Hogan’s First Budget Has Some Bad News for Montgomery County Schools

But money for Purple Line remains in budget, pending a "thorough review"

by Louis Peck - MoCo Politics Blog

Gov. Larry Hogan presents his budget on Jan. 22., 2015. via Gov. Larry Hogan's Youtube video of budget presentation

Barely 24 hours after taking office, Gov. Larry Hogan Thursday unveiled some of the highlights of the annual budget that he will send to the Maryland Legislature Friday – and the plan has at least one piece of bad news for Montgomery County schools.

Even as Hogan put forth what he described as “record spending in K through 12 education” for the coming 2016 fiscal year, his budget reduces the state’s so-called geographic cost of education index – GCEI – by 50 percent. The GCEI is designed to supplement state education funding in Montgomery and 12 other counties in the state deemed to be high-cost areas.

“We do make some adjustments to the GCEI, not nearly as drastic as most people were predicting,” Hogan told reporters. But Montgomery school officials warned that the reduced GCEI level – which translates into a cut of more than $17 million for county schools in the coming fiscal year – could force a reduction of 250 teaching positions or 400 support staff slots.

Meanwhile, Hogan –in a move that provided a bit of comfort to supporters of the light-rail Purple Line – announced that funding for the Purple Line, put in the capital budget by the now-departed O’Malley administration, is being kept in place while the future of the $2.45 billion project is evaluated.

It appears the Hogan administration is now under an effective deadline of March 12 to make a decision on the Purple Line’s future. That is when bids are due from four private partnerships seeking to build and operate the line; the state could be on the hook for $8 million in payments to the bidders if it scraps the project after the bids are submitted.

“We want to do a thorough review of both projects before making any final decisions,” said Hogan, referring to both the Purple Line and Baltimore’s $2.9 billion Red Line. Hogan, only the third Republican to be elected governor in the past half century, was frequently critical of both projects during the campaign—questioning whether the state could afford them.

“Our budget gets spending under control and establishes a realistic trajectory for spending in the future,” Hogan said during a press conference, while delivering a 10-minute statement that often referred back to his campaign pledges to rein in spending and cut taxes.

Hogan left the press conference after answering only a handful of questions, turning the session over to his chief budget aides – who said documents with full details of the 2016 budget would not be available until Friday, when they are formally submitted to the General Assembly.

Among the limited details made available today was the GCEI cut, which comes at a time when the school system—squeezed by annual enrollment increases averaging 2,500 students – already is seeking a 5 percent increase in operating funds over the current fiscal year.

Critics were quick to note that the GCEI reductions will fall most heavily on Montgomery and Prince George’s counties and Baltimore city. “What do they have in common? They did not vote for [Hogan] in November – three of the four jurisdictions that did not vote for him — and are by far the largest bloc of Democrats in the General Assembly,” said Sen. Richard Madaleno, D-Kensington.

While roughly 80 percent of the operating funds that Maryland spends annually is mandated by laws enacted by the General Assembly, the remaining 20 percent – so-called discretionary spending – is firmly under the governor’s control by the terms of the Maryland Constitution. This involves funding that the General Assembly is only allowed to cut, and cannot add to it.

It appears that the GCEI falls under the latter category, meaning that any additional money for GCEI would have to come as part of negotiations that usually accompany the end of each legislative session – when governors sometimes make budgetary concessions in return for legislative approval of statutory changes sought by the executive branch.

“We still have some work to do on education funding,” observed Sen. Nancy King, D-Montgomery Village, who chairs the county’s Senate delegation. King, Madaleno and other members of the Senate leadership were briefed by Hogan this morning, immediately prior to his appearance before the media.

Asked the reason for the GCEI cut, Budget Secretary David Brinkley – a former state senator from Frederick County, which also benefits from the program – said: “What we were trying to do, as we dealt with the menu of issues here, was to try to minimize any kind of impact across the board – while, at the same time, making sure we could provide money and investment in school construction.”

Hogan said his budget contains $290 million statewide to “fully fund” school construction – another major priority for Montgomery County, in light of mushrooming enrollment. But it was not immediately clear, pending release of budget details, how much of this funding would be directed to the county.

In addition to the cuts in GCEI, Madaleno – vice-chair of the Senate Budget and Taxation Committee – said state officials had indicated per pupil funding growth would be capped at 1 percent for the 2016 fiscal year. It had been expected to grow by 1.4 percent, he added.

Madaleno contended the Hogan administration’s claim of record spending on K through 12 education is based in part of contributions being made toward teacher pensions. “From a Montgomery County perspective, with half of GCEI going away, I wouldn’t be surprised to see our amount of state aid actually goes down on a per pupil basis,” he added.

Hogan, while saying that a 2 percent budget cut is being imposed on state agencies and departments, told reporters there would be no layoffs or furloughs of state employees. But Madaleno said Hogan administration officials, in briefing state legislators, had indicated that a cost of living increase granted this year would be transformed into a bonus – with no further pay increases slated for state employees during the four years of Hogan’s term.

“He really does balance the budget on the backs of state employees,” Madaleno charged. “[In his inaugural address], he talked about how he wanted a more efficient, well-run state government. This isn’t necessarily the way to motivate your employees to perform.”