Hogan Proposes Supplemental Budget: Funds Included For Police, Colleges

Today Governor Hogan will provide more details about his first supplemental budget of the session, to be released later today. It reportedly includes additional funding for police, colleges and economic development. Two million will go to the Baltimore Police Department to support compliance with its consent decree with the U.S. Department of Justice. Ten million will go toward addressing opioid addiction – the first installment of his plan, announced about a month ago, to spend $50 million on the crisis. He intends to spread the $50 million over five years. The supplemental budget also includes extra money for higher education and economic development.

Disappointing some, it includes nothing for the Baltimore City School System. From The Baltimore Sun

“There are funds available in the budget for other priorities,” Hogan spokesman Doug Mayer said Thursday.

Nevertheless, the head of the House of Delegates budget committee expressed surprise and disappointment that the new spending plan didn’t address the city’s plight or the budget woes in nine counties where student enrollment — and therefore state funding — also has declined in the past year.

“We’re talking about the quality of education we can be and should be committed to in 10 districts,” said Del. Maggie McIntosh, the Baltimore Democrat who heads the Appropriations Committee.

Supplemental budgets, which address spending needs that might not have been apparent at the time of the state budget’s release in January, are also a tool used by governors in their annual tug-of-war with lawmakers over budget priorities. By either including or withholding funds, a chief executive can bargain for funding priorities that the legislature may not share.

McIntosh said she made concessions to the administration on several issues and thought the funds would be coming.

 

 

Bill to Offset Declining Enrollment Moving in Legislature

House Bill 684, “Education – Grant for Declining Education Aid,” has passed the full House and crossed over to the Senate. MACo supports HB 684, which would help to offset the sudden drop-off in education funding to jurisdictions with declining enrollment, ensuring school systems can offer equivalent courses and programs, even with fewer students.

The bill was amended to allow jurisdictions with declining enrollment average their student populations over three years, rather than account for single-year changes, and allow them to factor all-day pre-K student populations into total enrollment. The House Appropriations Committee also amended the bill to provide grant funding for three years instead of just for one year, as was originally proposed.

Five Jurisdictions–Baltimore City, Calvert County, Carroll County, Garrett County, and Talbot County–are slated to lose a combined $45M in state education funding in 2018. Baltimore City is the most deeply affected, with a $38m loss in year-to-year total state education funds.

From the MACo testimony,

Counties value public education as a high priority, and an essential service and benefit to the citizens and the economy. State Budgeting formulas and requirements complicate this commitment, especially because nearly all state education funding is distributed on a per-pupil basis, meaning that the more students a school system serves, the more funding it receives.

By contrast, when the number of students declines, schools can experience a sudden drop in funding. This dynamic can strain local budgets – reflecting the reality that not every dollar spent in a school system is truly a “variable cost.” A sudden drop in students across a county school system may mean some cost savings in bus transportation and meals service – but may not have any effect on “fixed costs,” which account for most system-wide expenditures on education and administration.

To learn more about Maryland’s school budgeting formula, read “Why do Five Jurisdictions Lose $45M in Education Funds?” on MACo’s Conduit Street Blog.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Community College Collective Bargaining Bill Remains in Committee

Neither the Senate Finance Committee nor the House Appropriations Committee has taken action on a prescriptive, one-size-fits-all collective bargaining bill that would affect all Maryland community colleges. HB 871 / SB 652 failed to move prior to yesterday’s “crossover” deadline, and bills passed out from now on go to the Rules Committee of the second chamber, a procedural hurdle impeding their chances of final passage.

Counties oppose the one-size-fits-all approach of HB 871 / SB 652, which limits local decision-making. The move to collective bargaining outlined in this bill could create potentially unsustainable costs for counties, who provide substantial funding for community colleges throughout Maryland – especially since the legislation does not envision any added State support.

From the MACo testimony,

Despite counties’ role in supporting community colleges, this legislation would not provide any opportunity for county governments to participate in collective bargaining negotiations. The combination of these effects – State-imposed system and costs, no county participation in bargaining, and no additional State funding – is simply not affordable as a statewide county mandate and could present substantial budget difficulties.

MACo opposed identical legislation in past sessions of the General Assembly. Click here for previous Conduit Street coverage.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

MACo Supports Grant Funding to Offset Declining Enrollment

MACo Policy Associate, Kevin Kinnally testified in support of Senate Bill 1024, “Education – Grant for Declining Education Aid,” to the Senate Budget & Taxation Committee on March 15, 2017.

SB 1024 would help to offset the sudden drop-off in education funding to jurisdictions with declining enrollment, ensuring school systems can offer equivalent courses and programs, even with fewer students.

Five Jurisdictions–Baltimore City, Calvert County, Carroll County, Garrett County, and Talbot County–are slated to lose a combined $45M in state education funding in 2018. Baltimore City is the most deeply affected, with a $38m loss in year-to-year total state education funds.

