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«NATIONAL ACCESS NETWORK TEACHERS COLLEGE, COLUMBIA UNIVERSITY Maryland Enacts Modern, Standards-Based Education Finance System: Reforms Based on ...»

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To simplify the state's school funding system, the Commission concluded that most of the approximately 50 state funding streams should be collapsed into four: the foundation amount and one adjustment factor for each of the three special needs populations. The Commission did not follow A&M's suggestions for a range of adjustment factors within the special education and low-income categories. The Commission's recommendations regarding flexibility also supported simplicity by eliminating restrictions on how local districts may spend various revenues from the State, instead allowing local boards of education and superintendents to decide how to use these "flexible block grants."5 In its final report, the Commission provided significant detail on the A&M adequacy studies and offered a rationale for choosing to use the lower "successful schools" foundation amount, pointing out that this approach linked the State's standards to empirical education costs, represented a middle ground (between the A&M and MAP professional judgment amounts), and was based on a methodology upheld by the courts in at least one state. The Commission also reduced the weighting for economically disadvantaged students from 1.39 to 1.1, based on the fact that 21% of these students also fall into one of the other special needs categories. Even with this reduction, state aid based on special needs would increase, under the Commission's recommendations, from the current 19% of state aid to 28% of the higher funding level in the fifth year.

To facilitate a smooth transition between the old and new finance systems, the Commission not only recommended a five-year phase in, but also provided a spreadsheet that projected state revenues for each school district year by year. The Commission's proposal ensured no decrease in any district's state revenue while the system was changing. Finally, the Commission recommended one research-based programmatic   mandate: full-day kindergarten for all students and pre-K for all economically disadvantaged students.

III. SURPRISING LEGISLATIVE APPROVAL

By early 2002, when the Commission issued its final report, Maryland's economy had slowed and its projected tax revenues had declined. The governor's budget proposal included a small increase in school funding, but postponed consideration of the Commission's recommended funding and structural changes. The school funding dilemma was further complicated by developments in politically powerful Montgomery County, where half of the state's students at-risk due to limited English proficiency lived and their numbers were increasing rapidly. As a result, Montgomery County legislators insisted that their schools would need more support from the State.

These factors combined to dim prospects for enactment of the Thornton Commission's recommendations during the 2002 legislative session, scheduled to end April 8th. The Bradford plaintiffs, therefore, started preparing for an anticipated return to court at the conclusion of the session. A possible lawsuit by rural school districts was also rumored.

A. Advocacy Coalition

Nonetheless, advocates formed a statewide coalition and re-doubled their efforts to persuade legislators that their local constituents supported adequacy and the Commission's proposals. Crucial members of the coalition were Advocates for Children and Youth, the ACLU of Maryland, the Maryland Caucus of Black School Board Members, and the Maryland PTA. The coalition hired a polling firm to survey constituents by legislative district and supplied the results to each legislator, with statewide totals for the legislative leadership. The survey showed overwhelming support for the Thornton proposal and a willingness to pay higher taxes. The coalition also supplied each legislator with the amount of money their local school district would receive and the data that demonstrated stagnating scores on the Maryland assessments (MSPAP).

The coalition tried to reach out to all areas of the state through the print and radio media, and dedicated a staff member to relate to people in the Baltimore suburbs.

Advocates set up a website where people could join with a letter in support of the Thornton proposal and with additional ideas for letters on another web page. Also, the PTA and other member organizations were able to facilitate a flood of emails to legislators.

The focus on adequacy for all districts, instead of equity for low-wealth districts only, helped unite rural poor, urban poor, and even affluent suburban stakeholders and legislators. Adequacy also provided advocates with concrete items and programs they could point to as essential for meeting state standards. The cost studies had delineated the number of teachers, class sizes, full-day kindergarten, pre-K, after-school programs, and other specific educational investments on which the money would be spent. Adequacy of   funding aligned with state standards is a logical, necessary element for successful standards-based reform.

In a surprising 30-17 vote on April 3, 2002, the Maryland Senate passed a bill to adopt the Commission's finance system reforms and raise the state's tax on cigarettes to help fund an increase in state aid to school districts. An expected filibuster against the tax increase failed to materialize because the bill added $200 million for Montgomery County beyond the $1.1 billion called for by the Commission. The senate's proposal moved on to the House of Delegates, where the add-on for Montgomery County schools proved equally effective in spurring support. By the close of the legislative session, the Commission's ambitious recommendations for structural changes and a $1.3 billion increase in state funding, to be phased in over the next six years, awaited the governor's promised signature.





The legislature's blueprint for transforming the education finance system closely followed the Thornton Commission's recommendations, except for the $200-million add on for Montgomery County, which secured the votes needed for passage. But this modification will likely have no major consequences. It reduced the improved equity in the Commission's model (to an estimated 75% wealth equalization) and nudged the projected state share of education spending, upon full implementation, from 49% to 50%.

In timely fashion, the Maryland legislature approved the budget for the coming school year this April. School district administrators can plan for the next two years based on the new finance system and relatively secure funding. With the simple, straightforward factors in the new system, districts can adjust funding projections as enrollments change.

Schools can, at least tentatively, plan for several years because the legislature projected state allocations for each district for the entire six-year implementation.

