Another week of legislative committee brought fewer bills to consider, as just about everything has already been introduced. We are winding down taking positions on various pieces of legislation. But this week brought a biggie! The Kirwan “Blueprint” Bill – SB1030/HB1413.
By now you have probably already heard of the “Kirwan Commission” (Commission on Innovation and Excellence in Maryland) and the 2+ year study on completely overhauling education in the State of Maryland. There were 25 members appointed to the commission and five main areas were studied in separate workgroups:
Early childhood education (Universal Pre-K), High-quality teachers and leaders (Raising teacher pay), College and career readiness pathways (CTE), More resources for at-risk students and Governance/Accountability.
While there has been much debate on the policies and what this may or may not do for the outcomes on the education of our children, what we do need to recognize and also discuss is the cost of implementing these policies. The price tag is estimated to be nearly $4 billion dollars over 10 years, but most of it coming in the first 3 years.
As I mentioned in my first report last month, “we are talking about massive tax increases, whether on the state side or mandating it on the county side.” There is currently no revenue source to pay for all of these initiatives, either at the State or Local level. Originally, when formed, the commission was supposed to look at the funding formulas and what was never addressed during the two-year study, was the “split” between the counties and the state.
Each county has a different “wealth formula” for how much state aid goes to education. The formula basically puts 2/3 of the weight on a county’s assessable property base and 1/3 on the household income. In Talbot county’s case, we lose out on state money and pay 75% of the total Board of Education budget. We have a skewed assessable base, because of some high value property. Meanwhile, our average household income is 20% below the state average. I have been trying to get that message out, especially to the state, that it unfairly penalizes Talbot (and some other counties with similar circumstances) because our people who are actually out earning an income, have less of an ability to pay. Many of our people, with a higher property value, either live elsewhere more than 6 months and a day, or are retired and don’t pay income tax. We also have a homestead tax credit that keeps our property tax revenues low, based on the original selling price of your home and not it’s current value, which is the number the state uses in the formula. Not to mention our revenue cap which severely hampers our county.
This week, a “Kirwan” bill was introduced and there wasn’t even supposed to be one this year, other than about $3 million in funding towards Pre-K. This one has a price tag of about $1 billion over the next two years. The hearing was scheduled with only 2 days notice. MACo had to analyze the 29-page bill in a day and bring a recommendation to the legislative committee. It was a tricky position to be in and here’s why.
This bill does not “require” any county funds in order to be able to receive state money. It creates a grant of $23 million for areas with at-risk students and another grant of $137.5 million for students with disabilities. The third area is a grant of $75 million for teacher salary increases. This grant does not require a county to participate, but if they want to receive the funds, they must raise teacher salaries by at least 3% in our 2020 budget.
The other good thing is this bill, is that the counties will receive “credit” for anything we do above Maintenance of Effort (MOE). That was a big concern and many counties were apprehensive about funding above MOE this year, wondering whether new Kirwan funding would be on top of a new base. So, we can in essence, make a “down payment” this year and not be penalized next year.
On this bill, MACo did come out with a position of support because there is no requirement from the county. I joined the MACo panel in delivering testimony to the joint Senate committees of Budget & Tax and Education, Health & Environment and stated:
My county has been willing to invest in education. Over the last several years, we have increased our property tax rates by 30%, all of it for education. We exceeded our citizen-imposed tax cap to do so and that was not an easy decision. We also put a ballot initiative, which I wrote, in front of our voters this past election to raise our revenue cap to help with increased funding for all of county government.
The Commission, and the legislature, already has more work to do – the formulas that distribute state funding really need a reality check. We have counties where the tax base does not reflect people’s ability to pay taxes today. We know that’s still on the “to do” list… that’s an important part of the path ahead. Several counties have an average household income far below the state average, yet they are considered wealthy because of a skewed assessable base.”
The reality is, this is the “carrot” before the “stick.” We know the massiveness of what is to come next year. Counties have huge concerns about the price tag and how much will be “mandated” to be the county share, with no alternative but immense tax increases to pay for it. MACo has been saying for two years that the “formula” needs to be sorted out before we can take a position on the main bill that will come next year. This is a different bill and it is all state funded. However, we know that will change next year and we need to stay actively engaged.
Laura Price is on the Executive Board of Directors of MACo, the legislative liaison and member of the Talbot County Council.