Stimulus will fund teacher pensions, GCEI
Layoffs prevented; community colleges will benefit
This story was updated 4:15 p.m. Feb. 20.
ANNAPOLIS — Gov. Martin O’Malley said Friday he will use $721 million of federal stimulus money to erase a number of his planned budget cuts to education and halt the layoffs of 700 state employees.
The money comes from the $787 billion American Recovery and Reinvestment Act, signed by President Obama on Tuesday. The money will fully fund the cost of teacher pensions, restore aid to community colleges and provide money to school systems where the cost of education is greater, he told reporters.
“We will be able now to make all our local school systems whole,” O’Malley told reporters in a State House press conference.
The money includes $329 million to pay for two years’ worth of growth of teacher retirement. It also supplies $176 million to fully fund the geographic cost of education index, or GCEI, state education aid that provides extra funding to counties where the cost of living is higher.
The school systems in the 23 counties and Baltimore city also will receive about $400 million directly for special education programs and funding efforts that target needy students.
Community colleges would receive $35 million over two years, roughly a 5 percent increase for both of the next two years.
The money doesn’t solve all of Maryland’s fiscal problems, however. Projections show the state will end fiscal 2010 — on June 30, 2010 — with a $63 million fund balance. The fund balance is a reserve that can be used to cover unforeseen expenses. Legislators typically would want that number closer to $400 million.
“I think what we want to do is work toward a larger fund balance. A $63 million fund balance is a slim fund balance,” Budget Secretary T. Eloise Foster said.
The budget projections also show a $630 million shortfall for fiscal 2011.
The federal money disappears after fiscal 2011, and O’Malley was asked if he was worried about drawing up budgets afterward.
“I’d be more worried if I didn’t have the money to plug the holes,” he said.
States can help the economy rebound with road, bridge and transit projects.
“But we can’t be doing that if we ourselves are awash or drowning in red ink,” he said.
After the press conference, Del. Kumar P. Barve was even more confident.
“You know what, if the economy grows at a 1 percent rate, that will be erased like that,” said Barve (D-Dist. 17) of Rockville. “If our economy hasn’t recovered in two years, then we have much more serious problems than the budget of Maryland and of the counties.”
O’Malley proposed a $14.4 billion budget plan to cover a $1.9 billion gap between expected spending and revenue. Maryland budgets must balance.
Tax collections have come in $840 million less than expected so far this fiscal year and the administration is anticipating revenues to fall $300 million short of projections.
“This is a big deal,” U.S. Rep. Christopher Van Hollen Jr. (D-Dist. 8) of Kensington said after briefing Montgomery County lawmakers on the stimulus package Friday morning. “Their children’s education will not suffer as a result of the economic downturn.”
Barve said the budget will help the counties, which were targeted for many budget cuts, including teachers pensions. Montgomery County Executive Isiah Leggett (D) had announced in December he was drawing “a line in the sand” to protect the money the state provides for teacher retirement.
“This budget that we’re producing represents the wish list of the Montgomery County government of what they wanted us to produce,” Barve said.
The fiscal 2010 spending plan that O’Malley proposed last month did not include money for the Geographic Cost of Education Index, a formula that provides more money to school systems where education is more expensive.
The federal dollars will allow full funding of the formula and allow the state to avoid teacher layoffs, Van Hollen said.
About 89,000 more students in Maryland will receive Pell Grants for college under the stimulus package, according to numbers Van Hollen provided to the Montgomery delegation. The federal bill calls for $15.6 billion to increase the maximum Pell Grant by $500.
Federal education aid to states includes $130 billion over two years.
Maryland’s share is more than $1.5 billion, with $160.5 million in discretionary funding.
Mandated federal aid includes $200.2 million for special education and $136.4 million for Title I schools, which serve a high number of low-income students. Montgomery County will see $32.8 million for special education and $20.3 million for Title I. Prince George’s County will see $29.7 million for special education and $27.9 million for Title I.
Maryland also stands to gain about $300 million in school construction bonding authority over two years.
Other highlights of the package include:
• $40.7 million in school improvement grants.
• $24 million for Child Care and Development Block Grants.
• $8.3 million for education technology.
• $10.5 million for Early Head Start.
• $7.2 million for Head Start.