With decisions expected soon from the commission proposing big increases to Maryland education funding, Gov. Larry Hogan is ramping up his fight against the plans with a high-dollar fundraiser for his political lobbying organization at Live! Casino & Hotel Maryland.
An advertisement for the Nov. 7 event, called the “Governor’s Gala,” features a large photo of Hogan and encourages guests to purchase VIP tables for $25,000 each.
“There is no limit on the amount that you can donate to Change Maryland Action Fund,” the ad states.
Under Maryland law, donors may not give more than $6,000 directly to Hogan as a candidate per campaign cycle, and those donations must be disclosed. Also, state law prohibits casino owners from donating to a candidate.
But Hogan’s event at the Hanover casino owned by businessman David S. Cordish falls outside those laws, because the governor’s political lobbying arms ― Change Maryland Inc. and Change Maryland Action Fund ― are not technically functions of his individual campaign committee.
The Change Maryland groups are trying to raise $2 million to advance Hogan’s political agenda, which includes his attempt to rebrand the so-called Kirwan commission, which has recommended large funding increases to upgrade the state’s public schools, as the “Kirwan Tax Hike Commission.”
“I think it’s unseemly,” said Del. Maggie McIntosh, the Baltimore Democrat who is chairwoman of the House Appropriations Committee and a member of the Kirwan Commission. “He’s got to be the only governor in the country that’s trying to raise money to defeat funding for public education. I just can’t imagine another governor in the country doing this. I really wish the governor would come and look at the work the Kirwan commission is doing.”
The Commission on Innovation and Excellence in Education is nicknamed the “Kirwan commission” after its chairman, former University System of Maryland Chancellor William “Brit” Kirwan. It has recommended free, full-day prekindergarten for low-income 3- and 4-year olds, raising standards so all students are ready for college or a career upon graduating high school, and establishing a strong accountability system to oversee its recommendations.
Those recommendations would cost about $3.8 billion annually when phased in after 10 years, but the commission is still working out its recommendations for who should pay how much.
"The governor is fighting to protect taxpayers, and make sure that education dollars go into the classrooms and are not wasted in more bureaucracy.”— Mike Ricci, spokesman for Gov. Larry Hogan
Mike Ricci, a spokesman for Hogan, said the Republican governor is not against some of the ideas contained in the commission’s recommendations. But, he said, Hogan wants to ensure the Democratic-controlled legislature doesn’t push for large tax hikes to pay for them.
“Education is Gov. Hogan’s top priority, and he has supported many of Dr. Kirwan’s recommendations," Ricci said. "Unfortunately, partisan legislators have turned what should be a conversation about better results for our kids into a push for massive state and local tax increases. The governor is fighting to protect taxpayers, and make sure that education dollars go into the classrooms and are not wasted in more bureaucracy.”
A work group is expected to vote Tuesday on recommendations for the state to provide about $2.4 billion more annually for schools by 2030 ― a 32% increase over current funding levels. When complete, the jurisdictions receiving the largest increases in annual state funding could be: Prince George’s County ($446 million); the city of Baltimore ($354 million) and Baltimore County ($305 million).
Local jurisdictions also could be required to increase their funding of schools by about 8%, and two jurisdictions are in line to receive mandates for particularly large increases in funding. The commission is considering a recommendation to require Prince George’s to increase funding for its schools by $324 million annually and Baltimore city to increase funding for its schools by $313 million a year. Those increases would be phased in by 2030.
“I think it’s unseemly. He’s got to be the only governor in the country that’s trying to raise money to defeat funding for public education.”— Democratic Del. Maggie McIntosh of Baltimore
Given that Baltimore’s property tax rate is about double Maryland’s other jurisdictions, several commission members expressed skepticism the city would be able to afford such an increase.
“Prince George’s and Baltimore city are the two counties that are hit the hardest in terms of needing to come up with more money,” McIntosh said last week at a meeting of the work group.
“There’s no doubt that the city has room to contribute more, [but] $313 million is definitely an undoable number,” said state Sen. Bill Ferguson, another Baltimore Democrat.
The fight over education funding is expected to be the biggest issue in the next General Assembly session, which begins in January. It comes as another headline-grabbing proposal will compete for some of the same state dollars.
The city of Baltimore and The Stronach Group, which owns horse racing tracks in Maryland, is pursuing a deal to keep the Preakness Stakes in Baltimore by asking the legislature to authorize the Maryland Stadium Authority to finance $375 million in upgrades to Pimlico Race Course in Baltimore and the Laurel Park track in Anne Arundel County. Under that plan, the legislature would need to assign more than $8 million annually from casino revenue that would have otherwise gone — within a decade — to a state fund for education.
Cordish, whose casino is hosting Hogan’s fundraiser, has long been a rival of The Stronach Group. He battled with the Stronach-controlled Maryland Jockey Club over getting a license for his Hanover casino and once tried to buy Pimlico and Laurel Park.
But organizers of the event next month said Cordish is not attempting to influence the governor by hosting the fundraiser. Thomas E. Kelso, chairman of the Larry Hogan for Governor campaign and Change Maryland Inc., said the Change Maryland organizations are paying full price for use of the site, food and drinks. And the event was scheduled long before the Preakness deal was reached this month, he said.
Kelso said Cordish has never donated to Change Maryland or the Change Maryland Action Fund. Change Maryland Inc. is a nonprofit social welfare organization, under the federal tax code. The Change Maryland Action Fund is a tax-exempt political organization that engages in grassroots lobbying. Neither is a campaign committee or a political action committee, so they are not registered with the Maryland Board of Elections and do not need to disclose their donors.
Cordish said the Live! Complex has hosted numerous political events for Democrats and Republicans, as well as other groups.
“All of these events — political, business, and military — without exception pay full, normal charge for use of the facility, food and drink," he said.
The stadium authority, of which Kelso is also chairman, has had a role since 2013 in raising bond money to renovate and replace schools in Baltimore.
Kelso said his role with Change Maryland has no impact on his role with the stadium authority. “We follow the laws the legislature passes,” he said.
McIntosh said she’s not worried about any political influence affecting the stadium authority because of Kelso’s integrity.
Maryland Policy & Politics
“He has been very, very decent to work with,” McIntosh said. “I know how dedicated he is.”
The Maryland State Education Association, the teachers’ union, which led all lobbying efforts in Annapolis in the 2019 General Assembly session in spending $784,000, plans to run $500,000 in television ads to support school funding.
“It’s incredibly disappointing that at a time when overwhelming majorities of Marylanders want to see increased investment in our students — including expanding career technical education, lowering class sizes, and more equitably funding our schools — Gov. Hogan is raising untraceable, unlimited money from millionaire donors to run a misinformation campaign that flies in the face of what Marylanders want and students need," said Sean Johnson, legislative director of the state’s teacher union.
McIntosh said she doesn’t think large tax hikes on Marylanders will be needed to fund the commission’s recommendations.
Economic growth will cover some of the costs, she said. And legislators are considering other revenue streams, such as legalizing marijuana and sports betting; eliminating some existing tax credits; and expanding a tax on online sales from out-of-state companies — such as the Boston-based home goods retailer Wayfair — as options to raise money.
“If we do sports betting, if we do the Wayfair tax, the gap keeps getting smaller and smaller,” McIntosh said. “We’re also being more realistic about how the program rolls out without watering down its integrity. People are beginning to realize that with a strong economy and good revenues coming in, we’re not going to need some big tax hike."