August 22, and will continue to delve into distribution and calculation issues, Their stated schedule is to submit findings and recommendations to the full Kirwan Commission this fall.

 

Michael Sanderson

Executive Director Maryland Association of Counties
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