MACo’s testimony states,

Counties value public education as a high priority, and an essential service and benefit to the citizens and the economy. State Budgeting formulas and requirements complicate this commitment, especially because nearly all state education funding is distributed on a per-pupil basis, meaning that the more students a school system serves, the more funding it receives.

By contrast, when the number of students declines, schools can experience a sudden drop in funding. This dynamic can strain local budgets – reflecting the reality that not every dollar spent in a school system is truly a “variable cost.” A sudden drop in students across a county school system may mean some cost savings in bus transportation and meals service – but may not have any effect on “fixed costs,” which account for most system-wide expenditures on education and administration.

To learn more about Maryland’s school budgeting formula, read “Why do Five Jurisdictions Lose $45M in Education Funds?” on MACo’s Conduit Street Blog. The cross-file, HB 684, was heard in the House Appropriations Committee on February 21, 2017. Click here for previous Conduit Street coverage.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

Both Chambers Pass Bill to Close Gap in Teachers Pensions

A bill which addresses the shortfall in funding required to meet the portion of Maryland state teacher pension costs that exceed costs anticipated during the 2012 “pension shift” is on the move in the General Assembly. House Bill 1109 / Senate Bill 1001, “Teachers’ Retirement and Pension Systems – County Boards of Education Payments,” passed second reader in both the House and Senate, with amendments.

The actual normal costs of teacher pensions in fiscal year 2017 are approximately $19.7 million more than the amount that local school boards were estimated to provide in legislation passed by the General Assembly in 2012.

The additional funding required in fiscal year 2017 is mainly attributable to changes outside of the control of local school boards. At the same time, absorbing this additional cost in fiscal year 2017 could put pressure on school board budgets, and county governments who provide much of their funding.

The amendments allow the state to pay the difference in either FY 2018 or FY 2019.

MACo joined the Maryland Association of Boards of Education in supporting the bill.

Useful Links

MACo testimony on HB 1109 / SB 1001

For more on 2017 MACo legislation, visit the Legislative Database

Hogan Criticizes Baltimore City Schools, Hints at Financial Control Board

Governor Larry Hogan criticized the Baltimore school system for its money management Thursday and suggested that additional financial oversight might be part of any deal to send more state aid to the city.

According to The Baltimore Sun,

Speaking with a hoarse voice at a wide-ranging news conference in Annapolis, Hogan said he recently had a “good meeting” with Mayor Catherine Pugh and expected to sit down with her again to discuss the school system’s $130 million budget shortfall.

However, the governor expressed dissatisfaction with the Baltimore school board — which he helps appoint — saying it kept “spending as if they thought they were going to get more money.”

In response to a question, Hogan said creating a financial control board could be on the table.

“It will be part of the conversation,” Hogan said. “So far we have had very preliminary discussions.”

While the governor did not elaborate, a financial control board is generally understood to be a panel that oversees a government authority, such as a school board, and has veto power over its financial decisions.

Congress imposed such a board on the troubled District of Columbia government in 1995 as part of the price for a financial bailout. The board kept watch over the District’s finances for six years. Two decades earlier, a similar board was created as part of a rescue plan for New York City.

Baltimore officials have pressed the Republican governor and members of the General Assembly to help close the schools’ budget gap, which officials say could lead to more than 1,000 layoffs and larger class sizes.

Hogan expressed a willingness to work with the city but gave no indication that a resolution was near. “It’s certainly not going to be a blank checkbook,” he said.

The governor’s comments came as Pugh and Baltimore schools CEO Sonja Santelises prepared to meet with city legislators in Annapolis on Friday morning. Del. Curt Anderson, a Democrat who chairs the city House delegation, said the officials are expected to lay out their plan to solve the school system’s shortfall and explain what they hope the state will do to help.

Pugh wouldn’t reveal details of what she plans to discuss, but said it would concern funding for city schools.

“We will provide assistance to the school system,” the Democratic mayor said.

She said the governor’s comments likely stem from their shared belief that there needs to be strict “fiduciary responsibility” of school system spending. The mayor said she believes the system needs to re-examine its structural costs, including funding for a large network of public charter schools.

During a school board meeting last week, Santelises — who has headed the school system since July 1 —dismissed any suggestion the district has mismanaged its money.

“Regardless of whatever narratives the community hears, this is not an issue of mismanagement. This is not an issue of lost money,” she said.

Anderson said the system’s financial woes were the result of events beyond its control. He rejected the notion of a control board.

“I don’t think we’re interested in reimposing any state controls over a local jurisdiction,” he said.

Useful Links

Previous Coverage on Conduit StreetBaltimore City Schools CEO Warns of Massive Layoffs

Article from The Baltimore Sun

MACo Opposes Statewide Community College Collective Bargaining, Could Cause Unsustainable Costs for Counties

MACo Policy Associate, Kevin Kinnally testified to the Senate Finance Committee on March 9, 2017, in opposition to Senate Bill 652 “Education – Community Colleges – Collective Bargaining”.

