The Maryland Public Policy Institute
MPPI IN THE NEWS
FEBRUARY 6, 2009
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ANNAPOLIS - Lawmakers often refer to funding mandates in the state budget as the legal requirements that tie their hands from making spending cuts.
Faced with a $1.9 billion deficit and mandates - in both funding formulas and specified dollar amounts - that account for more than two-thirds of the state's general fund budget in fiscal 2009, lawmakers say they are scrutinizing the spending requirements like never before.
But some say they are hesitant to change the formulas even slightly for fear that unintended consequences could result.
"I think there's ongoing interest in looking at mandates," said Del. John L. Bohanan Jr. (D-Dist. 29B) of California. "But it may fall into the ‘too tough' category to begin doing that. As soon as you go tinkering with them, sometimes it has the unforeseen result of pitting one region or jurisdiction against another."
That would be problematic in a session when delegation leaders are preaching unity with colleagues in other jurisdictions in the name of passing a budget.
It is "critical" for the state's largest jurisdictions - Prince George's, Montgomery and Baltimore counties and Baltimore city - to work together, said Sen. Nancy J. King (D-Dist. 39) of Montgomery Village.
There have been rumblings about restructuring how the state calculates net taxable income from county to county and average daily school attendance - two major pieces of education funding formulas, King said. But the cost in political capital is too great for this year.
"If we open up any of those formulas, we're going to open all of them, and it's going to pit county against county and be really ugly," King said.
All told, mandates accounted for $8.8 billion in the fiscal 2009 budget and are expected to grow by $220 million in fiscal 2010.
In fiscal 2008, 15 programs had more than $100 million in mandated spending in the general fund, accounting for 89 percent of all mandated spending.
That includes spending on students with disabilities, foster care and disparity grants to counties whose per-capita taxable net income falls below 75 percent of the state average.
The interconnectedness of many of the mandates creates a kind of budget Jenga - the game where contestants try to pull pieces from a tower without toppling it.
While one formula puts a jurisdiction at a funding disadvantage over its neighbors, another formula puts it at an advantage, lawmakers said. Changing only a few formulas could upset the balance, toppling the budget.
The Thornton school funding law - passed in 2002 in an attempt to make education spending equitable statewide - consolidated more than 50 funding formulas in a delicate balance.
"I wouldn't support changing [Thornton]," said Sen. Paul G. Pinsky (D-Dist. 22) of University Park. "The question is: ‘What's the right thing to do with equity?' So to chuck that would be a mistake."
But the $1.3 billion Thornton plan also created a large structural deficit that the General Assembly tried to address during a special session in 2007 by passing a series of tax hikes and budget cuts and by clearing the way for a slot machine gambling referendum.
Christopher B. Summers, president of the nonprofit Maryland Public Policy Institute in Germantown, said it was "reckless" for lawmakers to pass Thornton without identifying a revenue source.
Mandated spending makes it difficult for the legislature to shift its focus from taxes to what Summers sees as the real problem.
"The debate needs to shift to the spending side," he said. "And that never happens."
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