Kirwan Blueprint Bill Heads to Governor, With a “Trigger” Provision

The Kirwan Blueprint bill for education funding, HB 1300, passed the House as expected on Tuesday night. A “trigger” mechanism added by a late amendment offered some skeptics comfort – but how does it work?

The Kirwan Blueprint bill has passed the General Assembly. The House, as expected, voted to concur with the Senate-adopted changes to the bill, with a veto-proof vote. But, will that veto override be required? Maybe that comes down to one provision, added in the Senate, offering a “trigger” for relief from its fiscal mandates.

HB 1300 – main information page

Fiscal Effects incorporating House and Senate changes

As of this writing (Wednesday morning), a full “reprint” of the bill in its final form is not yet available. The “enrolled bill” will likely be posted in the days ahead on the main information page linked above.

The New “Trigger” Provision

For now, the simplest place to view the “trigger” provision is in a floor amendment offered by Senate Majority Leader Nancy King. Its central provision holds:

KirwanTrigger

The Senate floor discussion offered some context for this amendment, but its plain reading leaves some interpretation open.

First – the Board of Revenue Estimates is an existing body that convenes periodically to review the Maryland economy and actual revenue trends, and develops a forecast for state revenues. The bill, above, references a specific interval – a decline in the estimate of state general funds occurring between the March estimate of a given year (used to balance the budget enacted by the General Assembly) and the subsequent December estimate (the last revision prior to the next General Assembly session). In lay terms, from the legislature’s point of view, this is a fair measure of “how much worse did things get while we were away?

Second, the decline in the revenue forecast to trigger the muting of Kirwan funding formulas is, by all accounts, fairly steep. A drop of 7.5% on a general fund budget of roughly $18 billion translates to about $1.4 billion. That is a larger magnitude of revision than triggered by even a substantial recession. So, the “trigger” would not be activated by any relatively ordinary variation in capital gains, modest market slowdowns, or the like.

What happens if the “trigger” gets activated this year? Amidst the economic uncertainty arising from the coronavirus outbreak, it seems conceivable that the March-to-December revision could hit that daunting mark, particularly since the Board declined to make any revenue adjustments at its recent March meeting. So, if it does drop by 7.5%, then what? By a plain reading of the language, the statutory funding levels required for FY 2022 would be limited to an inflation-level increase over those of FY 2021 (likely a very low number, as cost-of-living measures tend to sputter during recessionary times). How that change would be incorporated into FY 2023 and beyond was the subject of some floor questioning in the Senate, but that interpretation might not be dispositive.

Governor Hogan, Ball’s In Your Court

The Governor has publicly expressed concerns about the fiscal mandates under the Kirwan plan, and the lack of specificity in how it would be financed. The General Assembly has passed pieces of an answer to these concerns – enough to persuade several republican senators to support it in its final version.

Will the Governor still veto the final bill? The answer may lie in his comfort with the “trigger” provision, and potentially in the six lines of text excerpted above. The House and Senate both supported the bill with sufficient numbers to override a veto, so the Governor’s actions may prove to be less consequential than once imagined.

Michael Sanderson

Executive Director Maryland Association of Counties
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