This article is part of MACo’s Policy Deep Dive series, where expert policy analysts explore and explain the top county policy issues of the day. A new article is added each week – read all of MACo’s Policy Deep Dives.
Maryland is well into the decade-long implementation of the Blueprint for Maryland’s Future. Widely cited as the most ambitious government-led initiative to be undertaken in Maryland, the plan and implementation are top of mind for county governments who regularly allocate half or more of their annual budgets to the local school systems. With the 2025 legislative session on the horizon, we take a brief look at the early implementation, assess the fiscal forecasts and the actual costs to counties, and consider the accountability measures designed to ensure the program reaches its goals. Then, an eye on what may be shaping up for the year ahead.
BLUEPRINT IMPLEMENTATION STATUS REPORTS
As part of Blueprint implementation all school districts are required to submit extensive and detailed reports on their progress to the Maryland State Board of Education and the state Accountability and Implementation Board. The most recent batch came to the state between March and May of this year, in two stages and were intended to highlight challenges and next steps. An overwhelming sentiment of the reports are around funding challenges that pertain to required reallocations and lack of sufficient funding for the requirements of the law. A second challenge touches on the recruitment and retention of a diverse and qualified staff based on the Blueprint mandates, at a time when staffing is a challenge across almost every government sector regardless of the constraints of the new Blueprint requirements. The third is, generally, lack of engagement from external stakeholders, despite efforts, as it relates to certain pillars of the Blueprint. Pre-k expansion and college and career readiness were common themes in that regard.
MOST RECENT BLUEPRINT FORECAST MISSES 2025 REALITY
The nonpartisan Department of Legislative Services (DLS) issued a report in January of 2022 based on cost projections from August of 2021. That document is the most recent comprehensive snapshot of the financial impact the Blueprint would have on local governments. As with most forecasts, it has proven imperfect, for multiple understandable reasons.
The forecast has already failed to keep up with actual costs and requirements. The actual “Minimum Local Effort” funding requirements issued county-by-county from the state this spring, during the FY25 budget season, came in totaling $338 million more than the January 2022 forecast. This increase comes despite a meaningful drop in student enrollment by nearly 20,000 students since pre-COVID counts.
But despite this cost escalation, counties have risen to the challenge, complying with the mandated funding. Further, they continue to fund education in many categories not even reflected in the state-mandated “Minimum Local Effort.” By the adoption of the of the FY25 budgets, the counties collectively had funded their local school systems (incorporating all operating funds except debt service) by $864M over the DLS fiscal note’s official forecast (at the time of the original Blueprint bill’s passage), and $527M over the state’s mandated Blueprint funding level.
This January 2022 report also made several mentions of forecasted local revenue growth having the potential to alleviate some of the mandated financial burden, specifically a 3.9 percent, year over year increase in revenue from the existing local property and income tax rates.
From the report:
Revenue growth rates that approach or exceed the anticipated rate of growth in education spending over the next dozen years would allow local governments to implement the Blueprint with minimal financial stress. DLS compared its projection of the growth in local appropriations for education from fiscal 2022 to 2034 under the Blueprint to the revenue attainment from applying current income and property tax rates to the expected growth in net taxable income and county assessable base over the same period. At the statewide level, revenues from income and property taxes are expected to rise at an average annual rate of 3.9%, while local appropriations for education are expected to grow at a slower rate of 2.9%
Additionally, the suggestion was made that the local burden would be more manageable if other local government operating costs were kept flat or lower than normal.
From the report:
For those jurisdictions projected to incur a major impact, favorable trends in revenue growth may provide immediate relief along with holding other operating spending growth at or below the recent trend.
WHAT HAS HAPPENED SINCE THE JANUARY 2022 REPORT?
First, and maybe most obviously, the broader circumstances did not really comply. Since the 2022 report, it has been widely reported that revenue growth fell short, which is clear from the most recent DLS report on the county revenue outlook in FY2024.
“…major revenue sources are either experiencing minimal growth or decreases from the prior year budgeted amounts. This revenue scenario results primarily from ongoing inflation and higher interest rates which have severely affected the local housing market in most jurisdictions. In addition, recent decreases in capital gains and investment earnings have dampened projected revenue increases from the local income tax
Governor Moore’s FY25 budget assessment also cited a continued weak outlook statewide:
“…revenue growth has slowed considerably through 2023. Total current year General Fund revenues are projected to grow only 0.6 percent in FY 2024, with growth of only 1.8 percent for FY 2025.”
