As most cash-strapped states struggle just to maintain education funding this year, Maryland legislators are taking another path: They passed a six-year plan last week to ultimately add $1.3 billion annually for schools and to reduce inequities.
The bill, considered all but dead a few weeks ago, was pushed through in the final hours of the legislature’s 2002 session.
The state will add 34 cents to its cigarette tax to make a two-year down payment on the plan, which includes new accountability measures for district spending. Gov. Parris N. Glendening, a Democrat, said he plans to sign the bill. Others hailed it as a milestone.
“It’s a landmark decision,” said state superintendent of schools Nancy S. Grasmick in an interview last week. “It’s the first time we’ve had a formula that I think works for all children.”
“With this funding stream and policy change, in effect school districts will have no excuses—the resources are there to do a good job,” said Sen. Barbara A. Hoffman, the Baltimore Democrat who spearheaded the legislation.
With the downturn in the nation’s economy, which has motivated states to make the most of their revenue sources, cigarette and other “sin” taxes are getting fresh attention. Several other states are looking at raising cigarette taxes to pay for education, said Steve Smith, the manager of the National Center on Education Finance at the National Conference of State Legislatures in Denver.
“There’s been a lot of tobacco money targeted toward education,” he added, referring to proceeds from the settlement of state lawsuits against tobacco companies. But he warned that, unlike tobacco-settlement funds targeted to education, cigarette-tax revenue can fluctuate more than other types of taxes.
Maryland’s changes came after a state commission—led by Alvin Thornton, a former chairman of the Prince George’s County, Md., school board—recommended more funding and a system to better ensure equity and adequacy for the districts with high numbers of students in poverty.
The bill was in doubt until just a few days before its passage, with even its strongest supporters skeptical that the lawmakers could find enough money to pay for it.
But, thanks in part to a dramatic lobbying push by grassroots groups and the threat of lawsuits by districts enrolling many poor children, Sen. Hoffman combined the politically palatable cigarette- tax proposal, which raises the state tax to $1 per pack, with the package of school-finance reforms.
“Nobody thought we could do it,” she said last week. “But there was a lot of support for a cigarette tax, and I wasn’t going to waste it.”
There is a catch, however: The cigarette tax will finance only the first two years of the plan, and after that, it will be up to the legislature to find another source of revenue. Lawmakers have planned on $73 million this year and $148 million next year from the cigarette-tax proceeds.
The legislation comes at a time, though, when the state is facing significant revenue shortages, possibly as much as $775 million next year. The legislature must approve a joint resolution to continue financing the plan past the first two years.
Most legislators agree that Maryland will have to come up with a new revenue source, such as slot machines, to keep its commitment after the first two years. The measure also includes a provision allowing the state to back down from its commitment in the case of serious economic woes.
State elections for a new governor and the legislature take place in November, and some said the future funding of the bill could be a leading topic for debate.
“That’s really the question,” said Larry Lorton, superintendent of the 6,000-student Caroline County district. “I think there’s a great will ... but the barriers to get there are daunting.”
Sen. Paul G. Pinsky, a Democrat representing Prince George’s County, argued that it would be tough politically, though, for the legislature to renege.
“There’s going to be some ugly battles on how it should be funded,” Mr. Pinsky said, referring to the controversial slot machine option. “But it’s going to be hard for people to say, ‘No, let’s change our commitment.’”
Unlike school funding overhauls in many other states, the Maryland legislature did not act under court orders or a pending lawsuit.
“School finance reform and litigation generally go hand in hand,” said Arturo Perez, a policy analyst with the National Conference of State Legislatures. “There have been various school finance reforms around the country, and more often, they come on the trail of litigation.”
But it was the threat of litigation that may have prompted the Maryland legislature to make an about-face and pass the bill in the session’s final days, some observers suggest.
“If this bill did not pass, the speculation is pretty consistent that a number of counties would have filed suit against the state,” said Christopher Maher, the education director of Advocates for Children and Youth, a statewide group based in Baltimore.
Under the legislation, Maryland’s 24 school districts are projected to receive an average of $6,043 per pupil from the state by the 2007-08 school year, up from the current $3,493 allotment of state aid and amounting to an average increase of 73 percent. That’s far above the national average for state contributions— which was about $3,250 in the 1998-99 school year, the latest year figures are available.
The plan targets districts with the most poor children and thus will mainly benefit the Baltimore city schools, the Prince George’s County system just outside Washington, and some rural districts. The Baltimore district, for instance, would see its state aid rise from $6,073 to $11,381 in the sixth year, and Prince George’s County’s aid would rise from $3,921 to $7,998. Originally, the plan would have excluded the state’s wealthiest districts, such as the 137,000-student system in Montgomery County, a Washington suburb. After legislators representing those districts banded together, the legislature approved an amendment to strip the wealth- equalization provisions, allowing the wealthier districts a small share of the pot. The legislation also gives districts flexibility through new discretionary funding, something many education leaders say was needed in a state where nearly all state education aid has been channeled through categorical grants.
In exchange for the flexibility, the measure requires the districts to submit master plans detailing their goals and proposed expenditures.
The embattled Baltimore district, with 99,000 students, has had such a master plan for several years, under an agreement the city entered into with the state to receive more funding for the district’s schools.
That additional money has helped increase test scores and improve services in the city’s elementary schools, said Bebe Verdery, the director of education reform for the Maryland Chapter of the American Civil Liberties Union. She predicted the new influx of money would allow the district to concentrate on making improvements in the upper grades.
“The lack of money has allowed [Baltimore] to say that they haven’t been able to improve middle schools and high schools,” said Ms. Verdery, who is also a member of the Thornton Commission and has studied the Baltimore schools. “With this, they won’t be able to say that.”
Sen. Pinsky said that the Prince George’s County allocation would likely be spent on higher salaries to compete for better teachers and administrators, as well as on professional development and on the addition of teachers to lower class sizes.
The 132,000-student district has been roiled by conflicts between its school board and its superintendent, Iris T. Metts. The leadership squabbles led to the legislature’s passage of a separate measure stripping the Prince George’s County school board of its power and forcing Ms. Metts to reapply for her job.
A version of this article appeared in the April 17, 2002 edition of Education Week as Md. Schools Get Big Hike In Funding