Mandated education spending leads to tax increases

John J. Walters Jun 1, 2015

Maryland’s fiscal year 2016 budget grew by $590.2 million, and at least $175 million of that is directly attributable to formula-mandated increases in education spending.

Maryland school districts are already spending between $1,000 and $6,000 more per pupil than the national average, but the Bridge to Excellence in Public Schools Act of 2002 (called the Thornton Plan) requires that spending for education increase every single year regardless.

These mandated spending increases affect both the state and county budgets, thanks to “maintenance of effort” laws that require counties and states to spend more on education. In fact, these MOE laws even allow counties to exceed local limits on taxation so they can meet the ever-growing demands of education funding.

Prince George’s County is a perfect example of how desperate local politicians can get as they scramble to feed the beast. County Executive Rushern Baker wants to increase local property taxes in Prince George’s County by 15.6 percent—a plan that could be the beginning of the decline of the wealthiest majority-black county in the United States.

Not only that, Baker is also seeking a 50 percent increase on wireless, cable and home phone taxes for his county. The tax increase could result in a Prince George’s County family paying $360 per year just in taxes on their cell phones.

While Maryland Governor Larry Hogan calls this year’s legislative session a success because he avoided increasing state taxes, taxpayers should know that local counties also have the power to pull dollar bills right from their pockets. The general defense against this is to establish legal limits for local taxation, but when legislators have the power to disregard these limits to meet required spending levels, that defense is made useless.

It will be up to Governor Hogan to challenge the Thornton Plan—not just because the state cannot afford to continue to increase spending on education every year, but because the counties (and people there) cannot afford it either.