Study: Kirwan Plan Connects to Wages, Revenues Over Time

A study on the fiscal effects of the proposed Kirwan Commission plan for education funding, commissioned by plan supporters, suggests the presumed educational improvements may begin to “pay for themselves” by 2034.

SSMlogoStrong Schools Maryland, an advocacy group supporting the proposed plan for advancing Maryland public school funding over the next decade, has commissioned a report claiming the plan would have significant positive fiscal effects. The report, prepared by the Sage Policy Group, suggests the increased wages from stronger educational outcomes will lead to enhanced state tax revenues.

From coverage in the Baltimore Sun:

While Kirwan would begin paying for itself by 2034, the billions invested by Maryland taxpayers would be fully paid off by 2046, the report concludes.

The study also compares Maryland with Massachusetts, which passed the Education Reform Act of 1993 that is credited with improving the quality of the state’s schools. Before the act’s passage, workers from Maryland and Massachusetts made about the same salary. Today, the average Massachusetts resident earns more than $8,000 more than the average Marylander, the study says.

The study incorporates a variety of elements of the Kirwan plan, and seeks to translate them into economic drivers. From the study’s Executive Summary:

There are a number of reasons that better educational outcomes translate into superior economic ones:

➢Higher educational attainment is associated with higher lifetime incomes. The net present value of the lifetime earnings of someone with less than a high school diploma is roughly $450,000. That figure increases to $950,000 for someone who attends some college or obtains an associate degree, $1.7 million for someone with a bachelor’s degree, and $2.4 million for a graduate or professional degree.

➢Under the reform, high school students will be able to obtain vocational certificates, allowing for smoother entry into skilled trades;

➢Higher educational levels inversely correlate with the need for public services and criminal behavior, reducing costs of public assistance (e.g., Medicaid, food stamps, TANF) and incarceration; and

➢Broader availability of pre-K would free more parents to expeditiously return to the labor market.

The full study is available on the Strong Schools Maryland website.

Michael Sanderson

Executive Director Maryland Association of Counties