How to fund the Kirwan Commission’s recommendations to improve Maryland public school question continues to be the biggest issue in Annapolis for the General Assembly.
A proposal to create new revenue by expanding the state’s sales tax was unveiled this week to raise the new revenue needed. We don’t believe the foolish plan deserves any attention at all, but over the coming weeks it will get a thorough review because it’s supported by many Democratic leaders.
Maryland has an expense problem. Many people believe it’s too expensive to live and do business in Maryland currently, while many lawmakers maintain that’s perception and not reality. There are a bevy of financial comparisons proving the case living and doing business in Maryland is more expensive than neighboring states. There are numerous examples of people opting to move to nearby states a short drive away to save on property and income taxes, and businesses deciding to relocate due to expenses being too high in this state. We believe there is merit to these concerns.
Any change to existing laws by the state to heighten the expensive perception, or reality, must get the most careful review. The good news is that will happen as the legislature’s session continues.
The bad news is if the majority of the state’s Democratic Party legislators support the plan to broaden the sales tax’s reach to new services, which were previously untouched, it will likely happen. There will be nothing Republican Gov. Larry Hogan can do to stop it because his veto is irrelevant and simply symbolic. It’s worth noting House of Delegates Speaker Adrienne Jones and Senate President Bill Ferguson, the new Democrats in charge of the chambers this year, have said publicly Kirwan’s recommended changes will be largely funded without major increases to the sales, income or property tax rates.
The proposed legislation unveiled this weeks seeks to broaden the sales tax to several industries, namely legal, accounting and engineering services. The proposed change, however, does reduce the existing sales tax from 6 cents on the dollar to 5 cents. It was suggested by Montgomery County Democrat Del. Eric Luedtke, majority leader of the House, the change would grow sales tax revenue by $2.6 billion by 2025, according to The Baltimore Sun. Sales tax revenue currently amounts to $4.9 billion for Maryland. In the same article, Luedtke estimated an average family with a $80,000 salary would pay approximately $156 more annually under the new plan. The cost for businesses is unknown at this point. It’s a safe assumption any new expenses incurred by businesses will be handed down to consumers in some fashion. The new funds raised through the tax change would be directed to carryout the Kirwan Commission’s suggested overhaul of public schools, according to supporters.
The Kirwan Commission’s recommendations deserve attention by legislators. Among the vast calls for change are an expansion of pre-K programs, increased teacher pay, requiring more teacher certifications, improvements to college and career readiness pathways, more resources for at-risk students and heightened governance and accountability. It’s important for Worcester County citizens to know the commission’s recommendations do not address the top problem local schools face. Due to an unfair and unrealistic funding formula, which considers Worcester one of the richest counties in the state, local schools are woefully underfunded by the state. This disparity results in Worcester County government having to fund an unusually large percentage of the school system’s budget. Unlike most counties in Maryland, Worcester County annually funds more than 80% of the school system’s budget. In many jurisdictions, the state funds a majority of the local school system’s budget due to the state’s funding formula.
It took the commission more than two years to offer its insights on how to improve education in Maryland. Its unrealistic to think in one year the state would be able to fund all the overhaul proposals. It will have to be phased in over several years if the goal is to minimize the impact on Marylanders’ expenses. Surely, a majority of Maryland residents and businesses want to see improvements to education to ensure students and teachers are given the best opportunities to succeed. However, it would be wrong to assume residents and businesses want to see that goal accomplished at the expense of their livelihoods being jeopardized by increases in taxes and fees.
If it’s found the Kirwan recommendations must all advance – debatable in education circles — we would prefer the option of directing funds raised through legalizing sports betting or increasing the state’s cigarette tax to the effort. Whatever funding mechanisms are identified, there must be a balanced approach to achieving the revenue goals over multiple years.