The Kirwan Blueprint bill is currently moving way too fast through the House before it moves next week to the Senate. After the “public-hearing” on February 17, 65 amendments were offered. Most never saw the light of day as certain committee members made decisions on which amendments were worthy of consideration. The vast majority were related to one of the five specific policy areas and some were related to funding. I will address the local funding requirement amendments.
If legislators believe that this is a good idea, and they are the ones voting on the plan, they should not pass another unfunded mandate onto the county governments. Additionally, the state has more flexibility in raising revenues and/or making adjustments within the state budget to pay for this new level of education costs. Counties only have property and income taxes and most are maxed out at 3.2% on income taxes, leaving only property tax, thereby forcing the local elected officials to raise rates significantly with no local control.
Obviously, the state still expects the counties to pick up a significant share. While most have heard that the split was $2.8 billion state and $1.2 billion counties, that is misleading. FY20 funding for all counties is $6.69 billion (51.8%) and state share is $6.23 billion (48.2%), so the locals are already funding $464 million more than the state. The bill as introduced (with an inflation factor of 23%) counties would be funding a total of over $9.2 billion in FY30. That is an actual increase in local spending of $2.5 billion, which is inclusive of MOE. It is also why the numbers that keep getting reported of $1.2 billion appear distorted and understated.
The funding amendments that were offered were to accomplish two things. First, the massive local increase on Baltimore City and Prince George’s County has been widely reported and something in the formula had to change in order to offer those jurisdictions relief. As originally drafted, the “Local Share Relief” to 12 counties was $431 million with $375 going to just those two jurisdictions.
The second was a technical fix to the Funding Floors for seven counties. Notwithstanding the wealth formula, each county receives 15% funding on the base per pupil and 40% funding on a Special Education, English Language Learner or Concentration of Poverty. When the bill was initially introduced, this had not been factored in and the local share was overstated. An amendment was needed to adjust the calculation because it had been double-counted and ended up with the local + state being greater than the total formula funding required. This amendment was NOT the State granting relief to those seven counties, it was to correct a mathematical ERROR.
The first amendment was to grant relief to 12 counties and the second was to fix the error. Unfortunately, these got combined and the title of the amendment is “Net Local Share Relief.” Why does this concern me and several other counties who are supposedly wealthy? Because legislators will say that they “fixed” us and granted us a reduction. That really is inaccurate. Our reasoning and that of several legislators is that the “wealth formula” does not accurately reflect the actual demographics and economy of a jurisdiction. One major factor that is not considered in any way is the Median Household Income. The tables below show examples of the education wealth formula versus the median income ranking as compared to the state average of $81,868.
|Wealth Rank||County||Median Household Income||Percent Above/Below||Median Income Rank|
This illustrates that no funding formula really works. There are many other factors that comprise a county’s “wealth,” not just property value + net taxable income divided by the number of children in the school system. Until you account for many different factors, it would be unfair to classify a county wealthy, poor or somewhere in between. The true wealth of a county has very little to do with how many kids we educate and everything to do with the quality of jobs, incomes, and demographics of who we serve. What we really need is to amend this wealth formula that fits no one and add a factor that accounts for median household income.
Laura Price is on the board of directors of MACo, Chair of Budget and Tax, Talbot’s legislative liaison and member of the Talbot County Council.