Health care, construction, tech among biggest school expenses

Health care, construction, tech among biggest school expenses

With employee health care costs leading the way, Maryland’s public school districts spent $21.1 billion between fiscal years 2019 and 2022 not on teacher and staff salaries, but on everything else that keeps the schools running.

With employee health care costs leading the way, Maryland’s public school districts spent $21.1 billion between fiscal years 2019 and 2022 not on teacher and staff salaries, but on everything else that keeps the schools running.

That’s the bottom line if you add up all 26,000-plus vendor payments of $25,000 or more made by Maryland’s school districts between the 2018-2019 and 2021-2022 school years.

Those vendor payments are included in “Contracted Out,” a deep dive into school contract spending assembled by the Local News Network at the University of Maryland’s Philip Merrill College of Journalism.

“Contracted Out” comes in the wake of an unprecedented influx of federal funding into Maryland’s school districts. The federal government has sent more than $3.2 billion in COVID-19 pandemic relief funds to Maryland schools since 2020, with few strings attached. Much of that money will be reflected in the school spending data.

“The last couple of years are super interesting because districts got this massive windfall of cash,” said Marguerite Roza, director of Georgetown University’s Edunomics Lab, a research institute that studies education funding data.

But the data — compiled largely from the state’s Open Data Portal — offers only limited insights into overall spending patterns.

That’s because only a small number of Maryland school districts published vendor data until the General Assembly required them to do so starting in 2019, meaning there’s no way to compare spending from before the pandemic with spending in recent years.

On top of that, under state law, 23 of the state’s 24 school districts don’t have to publicly report the reasons for their vendor payments.

Even so, the “Contracted Out” data shows all of the following to be major expenses for Maryland school districts between the 2018-2019 and 2021-2022 school years::

Health care

CareFirst BlueCross BlueShield, which provides health insurance to many Maryland school employees, by far ranks as the biggest vendor for the state’s school districts. The data shows that CareFirst pulled in $3.3 billion from Maryland’s school districts between fiscal years 2019 and 2022.

No other vendor comes close, but several other health care providers or insurers — including Express Scripts, Aetna, CVS Caremark, Cigna and SilverScript — each did more than $200 million in business with Maryland public schools over four years.

However, some significant health care spending doesn’t immediately stand out in the data. Allegany County Public Schools, for example, paid $79.7 million to Citibank over four years, but it was all for health care. The district simply uses a Citibank account to pay what it owes to Cigna, its health insurer, said Larry McKenzie, the district’s chief financial officer.

“It’s nothing really unusual, especially for a large employer,” McKenzie said. “We have a custodial account, basically, set up with Citibank that Cigna uses to pay our claims on our behalf.”

Some other districts pay for their employee health care through a shared account that shows up on the county budget rather than the school district budget, said Milton E. Nagel, executive director of the Maryland Association of Boards of Education.


Every school district in the state manages multiple buildings, and some larger districts find themselves serving increasingly large student populations. That being the case, five construction contractors did more than $150 million of business with Maryland school districts between the 2018-2019 and 2021-2022 fiscal years. They are Keller Brothers, HESS Construction & Engineering Services, Oak Contracting, Dustin Construction and Whiting-Turner Contracting.

Montgomery County Public Schools had among the most robust construction programs, with Keller Brothers and Dustin ranking as its top contractors. Jessica M. Baxter, a spokeswoman for the district, listed two dozen construction or renovation projects managed by those two companies in Montgomery County, the state’s largest school district, with more than 160,000 students.

Prince George’s County Public Schools spent more than $150 million on construction, yet still ended up spending the most in the state — $13.8 million — on temporary classrooms from a company called Modular Genius.

“This speaks to school overcrowding, displacement due to school construction, enrollment increases/overutilization rates,” said Meghan Gebreselassie, the district’s director of communications.


The COVID-19 pandemic led to a big boost in spending on technology at many school districts in the state — and to a lot of business for tech companies.

Ten IT service and equipment companies did at least $35 million in business with Maryland school districts over four years, with CDW Government Inc., a tech services provider to every school district in the state, leading the way with $331.9 million.

Among manufacturers, Hewlett Packard ranked as the top vendor, receiving $147 million from Maryland school districts over four years. All of that business came from Baltimore County Public Schools.

“BCPS was among the first and largest school systems in the state to commit to and implement a program through which every student had access to a personal PC,” said Charles Herndon, a spokesman for Baltimore County Public Schools. “Also included in the amount was other educational technical hardware, networking systems and PC leasing, among other expenses.”

Other tech companies benefited, too. Prince George’s County Public Schools spent $61.3 million on Dell products and $15.6 million on Apple.

Thanks to the pandemic, “we had to purchase over 150,000 Dell Chromebooks in order to meet the needs of students,” said Gebreselassie. In addition, she said “PGCPS utilizes iPads for early childhood education and purchased over 19,000 of them to support students during distance learning.”

Basic operations

About 890,000 students attend public schools in Maryland, and it costs billions to transport them, feed them and give them the materials they need in order to learn. So here’s a quick look at what the vendor records show about those expenses:

  • Districts take different approaches to transporting students. Half the districts in the state did business with American Truck & Bus Inc., a bus dealer that ended up getting $79.4 million in business from the schools. But other districts, such as Carroll County Public Schools, rely on private bus operators — and two of them, Lawrence M. Schaffer and Mark C. Garcia, got $2.6 million and $1.9 million, respectively, from that school district.
  • Four food suppliers — Dori Foods, US Foods, Eastern Food Services and Cloverland Dairy — rank among the largest 100 school vendors in the state. But there are dozens of others, as districts tend to rely on small local produce and dairy providers as well as big national food distributors.
  • Amazon ranked as one of the state’s leading office suppliers, with $14.2 million in business over three years. That’s half of what the districts gave to Office Depot, but rural districts tended more often to buy from Amazon. Garrett County, for example, spent $1.4 million on Amazon over four years. “Garrett County is a rural county with limited options for purchasing locally,” said Mark Greene, the district’s manager of communications and public relations.

Charter schools

Maryland’s public school districts didn’t spend nearly as much money on charter schools as they did on basic operations. But they did spend at least $228.9 million on them over four years.

That figure comes from cross-referencing the vendor data submitted by Maryland’s school districts with the list of charter schools published on the State Department of Education website.

Charter schools are publicly funded institutions that operate independently from many state regulations, but are held to certain educational standards set out in their founding document, or charter. They do not charge tuition and are mandated to be secular, and they aim to give parents a choice of where their children should go to school.

In total, around 3% of the state’s student population attends one of Maryland’s 48 recognized charter schools, according to the State Department of Education. But in Baltimore City, they make up a much larger portion of the educational landscape. Baltimore City contains 31 charter schools, serving nearly one-fifth of the district’s student population.

The district “has been open to innovative ways to meet the diverse needs of students even before charter law was established in the state of Maryland,” said Sherry Christian, the Baltimore City Public Schools media and public relations manager.

Local News Network Director Jerry Zremski compiled this story based on reporting from CNS reporters Sarah Meklir, Matthew Landsman and Joey Barke.

About The Author

Capital News Service

Capital News Service is a student-powered news organization run by the University of Maryland Philip Merrill College of Journalism. With bureaus in Annapolis and Washington run by professional journalists with decades of experience, they deliver news in multiple formats via partner news organizations and a destination Website.

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