School fund plans emerge

The Baltimore Sun

Gov. Martin O'Malley is renewing his push to funnel tens of millions more in state dollars a year to schools in Baltimore City and suburban districts, a move aimed at helping counties with higher costs of living bear the price of providing a more expensive education.

O'Malley's education spending plan emerged yesterday at a meeting with education, business and community leaders in the 111-year-old Annapolis Elementary School, the latest of his carefully planned events over the past week and a half to discuss his plan for erasing a $1.7 billion budget deficit through, among other things, a sales tax increase, property tax cut and income tax restructuring.

Under the plan, 12 high-cost districts would share $38 million in the fiscal year that starts in July 2008, $76 million in the following year and $129 million by 2011. The biggest beneficiaries would be Baltimore City and the Washington suburbs. His plan requires the General Assembly's approval.

To afford the increase, the governor proposed freezing an inflation index built into the Thornton education plan, which would reduce funding to the state's 24 school systems by about $135 million. He also backed away from a previous proposal to partially shift teacher retirement costs to local districts. O'Malley said he is making good on a campaign promise by phasing in the "geographic cost of education index" over two years, a key piece of the Thornton plan that he had criticized his Republican predecessor for not funding.

"That would've been a $400 million hit for districts," O'Malley said of the option to force schools to pick up more of the teacher retirement tab. "I think in terms of the choices we had, we made the best decision we could, stretching out the [geographic cost index] moderately, but still not reducing the historic level of funding to public education made in this state."

In 2002, Maryland lawmakers implemented recommendations of a panel, chaired by Alvin Thornton, which sought to erase academic and educational spending inequities across the state. Lawmakers, however, did not specify how to pay for the plan, which increased state education spending by $1.3 billion (which has since become $1.5 billion after inflation) over five years.

That same year, the General Assembly sliced the income tax, reducing the state's revenue by about $1 billion, a choice that O'Malley says fueled the deficit that now looms.

"Anecdotally, we've heard of busloads of staff coming in from West Virginia to Baltimore County, teachers carpooling from Harford County to work in Anne Arundel simply because they can't afford to live in the counties in which they teach," said John R. Woolums, director of government relations for the Maryland Association of Boards of Education. "We know it costs those counties more to recruit and retain teachers and staff. The adjustment that some of these counties would receive would help alleviate some of those pressures."

According to the formula in the landmark Thornton legislation that recommended initiatives such as statewide full-day kindergarten, Montgomery and Prince George's counties and Baltimore City would receive the most, with Montgomery receiving as much as $12 million and Baltimore City receiving between $7 million and $9 million in the first year.

It's O'Malley's second shot at providing this cost adjustment. A measure stalled in the Maryland General Assembly during the past legislative session amid concerns over budget deficits.

In the spring, O'Malley's critics said he offered no way to pay for the cost-of-living adjustment. The governor's aides said he is now offering a corresponding cut in Thornton's inflation costs, which have bloated the General Assembly's original $1.3 billion commitment to Thornton in 2002 to $1.5 billion.

School officials seated in the first two rows said they were happy to hear of the news.

Queen Anne's County Superintendent Bernard Sadusky said he hoped to use the money to establish universal pre-K in his Eastern Shore school system.

In Anne Arundel County, Superintendent Kevin M. Maxwell said his district would likely get less than $2 million in aid, "not a budget-buster" in his $800 million budget, he said, but money he could use to boost teacher pay, he said.

Local school systems spent more than half the money from the state's Thornton aid program to increase teacher salaries an average of 8.5 percent over three years, according to an independent study that was commissioned by the state school board and released in February. The average teacher salary across the state increased by about $4,079 to $52,330.

Though the study found test scores rose in every county and the city over the three-year period, particularly in the elementary grades, fiscal conservatives on local school boards and at the state level have criticized schools for using the money to boost salaries. They say this is a move away from Thornton's intent to put in place programs that closed achievement gaps among minority and poor students and their peers.

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