Counties oppose the one-size-fits-all approach of SB 652, which limits local decision-making.

The move to collective bargaining outlined in this bill could create potentially unsustainable costs for counties, who provide substantial funding for community colleges throughout Maryland – especially since the legislation does not envision any added State support.

From MACo’s testimony,

Despite counties’ role in supporting community colleges, this legislation would not provide any opportunity for county governments to participate in collective bargaining negotiations. The combination of these effects – State-imposed system and costs, no county participation in bargaining, and no additional State funding – is simply not affordable as a statewide county mandate and could present substantial budget difficulties.

MACo opposed identical legislation in past sessions of the General Assembly. The cross-file to the bill, HB 871, was heard by the House Appropriations Committee on February 21, 2017. Click here for previous Conduit Street coverage.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.

MACo Encourages State Support for Teacher Pension Cost Overages

MACo Policy Associate, Kevin Kinnally, testified in support of legislation (HB 1109 and SB 1001)which addresses the shortfall in funding required to meet the portion of Maryland state teacher pension costs that exceed costs anticipated during the 2012 “pension shift”.

MACo’s testimony states,

The actual normal costs of teacher pensions in fiscal year 2017 are approximately $19.7 million more than the amount that local school boards were estimated to provide in legislation passed by the General Assembly in 2012.

The additional funding required in fiscal year 2017 is mainly attributable to changes outside of the control of local school boards. At the same time, absorbing this additional cost in fiscal year 2017 could put pressure on school board budgets, and county governments who provide much of their funding. The General Assembly’s effort to provide this funding during the 2016 Session did not resolve the shortfall, thus the need for HB 1109.

The BRFA of 2012 shifted the employer “normal costs” of teacher pensions from the State to county governments. Phased-in over four years, the total final amount that counties now pay toward teacher pensions is $216,530,425. Beginning in fiscal year 2017, this funding has been embedded into county education maintenance of effort appropriations, and as such may never be reduced.

HB 1109 was heard by the House Appropriations Committee on March 7, 2017. SB 1001 was heard by the Senate Budget and Taxation Committee on March 9, 2017.

Follow MACo’s advocacy efforts during the 2017 Legislative Session here.

MACo Encourages New Workforce-Focused Community College Programs

MACo Associate Director, Natasha Mehu, submitted written testimony in favor of legislation (HB 848) which incentivizes the creation of community college programs that help prepare Maryland students for the workforce and help develop a well-qualified pool of potential employees for local businesses.

MACo’s testimony states,

HB 848 authorizes counties in partnership with their community colleges to establish Community College Vocational Certificate and Apprenticeship Training Programs. The programs are accompanied by an Associate Degree Tuition Assistance Program. Through these programs, eligible students receive on-the-job training, classroom study, financial assistance, and support services that put them in the best position for employment once their studies are successfully completed. Businesses across the state benefit from students entering the workforce with the specific skills, training, and certifications necessary for employment in their trade or profession.

Counties are invested in having strong and vibrant economies. A robust, well-trained, and educated workforce encourages businesses to locate to and grow in Maryland. This bill helps build relationships between local businesses and community colleges. It properly leaves the decision for establishing a program in the hands of the local government and community college who are best situated to determine whether a program is in their best interest. If a program is established, it requires both the county and the State to split the reimbursement of tuition assistance, disbursing financial burdens and ensuring that the State is equally invested in the advancement of its students and workforce.

This bill was heard by the House Ways and Means Committee.  The cross-file to the bill, SB 678, was heard by the Education, Health, and Environmental Affairs and Budget and Taxation Committees on March 1. Click here for previous Conduit Street coverage.

Follow MACo’s advocacy efforts during the 2017 legislative session here.

MACo Fears State Fiscal Implications for Workforce Development Grants

MACo Policy Associate, Kevin Kinnally, provided written testimony to amend legislation of HB 868, “Higher Education – Community Colleges – Workforce Development Sequence Grants and Scholarships” on March 7. The bill would establish workforce development grants and scholarships for community college students, however doesn’t include how the funding of the grants and scholarships would be mandated.

MACo’s testimony states,

This bill encourages community college training opportunities that promote workforce development, minimize the shortage of skilled workers, and raise economic opportunities in Maryland. Not only are community colleges an accessible and affordable choice for many Marylanders, they also work directly with employers to provide training for incumbent workers, and are flexible and adaptable to the needs of their local labor markets.

While MACo supports the premise of this bill, counties are cognizant of the fiscal challenges at the state level, which could make a concrete spending mandate untenable.

The cross-file to the bill, SB 869, was be heard by the Senate Education, Health, and Environmental Affairs Committee on March 1, 2017. Click here for previous Conduit Street coverage.

Follow MACo’s advocacy efforts during the 2017 legislative session here.