The next few months are make-or-break time for the ambitious education reform proposals championed by Maryland’s Kirwan Commission. Last week, the House speaker and Senate president named a study group to figure out how to divide the costs between the state and counties. They’ll do it under a shadow of uncertainty cast by Gov. Larry Hogan’s skepticism about the whole enterprise. In allowing legislation funding the first two years of Kirwan implementation to go into law without his signature, Mr. Hogan railed against the costs of the full proposal, predicting ruinous tax increases if it is ever fully phased in. He went further in a speech last week to the Maryland Free Enterprise Foundation, vowing, “Not a single one of those things is ever going to happen as long as I’m your governor.”
What now? Here are a few things to keep in mind as this debate plays out over the next year.
The new Kirwan work group is finishing up the last major piece of its work, which is to devise new funding formulas for Maryland’s schools. Its purpose is to help equalize opportunity among Maryland’s communities while supporting the commission’s policy goals, like increasing standards in the teaching profession, improving early childhood learning and reorienting high school to better prepare graduates for college or a career.
That involves some real policy complexity based on the different needs, resources and structures of Maryland’s 24 school systems, but the reason it hasn’t happened yet is mainly political. We know that the costs for Kirwan will be split between the state and the counties, probably more or less 50-50, but because of the wide disparities in wealth among the jurisdictions, the state will pick up more of the tab in some counties and less in others. Considering that one of those counties that will likely be asked to pay more is also Maryland’s largest — Montgomery — and the biggest source of the Democratic votes that will doubtless be crucial for passage in the General Assembly, that’s a fraught exercise. Everybody involved knows this and has all along, but the time has come to say it out loud — and deal with the consequences.
What the task force will not and should not do is devise a proposal for how the state should come up with the money. Governor Hogan keeps complaining that the commission hasn’t proposed a way to pay for its recommendations, but that’s not its place. Deciding on tax increases or spending cuts is a job for elected officials, like the governor, legislators, county executives and local council members.
The ultimate price tag for Kirwan sounds like a lot — a $3.8 billion increase in annual school spending. But keep this in mind: That’s $3.8 billion more, a decade from now, split between the state and counties. Currently, we spend about $15 billion in state and local funds on education in Maryland, so that amounts to about a 25 percent increase over 10 years. To put that in context, Maryland’s general fund budget has grown by about 40 percent during the last 10 years. Coming up with the money for Kirwan won’t be easy — local governments, in particular, are already scrounging for funds to support schools, with some (like Baltimore County) resorting to tax increases. But it’s not impossible.
Where the money could come from
Governor Hogan goes for some shock value in saying how much we’d have to increase the state income, sales or property tax to pay for Kirwan, and he’s right that none of those are appealing options. But there are others — sports betting, legalizing recreational marijuana, expanding the sales tax to cover more services and increasing the current cap of 3.2 percent on local piggyback income taxes — that are at least plausible. They don’t get you all the way to $3.8 billion, but they begin to make the spending trade-offs that would be necessary more plausible.
There is no debate on accountability
Mr. Hogan complained in his letter about this year’s Kirwan bill that the legislature hasn’t done enough to make sure the additional spending produces results. But legislators did agree to create the inspector general the governor wants to root out waste, fraud and abuse in school spending, and Kirwan has been premised on the need for a new level of accountability to ensure that school systems spend their funds on policies and initiatives that have shown the greatest success in boosting student achievement. There is simply no debate about that — just about how best to accomplish it.
Governor Hogan likes to boast about two things: spending record amounts on education and holding the line on tax increases. Mr. Hogan is right about the record funding and that he has sometimes spent even more than the current school funding formulas require (sometimes of his own accord, sometimes not). But every Maryland governor has been able to say that for at least the last 20 years, and meeting or slightly exceeding inadequate funding formulas isn’t much to brag about. Meanwhile, his record on taxes isn’t Grover Norquist pure — Mr. Hogan has gone along with the creation of a new tax on health insurance premiums to save Maryland’s Affordable Care Act exchanges, for example.
Democrats have super majorities in both chambers of the legislature, but history suggests that enacting major tax increases over a governor’s veto would be difficult if not impossible. When former Gov. Martin O’Malley introduced a major tax package in 2007 to pay for Maryland’s last round of education investments, it took nearly all of his political capital, and he barely prevailed.
When it comes to paying for Kirwan, Mr. Hogan holds the key, and that may present him with a political dilemma the likes of which he hasn’t seen. As early as next year’s General Assembly session, legislative leaders will likely push a new revenue package to begin funding Kirwan. And then Governor Hogan will have to start making some choices between education, the issue Maryland voters consistently say is among the most important to them, and taxes, the issue on which he was elected.