U. S. Stimulus Will Sustain Md. Schools About $1.1 billion over 2 years would offset State budget cuts

The Baltimore Sun

Maryland schools are expected to get about $1.1 billion over the next two years from the federal stimulus package that President Barack Obama is scheduled to sign today, an amount that is expected to offset any state reductions in education aid needed to balance the budget.

Most of the money - about $721 million - is intended to prevent cuts to school programs, giving the state significant flexibility in how it is used.

Education advocates had worried that the aid would be earmarked in ways that would have prevented Maryland from using it to reverse planned budget cuts.

In addition, about $208 million will go to special education, $179 million is designated for schools with a high percentage of poor children and $8.3 million is for education technology.

The details of the stimulus package come at a crucial time in Annapolis, as lawmakers begin poring over a budget designed to close a revenue gap of as much as $2 billion next year.

Gov. Martin O'Malley's proposal included $69 million in cuts to K-12 education, a sharp reversal after years of strong budget growth prompted by the 2002 adoption of the school funding formula known as the Thornton plan.

O'Malley said yesterday that the state could get as much as $3.8 billion from the federal stimulus package in total and that any budget cuts for school districts in his spending plan for the next fiscal year would be offset by the federal money.

"Whatever clips were received by school districts in this budget is going to be greatly offset and then some by what President Obama is going to do for us over these next 27 months," O'Malley said.

Although money for school construction was cut from the final version of the federal legislation, the state will apparently be able to use a portion of the money for school renovations and modernization.

Warren Deschenaux, the legislature's chief fiscal analyst, said the funds appear sufficient to prevent significant cuts this year, but he warned that the state could see a further decline in state revenues.

Furthermore, he said, it's not clear how much money would be doled out in each of the two fiscal years, and with the legislature required to pass a budget by April, timing of the aid could be an issue.

O'Malley's proposed $69 million reduction in direct aid to school classrooms in the budget year that begins July 1 particularly upset officials in Baltimore City and Prince George's County, which stood to lose $23 million and $31 million, respectively.

Overall state spending on education was roughly flat in O'Malley's proposal, though, because he increased funding for teacher pensions by about $68 million. Still, that was little consolation to school districts scrambling to make up for the cuts to their operating budgets.

"The federal money is going to save people's jobs. It is going to allow us to maintain the level of service we have been able to achieve by virtue of the Thornton funding, and it gives us a little breathing room in terms of what will happen on the state front," said John Woolums, director of governmental relations for the Maryland Association of Boards of Education.

Woolums said many education advocates still have deep concerns about making sure that the state does not back down from its previous level of funding once the federal money disappears in two years.

And, he said, local districts would be opposed to any attempts by the state to use the federal stimulus money to pay into the teacher pension system. For years the state has borne the cost of annual payments to the pension system, but more recently it has begun subtracting that cost from what it gives to local school systems for their operating budgets.

In the past five years, Maryland has increased its spending on K-12 schools by about $2 billion a year - $2,438 more per pupil - and has seen the result of that investment, Woolums said. Maryland schools were ranked first in the nation in two recent reports, including one that looked at the number of graduates who passed rigorous Advanced Placement tests.

Baltimore also has made steady progress in improving its schools since the Thornton plan was approved. What was frustrating for local systems was that this progress might be lost during hard times.

"This is a fantastic opportunity for us to sustain what we know works," Woolums said.

State education officials had worried that much of the federal money would be targeted toward Title 1 and special education and would not be available for general operating programs. Title 1 funds are strictly for schools with a high proportion of low-income students and can be used only to augment local funding, not replace it.

But with the majority of the money designated for fiscal stabilization, there should be enough flexibility to fill in the gaps in state dollars, said William Reinhard, a spokesman for the Maryland Department of Education.

"I think the flexibility that would be allowed in the fiscal stabilization money would be of great interest to Maryland schools," he said.

Baltimore Sun reporter Laura Smitherman and the Associated Press contributed to this article.

aid breakdown

Maryland's share of federal stimulus bill education aid over two years:

* $721.2 million for fiscal stabilization, to offset proposed budget cuts

* $208 milllion for special education

* $179.1 million for Title 1, which supplements spending in schools that have a large share of poor students

* $8.3 million for education technology.

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