$38 Million Schools Cut Proposed for Md. Counties

In response to Maryland's worsening fiscal outlook, Gov. Martin O'Malley's budget secretary has recommended cutting almost $38 million this year from an initiative that sends additional money to Montgomery, Prince George's and other counties where the cost of providing public education is more expensive.

The recommendation would leave school systems with only half the funding they were expecting this year from the program, which has been a high priority for Washington area lawmakers, and jeopardizes its planned expansion next fiscal year.

School officials said the move would compound existing budget problems. This year's loss would be about $9 million for Montgomery and almost $12 million for Prince George's.

William R. Hite Jr., interim schools superintendent in Prince George's, said the school system had trimmed its budget earlier in the year, putting a freeze on hires and discretionary school spending in anticipation of further cuts from the state.

Steve Simon, a spokesman from Montgomery County schools, said in an e-mailed statement that the loss of funds would be "another devastating blow."

"We're already working to save $20 million this year, based on the county deficit," Simon said.

Other Washington area counties that receive the funding include Anne Arundel, Calvert, Charles, Frederick, Howard and St. Mary's.

In a letter to O'Malley (D) dated Thursday that was obtained by The Washington Post, T. Eloise Foster, the governor's budget secretary, said, "While I understand your reluctance to reduce education aid, I believe this adjustment . . . is necessary in order for the State to resolve our FY2009 budget shortfall."

In her letter, Foster notes that the funding cut would amount to less than 1 percent of the $5.3 billion the state is investing in K-12 education this year.

Administration officials learned this week that a projected shortfall for the current fiscal year, which ends in June, has doubled to more than $400 million. Legislative analysts say the shortfall next year could reach $1.9 billion, given the slowdown in sales and income tax collections that has accompanied the national recession.

O'Malley spokesman Rick Abbruzzese said the governor has not made a final decision on whether to cut funding for the Geographic Cost of Education Index this year. But, he said: "Everything is on the table, given the significant shortfall we are faced with."

Del. Brian J. Feldman (D-Montgomery), chairman of his county's delegation in Annapolis, said it was hard to judge the necessity of the proposal before seeing the governor's other cuts.

"My initial reaction is that this, of course, is problematic with respect to Montgomery County," Feldman said. "We all understand that we're in a uniquely difficult time, and sacrifices need to be made by everyone. The key is that one county does not get disproportionately hurt."

The governor is expected to propose a package of about $400 million in mid-year spending cuts next month to the Board of Public Works, a three-member panel authorized to cut the budget when the legislature is not in session.

O'Malley has announced that he will require more than 67,000 state employees to take unpaid leave of two to five days, depending on salary level, to help relieve pressure on this year's budget. That step is expected to save at least $34 million.

The Geographic Cost of Education Index was part of Maryland's landmark 2002 Thornton law, which sought to ensure adequate funding for all of the state's school districts. Unlike other components of Thornton, the geographic component has been considered discretionary and was not funded during the term of O'Malley's Republican predecessor, Robert L. Ehrlich Jr.

O'Malley pledged to fund the initiative during his 2006 campaign but did not include money in his first-year budget, citing other fiscal challenges. Last year, he and lawmakers agreed to phase in funding over two years.

Enough money to fund 60 percent of the program was included in the budget adopted by the legislature in April. Foster's proposal would reduce that to 30 percent for the current fiscal year, which began in July. The cost of fully funding it next year would be about $125 million, according to legislative analysts.