The Formula Funding Work Group, created to inform the Kirwan Commission on Innovation and Excellence in Education, issued its recommendations. The bottom line to counties: fully fund the “local share” (as implied by local wealth) of the full range of new state programs – phased in to total $9.3 billion by FY 2030.
The Formula Funding Work Group, after working for months toward recommendations on the financial mechanics of the Kirwan Commission vision, completed its work on October 15. The group adopted, with two abstentions coming from the Administration and county representatives, a set of principles that should guide the continued development of this ambitious school funding plan.
As always, the materials from the meetings are all available online, and the full meeting video is available to stream from the same site.
The key elements of their decision have changed modestly from last week’s preliminary draft, but the framework remains the same. The state will stagger and phase in the various elements of the Kirwan funding plan, but reach its goal by FY 2030. The counties will be required to fund their share of each of these new programs, a more stringent and demanding requirement than current law. The essence of the plan is laid out in a four-page bullet point document.
State Funding Changes – Early Years More Affordable
- The State funding phase-in smooths out the costs to the state to be more equal across the next 10 years. The cost over current law by FY 2024 would be roughly $820 million, contrasted with the $1,722 million in added costs in that year under the preliminary recommendations of the full Commission. This comports with the General Assembly’s language in legislation passed in the 2019 session.
- The Work Group agreed to modify the Concentration of Poverty program, to become more heavily State-funded, following on conversations pointing this direction at last week’s penultimate meeting. The new provision would have the State fully fund the program in all counties, except those that benefit from the 40% floor on State funding under the categorical funding programs – i.e. the State’s wealthiest counties. Only six counties would have a local obligation.
- The Work Group also approved, without substantive discussion, two technical changes “underneath” the funding formulas. The enrollment used for local funding requirements will be the “greater of” the latest enrollment figure or a three-year rolling average – making modest distributional changes. And the “escalator clause” currently affecting roughly half of the counties will be eliminated. This latter decision tracks with the move to adopt “adequacy” as the guiding element of State requirements on county funding – the counties currently facing the escalator will each be required to fund their local share of the new state programs, and increase funding to do so, so its elimination may be of little or no consequence.
County Funding Requirements – A New Ballgame
- The Work Group followed up on its conversations from last week by adopting the framework form last week’s meeting – that each county will be obligated to fund its implied share of not only the State’s foundation formula, but also the categorical funding programs.
- Recognizing the dramatic new funding obligation this would place on several jurisdictions, the group voted to “phase-in” this recommendation. Rather than vote on a particular time period for the phase-in, the group merely recommended that a phase-in be applied to recognize the jurisdictions’ various challenges. So, the fiscal effects for jurisdictions currently below those levels would not be as pronounced as the early-year estimates distributed today would suggest. (Baltimore City, shown there as facing a $138m funding obligation in FY 2024, would have unspecified extra time to reach that figure and beyond)
- Following a discussion among Work Group members, the motion also included recognizing “other funding for education” by local jurisdictions, beyond those within the school budget and recognized in the traditional “maintenance of effort” calculation. The group voted to allow (with specifics and definitions yet to be determined) counties to meet their new funding obligations by way of funds supporting education, but not necessarily within the school budget.
So… the Price Tag…
On its surface, the plan is a $4.0 billion plan, expressed in FY 2030 dollars – the year of the complete roll-out. $2.77B to the State, and on documents shared at today’s meeting, another $1.23B in county funding. The county share of $9,279 million in FY 2030 (which would be unchanged by the various phase-ins still undetermined) is set alongside a speculated “Projected Current Local Appropriations.” That table follows:
Staff, during today’s meeting, made clear that the first column shown for each county was created using some “trends” — basically assuming that each county’s next ten years for school spending would effectively mirror their last several years. So, the $8,051 million figure essentially assumes that each county would “go back to the well” for any tax increases, budget shifts, or other efforts that enabled them to increase school spending in recent years. And then, on top of doing that, the “Difference” column would be their fully phased-in funding obligation in each year.
An analysis of current school funding levels, but only adjusted by the mandates in current State law, is not yet available. MACo will endeavor to develop an estimate, to place the new county funding obligation into a clearer context.
One final table, distributed but apparently not yet available online, presents the additional State funds and the above-trend county funds, by county:
Read MACo Executive Director Michael Sanderson’s “live tweets” during the October 15 decision meeting: