A steep spike in state-mandated education funding will strain Baltimore’s budget for the coming year, limiting opportunities for new spending, the proposed budget unveiled by Mayor Brandon Scott on Thursday showed.
The $4.4 billion spending plan includes $392.6 million in required education spending, more than 11% of the city’s $3.5 billion in operating expenses. That figure represents $79.4 million more than Baltimore spent on education in fiscal year 2023, the first year since the implementation of the state Blueprint for Maryland’s Future plan, a 10-year effort to improve education by injecting billions of dollars into public schools, though local systems are responsible for providing some of the funding. The state’s Blueprint contribution to Baltimore City schools next year will be $1.1 billion, which includes an additional $30 million approved by the state last week.
Based on long-range fiscal analysis that accompanied the Blueprint legislation, Baltimore officials had been prepared for a more modest $12 million boost in spending in fiscal year 2024, which begins June 30. Instead, officials were informed around January that their contribution would be significantly higher due to changes in the baselines for state funding formulas.
In an interview with The Baltimore Sun, Scott called the required spending a “big challenge.” Baltimore is working with the governor and other officials in Annapolis to secure assistance in fiscal year 2024 and also lobby for changes to the spending formulas.
Until that can be been ironed out, however, Scott’s proposed spending plan, which still requires City Council approval, calls for scaling back on money budgeted for vacant positions — currently around 18% of the city’s budgeted staff — and reductions on expenditures in areas where the city has traditionally underspent. The largest portion of the additional Blueprint funding from the city will come from a one-time surplus in the previous year’s budget.
“Our goal was to have as minimal an impact of services as possible,” said Laura Larsen, the city’s budget director. “We were incredibly intentional.”
During a news conference Thursday, Scott called the Blueprint news a “gut punch.” The city will not be able to sustain the current level of spending required for long without a change in the formula, he said.
“When you’re talking about a much smaller increase, that allows us to be thinking in a much bigger way and more innovation, more investments into programs,” Scott said. “When you have to meet that big of a hole in such a small period of time, it just hampers your ability to do that.”
The spending plan holds the line on property taxes but includes an increase in the city’s water and storm water rates of 3%. Wastewater will increase by 3.5%. Those rate hikes, part of a three-year schedule, were approved by the city’s Board of Estimates in 2022.
Funding for city police is slated to remain almost flat under Scott’s proposed plan, the first year since he took office that he has not suggested at least a modest increase. The spending plan calls for five civilian positions to be created dedicated to serving victims of violent crime. The cost of the new jobs will be offset by the elimination of five vacant civilian positions in the department.
Scott campaigned on a pledge to reform funding for city police and led the charge in his time on the City Council to make cuts to police spending in favor of more holistic approaches.
Asked how the 2024 proposal dovetails with his campaign promises, Scott said Wednesday he remains committed to funding the police department in a “very responsible way.”
“It’s not just about how much money they have but how they’re going to be spending it,” he said, touting investments into the new civilian positions and the Group Violence Reduction Strategy, a pilot program that focuses resources on people most likely to be the victims of violence or perpetuate it.
Scott’s proposed budget also includes $500,000 for the addition of four new fire safety officers, an effort to fulfill a recommendation made by a damning investigative report issued in the wake of a deadly 2022 fire that killed three city firefighters. The report, compiled by regional emergency services officials, recommended hiring an incident command technician for each city battalion chief.
The spending proposal sets aside $900,000 for “stabilizing” trash and recycling collection, a frequent point of criticism for members of the City Council. Baltimore has been collecting recycling every other week for more than a year due to shortages with existing staff in the department. Earlier this year, several members of the council called for the resignation of the city’s public works director if a plan wasn’t introduced to restart weekly collection. Director Jason Mitchell has announced he will depart in June.
Scott’s proposed allocation will fund 37 new positions in the Department of Public Works, starting in January, the halfway point of the fiscal year. The employees, enough to build 10 crews, will help to meet staffing requirements for trash and recycling collection, allowing the department to avoid tapping employees charged with other tasks like alley cleanup and street sweeping, officials said.
Residents will be invited to weigh in on the proposed budget at the city’s first annual taxpayers’ night on April 26. City Council is due to begin considering the plan in mid-May, and a final budget must be approved by June 26.
For the first time in more than a century, the City Council will have the ability to cut and add to the 2024 budget proposal, a new dynamic in a process that typically favors the city’s mayor. The new budgeting power, approved by voters via a charter amendment in 2020, restricts the council additions to the total size of Scott’s proposed budget. But until now, the council was unable to reallocate any money that was cut, and instead had to rely on the mayor.
The new budgeting power comes during a period of high tension between the mayor and the council. The two have been at odds over Scott’s push to sign a maintenance agreement for the city’s conduit system with Baltimore Gas and Electric Co. and local control of the city’s police department. The council stalled the confirmation of Faith Leach, Scott’s pick for city administrator, last month in response.
Councilman Eric Costello, chairman of the council’s Ways and Means Committee and council’s budget hearings, told The Sun last week the tensions will have no bearing on the budget process.
“We have a job to do, and our job is to make sure we pass a responsible budget that reflects our city values,” he said.
Scott was optimistic about the spending proposal this week, despite significant challenges presented by the Blueprint for Maryland’s Future. Launched by the Kirwan Commission on Innovation and Excellence in Education and approved by the General Assembly in 2020, the Blueprint is supposed to fund a variety of programs including increasing teacher salaries, putting more counselors and health professionals in schools and giving extra support to schools with many poor students.
As the program has been implemented, however, jurisdictions with some of the highest numbers of poor students, including Baltimore, are finding staggering costs. Prince George’s County announced last month that it faces an $88.4 million increase in education spending as a result of the Blueprint, The Washington Post reported.
City budget officials said the unexpectedly high costs are the result of two portions of the funding formula: one that offers a credit based on the relative wealth of a jurisdiction and another that considers levels of childhood poverty in each jurisdiction.
Typically, childhood poverty is calculated using the number of children enrolled in free or reduced price lunches, but the Blueprint formula is considering Medicaid enrollment, Larsen said. As a result, an additional 110,000 students statewide are being classified as poor, many in predominantly wealthier or more rural areas. In response, state aid has been driven down, and Baltimore’s local share of the cost increased, Larsen said. City and state education officials testified last month in favor of legislation that would distribute funds based on U.S. census data instead, but the House bill did not pass to the Senate before the “crossover day” deadline, making it less likely to pass.
City officials said they are working with state officials to push for recalibrations to the formulas and to press for additional assistance. Scott said he has been in conversation with Gov. Wes Moore, as has Prince George’s County Executive Angela Alsobrooks.
“I’m confident we’ll be able to work with them on that,” he said. “We’re looking forward to trying to figure out the long-term way to deal with this issue.”
Maryland Policy & Politics
Comptroller Bill Henry, who will have a vote on the budget as a member of the Board of Estimates, said he was “pretty annoyed” to find out the Blueprint costs had expanded so rapidly.
“We knew when this was passed by the General Assembly that there would be additional costs for us as well and that they would be frontloaded,” he said. “We gritted out teeth and got it done last year. This year, however, we’re hit with another big increase, so now we’re forced to shift financial resources that we barely have.”
Henry questioned why legislators didn’t tweak the formulas during the current legislative session, which is due to end Monday.
“I’m grateful that we’re all providing more support to our school system, but if it comes at the expense of reducing the city’s ability to provide resources for those same families outside of school, that’s not the kind of help we were promised.”
Council President Nick Mosby said Baltimore’s proposed budget has made clear that the Blueprint formula is not working as designed. Mosby said he was confident that city leaders will be able to work with state leaders to find an arrangement where the original intent is realized.
The predicament should also push leaders to reconsider the oversight structure for city schools, Mosby said.
”When we’re forced to up the ante based off this new Kirwan funding formula, I think it’s important we start to have that conversation about what is the level of oversight and control the city has,” he said.