B. Pending Questions

However, funding for the last four years is not certain. One of the last sticking points for passage of the legislation was the need for additional revenues beginning in year three. The final bill included a provision that requires both chambers to approve a joint resolution, in 2004, affirming that the state has the fiscal resources to fund scheduled increases. Otherwise, the phase in will be put on hold. But a consensus of optimism surrounded this future decision point, as discussions focused on how to raise the revenues, not whether it would be possible. Advocates feel that there is momentum toward fulfilling the funding needs because the systemic changes have already been put in place and the school districts are expecting the money. People across the state are looking at the year-by-year projections to see when the "adequacy gap" closes for their schools.

Still, tax implications of this dramatic turn of events are ambiguous. The state tax on cigarettes is expected to fund only the first two years of the reform. The new legislation strengthens maintenance of local effort, which was already a part of Maryland law, and requires Prince George's County to impose a 5% sales and use tax on telecommunications   and dedicate it to the schools. Begging for resolution is the billion-dollar question, how will the State generate the funds for the bulk of the $1.3 billion, to be phased in over the last four years of the plan. Sales tax revenues, lottery funds, and new revenues from installing slot machines have all been mentioned as possible sources.

Looking forward, the new legislation established a commission to study the state's tax structure and recommend changes, and set up a task force to study facilities funding in recognition of the need for additional classrooms for the kindergarten and pre-K mandates. The new law also requires the Maryland Department of Education to hire experts to develop a more up-to-date geographic cost-of-education index specific to Maryland, which will be used to adjust the system's allocations accordingly. Advocates asked the candidates in the 2002 gubernatorial race to address these issues and the tax question.

IV. CONCLUSION

Maryland is one of only a few states that has adopted a modern, standards-based education finance system, that is, one built on a cost analysis of the resources needed to ensure the capacity of schools to help students meet state academic standards. With a reduced but reasonable multiplier for economically disadvantaged students, funding for poor schools may finally become sufficient to provide their students with a genuine opportunity to obtain a 21st-century education.

Maryland's successful experience with funding reform can inform similar efforts in other states. The new law relied heavily on a bi-partisan commission set up to study funding needs which, in turn, relied heavily on a costing-out study performed by one of the nationally recognized firms in this field. Not surprisingly, other factors were also important, although we cannot know to what degree. Pressure from the court ruling in Bradford and from grassroots advocates and advocacy organizations played a role, as did the ability of the legislature to gain the crucial votes of members from Montgomery County. We will be watching to see how and when other states follow Maryland's lead.

____________________

Endnotes:

1. Bradford v. Maryland State Board of Education, No. 94340058/CE 189672 (Circuit Court for Baltimore City June 30, 2000).

2. Augenblick & Myers, Inc., Calculation of the Cost of an Adequate Education in Maryland in 1999-2000 Using Two Different Analytic Approaches 1 (September 2001).

3. Commission on Education Finance, Equity, and Excellence, Final Report xii (January 2002).

4. Id. at xiii.

5. Id.

–  –  –

Access website's Maryland page.

Augenblick & Myers, Inc., Calculation of the Cost of an Adequate Education in Maryland in 1999-2000 Using Two Different Analytic Approaches (September 2001).

The Baltimore Sun, Howard Libit, “Md. Cigarette Tax Increase Will Cover Only Two Years of School Plan Spending,” April 8, 2002.

Bradford v. Maryland State Board of Education, No. 94340058/CE 189672 (Circuit Court for Baltimore City June 30, 2000).

Bradford v. Maryland State Board of Education, No. 94340058/CE 189672 (Circuit Court for Baltimore City Oct. 18, 1996).

Commission on Education Finance, Equity, and Excellence, Final Report (January 2002).

Commission on Education Finance, Equity, and Excellence, Preliminary Report (January 2000).

Department of Legislative Services, Maryland General Assembly, 2002 Session, Senate Bill 856, Fiscal Note, Revised.

Interview of Bebe Verdery, Education Director for the ACLU of Maryland (April 2002).

Interview of Christopher Maher, Education Director at Advocates for Children and Youth (April 2002).

Management Analysis & Planning, Inc., A Professional Judgment Approach to Determining Adequate Education Funding in Maryland, Final Report (June 5, 2001).

Metis Associates, Inc. Interim Evaluation of the Baltimore City Public School System, 1998-1999

Master Plan Implementation and Related Issues (February 1, 2000) (including Appendix A:

Council of Great City Schools, Adequate Financing of Urban Schools, An Analysis of Funding of the Baltimore City Public Schools (January, 2000)).

Senate Bill 856, Maryland Legislature's website at www.mlis.state.md.us.

Washington Post, Nurith C. Aizenman, “Schools Panel Urges Increase In Md. Funds, Poorer Counties Would Receive Greater Share of $1.1 Billion,” November 2, 2001 at B01.

See Also:

New York Times, Editorial, “A Visionary School Plan in Maryland,” April 30, 2002.

Washington Post, Lori Montgomery, “$1.3 Billion Plan For Md. Schools Nears Approval,” April 5, 2002 at B07.

525 W. 120TH ST., Box 219, NEW YORK, NY 10027 ● (212) 678-3291 ● FAX (212) 678-8364 ● http://schoolfunding.info

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