Budget Negotiators Approve Plan With More Kirwan Funding, Message to Chancellor

General Assembly budget negotiators have settled on a $46-billion-plus spending plan they will present to their colleagues later this week. The compromise spending plan includes about $255 million in initial funding for recommendations of the Commission on Innovation and Excellence in Education, also known as the Kirwan Commission.

Included in the spending decisions were some political messages as well, including a cut to the University System of Maryland’s budget in the exact amount of the chancellor’s salary.

House and Senate budget negotiators have been working since Friday to resolve roughly 100 differences between their proposed spending plans.

A major issue was how the two chambers differed in finding money for the Kirwan Commission’s recommendations to expand pre-kindergarten, boost teachers’ salaries, increase special education funding and provide extra services in schools with high concentrations of poverty. The House of Delegates passed a budget bill that allocated $320.6 million to Kirwan spending, while the Senate passed a more modest $225 million allocation.

The budget conference committee compromise will steer $255 million to Kirwan Commission priorities in the first year and identifies $355.3 million for initiatives in 2021.

The House and Senate had each achieved their education spending plans by cutting budgets elsewhere and “fencing off” funds for different purposes. When money is fenced off in a budget plan, Maryland’s governor, thanks to a state Constitution that gives him unusual strength over the budget process, ultimately has the authority to decide whether to release the money.

Some of the money for legislative priorities and education funding came from a House-initiated $16 million cut from the budget for Maryland Technology Development Corporation, or TEDCO, after a damning audit report in February concluded that members of a committee deciding grants from the Maryland Venture Fund had awarded money to firms they were connected with and that funding had gone to entities not primarily located in the state.

While the Senate had initially approved a smaller cut, budget negotiators decided to go with the larger amount as they searched the spending plan for places to increase education funding.

“TEDCO has had a bad year, and I think they’ve got this next year to show that they’ve got their act together,” said Senate Budget & Taxation Chair Nancy J. King (D-Montgomery).

The budget negotiators also approved a more direct warning to the University System of Maryland chancellor’s office after changing budget language that would have cut $1 million from the chancellor’s budget and restricted an additional $200,000.

The conference committee lowered the amount of money cut from the budget to $642,600 – the same amount as Chancellor Robert Caret’s salary – and conditioned the $200,000 restriction on receiving a report about any outside income received by the chancellor since 2017, including the source of the income.

When asked if budget negotiators specifically targeted the chancellor’s salary, Sen. Bill Ferguson (D-Baltimore City), the Budget and Taxation vice chair who introduced the cut in the Senate earlier this month, responded: “I don’t think it was a coincidence.”

Caret has come under scrutiny in Annapolis after the Associated Press revealed earlier this month that Caret had sent an email in 2017 to officials at other universities promoting university-branded bracelets produced by the Pandora jewelry company, which has its North and South American headquarters in Baltimore.

The email – initially thought to be the product of a hack by at least one person who received it – prompted ethics questions from Caret’s office chief of staff, who later received an unsatisfactory job evaluation that was later rescinded. Many of facts surrounding the email were put forward in an anonymous letter sent to lawmakers last month.

Ferguson said he was troubled by retaliation against the employee and differences between the explanations offered to lawmakers by the chancellor’s office and the timeline of events pieced together by the letter and other documents. Lawmakers also remain concerned about transparency at the chancellor’s office and the University System of Maryland Board of Regents after the death of University of Maryland football player Jordan McNair after a practice last year.

The amount of the cut is essentially symbolic and does not force any decision by the university system regarding the chancellor’s employment or salary, which are negotiated by contract.

“They will have to have some conversations about how to absorb the cut,” Ferguson said.

Budget negotiators also settled on funding for the Broadening Options and Opportunities for Students Today (BOOST) Program, which provides funding for low-income students to attend private schools. The compromise budget will include $7.5 million for the program, less than the $10 million sought by Gov. Lawrence J. Hogan Jr. (R). The House Appropriations Committee had sought to limit future enrollment in the program, while senators kept it in place.

The conference committee also approved more robust anti-discrimination language for any schools that offer BOOST scholarships, including a clawback provision that would allow the state to recover money that went to schools found to discriminate in student admissions. In previous budgets, the state could recover funding from previous years; this year’s budget language includes only a one-year funding clawback, but maintains that a school that violates anti-discrimination language won’t be able to participate for two years.

Budget negotiators also restored a $300,000 allocation to the Maryland School Safety Line, a Hogan administration priority that allows people to anonymously report threats to the safety or well-being of students, as well as other concerns within school systems.

A 3 percent raise for state employees remains in the budget, though the conference committee decided to use a smaller portion of the Revenue Volatility Fund for employee salary adjustments, which would give a 2 percent additional cost-of-living boost to state employees whose unions did not reach a collective bargaining agreement with the governor last fall.

The compromise budget plan includes a $117 million general fund balance and a $1 billion-plus balance in the state’s Rainy Day Fund.

House Appropriations Chair Maggie L. McIntosh (D-Baltimore City) said the compromise spending plan provides a good start for the Kirwan Commission recommendations and includes full funding for public education and state government offices.

When the House passed its budget plan earlier this month, McIntosh called it a great budget for the state’s children.

“It still is,” she said as budget negotiations wrapped up Monday evening.

Negotiators will meet one final time this week to sign paperwork moving the compromise plan to the full Legislature, which could vote as early as Wednesday.

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Editor’s Note: This story was updated to correct the provisions of the BOOST funding clawback.

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