With the 2024 Legislative Session rapidly approaching, MACo is profiling some major issues that stand to gather attention in the General Assembly.
The Blueprint for Maryland’s Future (“The Blueprint”) sets ambitious goals to transform Maryland’s public education system and invests billions in state and county funding into schools. In prior legislative sessions, the Maryland General Assembly has made programmatic and technical tweaks to the landmark reform law. The DLS Issue Papers provide a snapshot of the current state of funding the Blueprint and when it may become unmanageable at the state level:
State education aid is projected to increase significantly in fiscal 2025, primarily due to projected enrollment increases and higher per pupil funding amounts set by the Blueprint for Maryland’s Future (Blueprint). The Blueprint Fund is projected to almost have sufficient revenues to cover both State and non-State aid expenditures attributable to the Blueprint through fiscal 2027, with an estimated shortfall of approximately $200 million that year. As of October 2023, the Maryland State Department of Education has certified that the school appropriations of 20 counties have met or exceeded the fiscal 2024 local effort requirement.
Next fiscal year (FY 25), State aid to local education agencies (LEAs) increases under the Blueprint:
In fiscal 2025, public schools are expected to receive an estimated total of $9.0 billion in State aid, which represents a 4.5% increase over fiscal 2024. Of this amount, $8.1 billion will flow directly to local school systems. Total funding changes are largely attributable to projected changes in student enrollment and greater per pupil funding amounts for major aid programs. Exhibit 1 shows estimated State aid for education in fiscal 2024 and 2025.
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Overall funding for the Blueprint for Maryland’s Future (Blueprint) programs, which include Concentration of Poverty Grants, Transitional Supplemental Instruction, Full-day Prekindergarten, Career Ladder, College and Career Readiness, Blueprint Coordinator funding (in fiscal 2024 only), Education Effort Adjustment, and Transition Grants, totals $705.8 million in fiscal 2025, an increase of 25.7% over fiscal 2024. This overall increase in Blueprint program funding is largely driven by an estimated $105.3 million increase in Concentration of Poverty Grants and is somewhat mitigated by a decrease of $8.7 million in Transition Grants and an estimated decrease of $11.9 million in Transitional Supplemental Instruction, which are designed to decline until being fully phased-out after fiscal 2026.
Part of this increase is the Blueprint’s additional funding for certain demographics of students. Compensatory education aid, however, decreases:
Compensatory aid is estimated to decrease by $18.4 million (1.1%). This funding decrease is primarily due to a projected decline in free and reduced-price meal student enrollment, which is assumed to have peaked for fiscal 2024 funding and is only partially offset by a $40 (0.5%) increase in per pupil funding. Funding for special education and English learners increases in fiscal 2025. Special education formula funding is estimated to increase by $43.7 million (9.4%), largely due to a $750 (9.4%) increase in per pupil funding. English learner funding increases by $55.5 million (11.7%), which reflects a $323 (3.7%) per pupil funding increase and projected enrollment growth of 8.5%.
In order to meet its Blueprint obligations, the State established the Blueprint Fund. It is expected to run into financial trouble starting in fiscal 27:
The Blueprint Fund is a special fund established to hold revenues dedicated to implementing the Blueprint. Since fiscal 2021, contributions to the fund have included gaming revenues deposited in the Education Trust Fund; sports betting revenues; certain sales tax revenues; Department of Legislative Services revenues; federal funds for COVID-19 relief swapped with Blueprint special funds; and some one-time revenues.
In fiscal 2024, Blueprint Fund revenues total $4.3 billion. This amount includes a starting balance of approximately $2.0 billion and a diversion of $900 million from the State Reserve Fund, of which $500 million was in the Governor’s fiscal 2024 budget as introduced and $400 million was added by the General Assembly. In fiscal 2025, revenues are projected to total approximately $4.0 billion, which includes an estimated starting balance of $2.6 billion.
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… the Blueprint Fund covers approximately $1.7 billion in State aid and non-State aid expenditures with an ending fund balance of $2.6 billion. In fiscal 2025, approximately $1.9 billion in expenditures is covered with an ending fund balance of $2.1 billion. Based on current projections, the fund will almost have sufficient revenues to cover expenditures through fiscal 2027, with an estimated shortfall in that fiscal year of approximately $200 million.
Local funding also increases under the Blueprint. According to the DLS Issue Papers, here’s where county funding for Maryland’s schools currently stands:
The maintenance of effort (MOE) law requires each county government, including Baltimore City, to provide as much per pupil funding for the local school system as was provided in the prior fiscal year. The per pupil MOE level each year is based upon the greater of the prior year FTE enrollment and the three-year moving average of FTE enrollment. Under the Blueprint, counties must provide the greater of the per pupil MOE and the combined local share (accounting for local share relief) of multiple major aid programs.
As of October 2023, certified local appropriations are not available for 4 jurisdictions (Baltimore City and Calvert, Queen Anne’s, and Somerset counties), and the Maryland State Department of Education has certified that the school appropriations of 20 counties have met or exceeded the fiscal 2024 local effort requirement. In total, 9 of these counties (Anne Arundel, Baltimore, Carroll, Charles, Frederick, Harford, Howard, Montgomery, and St. Mary’s) exceeded their local effort requirement by 2.0% or more.