Secondly, the idea that local governments could keep other operating costs steady or reduced was ambitious in hindsight. General inflation, and specifically labor costs, skyrocketed during this time period forcing local governments to take on substantial year over year increases just to keep services functioning at maintenance levels. This is in addition to unfunded mandates from the state legislature continuing over recent years – notably major local funding required for police reform implementation, medication-assisted treatment in local detention centers, environmental mandates, and a range of other State policy changes.
Third, and as previously mentioned, the Blueprint costs to local governments ballooned by more than a quarter billion dollars in that time, even while enrollment dropped by nearly 20,000 students. And that is only based on the most recent projections that are approaching three years old.
COUNTY FUNDING FOR BLUEPRINT IMPLEMENTATION
An increasing number of local jurisdictions have faced fiscal strain to meet their Blueprint funding obligations. Counties have cut non-education services, increased property tax rates, and accessed one-time reserves or fund balances to support these ongoing costs. And even with this effort, the public debate around education offerings has made hostile headlines — with many communities’ ire stoked that popular education functions are being “sacrificed” in order to fully support new programs mandated in the Blueprint. The call to support music/arts, sports programs, gifted & talented offerings, and target teacher/student ratios has become the brightest spotlight in the county-level debate over funding implementation.
County governments, with rather narrow ability to direct funding within their school budgets, face a vexing situation with escalating costs of mandated programs, popular support for even further spending, and starkly limited local revenues to meet those expectations. As the Blueprint components continue to ramp up in years ahead, the State-required designation of 75% of funding to follow a student to their programs will continue to create this local-level friction.
ACCOUNTABILITY AND METRICS OF SUCCESS
Even while the Blueprint roll-out faces its own challenges, both policy-wise and fiscally, worrisome school outcomes remain in focus. The idea that the Blueprint will be an economic engine for the state, including within the local jurisdictions, has merit if the plan helps to yield waves of more college-ready and career-ready students, and attracts more educators to our top-level school settings. And a major component of the Blueprint law is implementation accountability, a deliberate policy goal to ensure the maximum benefits from the newly invested resources. But as of an April interview with Dr. Carey Wright, the State Superintendent of Schools has questions about whether school success is being seen and measured effectively.
From a Baltimore Sun interview:
“(Dr. Wright) is skeptical of a disconnect between 76% of Maryland schools having a rating of three or more stars out of five on the Maryland Report Card compared to only 23% of students scoring proficient in math and 47% scoring proficient in English language arts on a statewide standardized test.
“That doesn’t ring true,” Wright said of the Maryland Report Card grades. “You can’t have three-quarters of your schools being rated as excellent, if you will, and then not seeing student achievement almost commensurate with that.”
Student testing scores are clearly not the only measure of educational outcomes, but the massive state and local investment into education to support the Blueprint will surely be accompanied by both metrics and consequences to help underscore its effect.
WHAT IS ON THE HORIZON?
Recent remarks from the Governor, at the conclusion of the 2024 MACo Summer Conference in Ocean City, signaled an understanding that these shifting conditions may necessitate a change on the horizon:
From a Baltimore Sun article:
“The Blueprint conversation is just one of many difficult discussions that we will have over the next 12 months,” Moore said Saturday during his closing speech at the Maryland Association of Counties summer conference in Ocean City.
He continued:
“As Maryland heads into murky fiscal waters, Moore said that “everything is on the table” regarding financial adjustments, but committed to prioritizing funneling dollars toward health care, child care services, and education.”
He went on to invoke legislative history as having taught us that laws of enormous potential must always be refined after they are passed.
From a Maryland Matters article:
“But if there’s one thing that legislative history has taught us, it’s this: Laws of enormous potential must always be refined after they are passed,” Moore said.
Those words, if applicable to education, likely are welcome to the vast majority of stakeholders tasked with the implementation of the Blueprint, but facing multiple challenges in doing so. Counties understandably feel conflicted and frustrated about how the rollout is going, particularly around the narrative that they are underfunding schools when the truth is far, far, from it – and with so little clarity as to the true funding obligation.
School districts are being asked to accomplish one of the most monumental lifts in education reform, in any state. The Maryland State Department of Education and the Accountability and Implementation Board are required to ensure it all works despite these persistent challenges. Counties are stretching to support their share of the costs, with more each year captured by the new funding mandate, but face simultaneous stresses on revenues and other funding needs. The effort is extraordinary so far, and the promise of the educational engine and outcomes that the Blueprint envisions is worth striving for. But as the Governor said at the 2023 MACo Summer Conference, perhaps Maryland will need to be “stubborn on values, but very flexible on tactics.”
