Gov. Larry Hogan’s re-election campaign is on the air with a multi-million-dollar ad buy hammering home the message that he’s committed to public education. All three of the commercials feature the claim that he’s spent a record amount on pre-K-12 education, about $25 billion during his four years in office, and that’s absolutely true. To be precise, Maryland has spent $25,407,073,000 on public schools, which represents record spending in each of his four years in office.
That’s impressive. What would be more impressive is finding a Maryland governor who couldn’t claim to have spent a record amount on education in each of his years in office. We were able to document year-over-year increases annually since at least fiscal 1996, which is not surprising given that state spending on schools is driven in large part by enrollment, which has consistently trended upward.
State spending on education has gone up every year in recent memory. The first year on this chart, fiscal 2003, was the final year of Gov. Parris N. Glendening’s administration. The next four years (in red) are Gov. Robert L. Ehrlich Jr.’s term. The subsequent eight (in blue) are the two terms of Gov. Martin O’Malley, and the last four (in red) are Gov. Larry Hogan’s term.
The big change that occurred during that time was the adoption in 2002 of new education spending formulas as a consequence of a commission’s recommendations on what the state needed to do to meet its constitutional mandate to provide an adequate public education. The so-called Thornton formulas were phased in over a number of years, starting during former Gov. Robert L. Ehrlich Jr.’s term. That led to eye-popping, year-over-year percentage increases in how much Maryland spent on its public schools, and if that’s your metric for which governor gets the prize for record education spending, Mr. Ehrlich is the clear winner. Spending on schools went up a cumulative 44 percent during his term. Gov. Martin O’Malley caught the end of the Thornton phase-in during his first year in office, and consequently he can boast of the largest single-year increase in education spending (15 percent in fiscal 2008) and a cumulative 28 percent increase during his first term. Mr. Hogan’s four-year record is pedestrian by comparison (7.8 percent) though better than Mr. O’Malley’s second term (6.3 percent).
The large spike in education spending during the middle years of the last decade represents the phase-in of the Thornton education funding formulas during Governor Ehrlich’s term and the first year of Governor O’Malley’s. Since then, increases in spending on schools have been more in line with overall increases in state spending.
There are many ways to use the numbers to look at each governor’s commitment to schools, but one more bears particular note: How large a share of the state’s available funds did the governor commit to education in any particular year? If each governor’s spending on schools is largely driven by formulas, one way to determine how high a premium each puts on education is by considering how much they had to sacrifice to meet the funding targets.
When the General Assembly passed the Thornton plan, it did so without identifying a new revenue source to pay for it, a decision that would bedevil future governors for years. Mr. Ehrlich came into office as the state was feeling the effects of a recession, but the Thornton phase-in at that point was comparatively modest, and the economy quickly turned around thanks to the real estate bubble. By the end of his term, the state government had loads of cash on hand — but also projections showing big deficits on the horizon if nothing was done.
During his first year in office, Mr. O’Malley proposed a massive fiscal package including a variety of tax increases and a constitutional amendment that would legalize slot machine gambling. For a brief, shining moment, it appeared that the state would have the money it needed to match its commitment to schools (and health care, and the environment and everything else). But then the real estate bubble burst, the financial industry went into a meltdown, and state revenues tanked during the great recession. Mr. O’Malley got some help paying for the state’s schools from federal stimulus funds in fiscal 2010 and 2011, but even factoring that out, he still found himself dedicating more than 40 percent of available funds to Maryland’s public schools for four straight years.
Things got better during the latter years of Mr. O’Malley’s second term, and they’ve gotten better still during Mr. Hogan’s. The current governor has benefited not only from a strong economy but also from the maturation of Maryland’s casino industry, which now frees up a half-billion dollars a year for other priorities.
State spending on schools as a percentage of available funds hit a high mark under Governor O’Malley in fiscal 2011. Even factoring out the nearly $300 million Maryland got in federal stimulus funds to avoid cuts to schools, Mr. O’Malley still had to dedicate almost 43 percent of state tax receipts to education. That’s about eight percentage points higher than any point during Governor Ehrlich’s term.
Maryland’s state government, more so than in most other states, also contributes heavily to local school construction projects — in fact, the question of whether it has done so enough, particularly for Baltimore, has been much in the news recently amid squabbling between the governor and local leaders about the lack of air conditioning in many city schools. Whether the state (under the Hogan administration or any other) has sufficiently prioritized school construction in Baltimore and other poor jurisdictions is a fair question. But as for which governor holds the record for most school construction spending overall, Mr. Hogan again comes out on top, beating the mark set during Mr. O’Malley’s second term by about $100 million. That’s more significant that his record operating spending, in some ways, because there’s much more variance in how much the state spends in any given year. Before Mr. Hogan authorized a record $427 million this year, the previous high mark of $388 million was back in 2008.
Mr. Hogan spent more on school construction in his term (red section on the right) than Mr. O’Malley in either of his terms (blue) or Mr. Ehrlich (red section on the left).
Mr. Hogan also sets the mark when it comes to the amount of school construction spending as a percentage of available funds (mainly general obligation bond proceeds but also some other funds). He hasn’t topped the 44 percent of available capital dollars Mr. O’Malley used in fiscal 2008, but his four-year average of 31 percent is the best of any gubernatorial term dating back to Mr. Ehrlich.
Mr. O’Malley holds the record for the largest percentage of available capital funds spent on school construction in any given year, but Mr. Hogan’s four-year average narrowly beats him out.
There’s one other important consideration when it comes to education spending, which is that Maryland is nearing the end of a review of the Thornton formulas, and a new commission, led by former University System of Maryland Chancellor William E. “Brit” Kirwan, is recommending changes that could add billions a year to the amount Maryland spends annually on schools. What does Mr. Hogan’s record suggest about how aggressively he would work to meet new Kirwan targets?
Mr. Hogan has gotten into some high-profile fights with the Democrats about education spending at various points in his term. During his first year, for example, he funded a then-optional component of the Thornton formulas called the Geographic Cost of Education Index at 50 percent. Democratic legislators cut other spending in the budget and fenced it off for use to fully fund GCEI, but Governor Hogan refused. (The legislature made GCEI mandatory after that, and Mr. Hogan has complied.) He has also faced pressure at other times to spend more money to help Baltimore City schools through a budget crisis related in large part to enrollment declines, which he eventually did. And last winter, he fought over how much to spend to help fix faulty heat in city schools.
At the end of the day, though, he has exhibited more fidelity to the Thornton formulas than either of his immediate predecessors. Governor Ehrlich never funded GCEI, and Governor O’Malley did in some years and not others. Mr. O’Malley also shifted some teacher pension costs to the counties (a good policy in our book) and limited the automatic inflationary increases in the Thornton formulas while the state recovered from the recession. Mr. Hogan proposed limiting inflation growth in his first budget, but the legislature rejected the idea, and he hasn’t tried again.
It’s hard to imagine that Mr. Hogan would propose a new tax increase to pay for Kirwan, and given how much it might cost, it’s doubtful that we could get to full implementation without one. Still, Mr. Hogan has taken some steps to prepare for it. He worked with Democrats to reserve for education a portion of the anticipated income tax windfall the state will get as an unintended consequence of the Trump tax cuts. He has joined Democrats in calling for a “lockbox” for casino funds that would have the effect of gradually ramping up the general funds used for education during the next few years, and he has said he would set aside new sales tax collections from online sales that will be available as a result of a Supreme Court decision to help pay for Kirwan.