League of Women Voters of Maryland

Several provisions in HB 1 – Budget Reconciliation Act (Speaker by Request of the Administration) impact K-12 public education in Maryland. The “target per pupil foundation amount” used in the funding formulas for state aid is frozen at the FY 2008 level for FY 2009 and FY 2010. For FY 2009 this change in the law will reduce state aid to public education by $207.3 million. In subsequent years the per pupil amount will be determined by calculating the lesser of the implicit price deflator for state and local governmental expenses, the consumer price index for the Washington-Baltimore Metropolitan Area, or 5%. If there is no increase in either index, the previous year’s per pupil amount will be used. For FY 2009 and FY 2010 the state will provide a 1% supplemental grant to any local school system that does not receive that level of increase over the previous fiscal year in state financial aid. For this purpose 50% of the geographic cost of education index (GCEI) will be included in the calculation in FY 2009 and 60% will be included in FY 2010. In addition, only one-half of the teachers’ pension and retirement payments will be included in the calculation. Continuation of these grants must be reviewed in 2012 as part of the adequacy study required by the 2002 “Thornton” Act. These supplemental grants will restore a total of $17.3 million to ten county school systems in FY 2009. The bill also requires that the GCEI must be updated every three years beginning in 2009. The Maryland State Department of Education must submit the update to the General Assembly by September 1 of the year it is updated and must also recommend legislation that codifies the adjustment and requires the GCEI adjustment to be used to adjust state aid as of July 1 of the updated year. In FY 2009, the GCEI grants will add #38.1 million to 13 jurisdictions. The total statewide loss of K-12 education aid resulting from the changes will be $151.9 million, although there will still be an estimated increase of $111.3 million in state education aid over the current fiscal year.