The Maryland Senate last week unanimously passed SB 538 – Community Colleges and Private Nonprofit Institutions of Higher Education – Funding, with amendments to fully fund the State’s share of the Cade funding formula.
State funding of Maryland’s community colleges is based on the Senator John R. Cade funding formula, which was established as law in 1996. The Cade funding aims to provide community colleges with predictable support for operations and to help maintain affordable tuition rates. The basis of the Cade formula is that community college costs be divided into equal thirds between the state, local government, and student tuition/fees.
Unfortunately, due to budgetary constraints over the years, the State’s Cade funding goal has not been met. The original intent of the Cade funding formula was for the State to provide 29% of community college funding by 2012. However, the state has adjusted the formula several times over the past ten years – delaying its commitment to fully fund the Cade formula.
The Governor’s Budget funds community colleges through the Cade program at $263.5 million. While this is a 5.5% increase compared to fiscal 2021 funding, it is actually less than would have been dictated by the Cade funding formula (by $26.6 million). The House Appropriations Committee and Senate Budget and Taxation Committee restore the $26.6 million cut in the Governor’s Budget.
In addition, the Budget Reconciliation and Financing Act of 2021 (BRFA) proposes dramatic, long-term reductions to community college funding by limiting formula increases to the level of projected general fund growth. Beginning in FY 2023, funding for community colleges would be restricted to the fiscal 2022 appropriation plus the annual percentage increase in General Fund revenues above the estimated annual increase in General Fund revenues. The Department of Legislative Services estimates that this proposal would cut overall funding for community colleges by approximately $147.5 million by fiscal 2026. Both the Senate and House budget committees voted to reject this proposal.
Instead, legislation that was originally introduced for the purpose of appropriating funds to be used for State-mandated tuition and residency waivers for community colleges, has evolved to fulfill the original intent of the Cade funding formula. SB 538 passed the Senate and is now in the possession of the House Appropriations Committee, along with its crossfile, HB 1067. The amended bill requires the State’s funding percentage to increase from 27% in fiscal 2022, to 29% in fiscal 2023, and 30% in fiscal 2024 and each fiscal year thereafter. House Appropriations Committee Chair, Delegate Maggie McIntosh, has signaled that her Committee will recommend that the State fully fund its share of the Cade formula.
Stay tuned to Conduit Street for more information.