An eleventh-hour amendment this year to a much-disputed Maryland education finance law could jeopardize as much as $2.6 billion in local funding that school systems have traditionally counted on, a teachers union contended in a report Monday.

The report from the Maryland State Education Association warns of “slashed education funding,” growing class sizes, and deep cuts to programs and professional development. It calls for state lawmakers to require that local funding levels for schools remain steady.

“As counties struggle to preserve county services with shrinking budgets, the law’s weaknesses become ripe for further exploitation,” the report says.

But one lawmaker who supported the amendment said the report’s warnings are exaggerated. “These predictions of gloom and doom just would never come true,” said state Sen. Richard S. Madaleno Jr. (D-Montgomery).

The report is the latest sign that the “maintenance of effort” education law will remain contentious in the next legislative session.

The law, enacted in 1984, requires local governments to provide public schools a constant level of per-pupil funding over time as a condition of increasing state aid. Last spring’s amendment specified that the minimum per-pupil funding level is based on a stripped-down formula that does not take into account programs such as special education or summer school — roughly half the $5.3 billion that local governments are expected to provide public schools this year.

Federal education funding is tied to similar conditions. The intent is to ensure additional funding is spent for additional services instead of serving as a substitute for local funding.

While local governments are unlikely to make drastic cuts, teachers unions and school boards are afraid the law gives local officials too much flexibility. And school officials have far less leverage to fight for tight resources as they head into difficult budget negotiations.

High education funding has helped Maryland schools earn a No. 1 ranking three straight years from Education Week — an accolade elected officials are eager to protect.

But the details of Maryland’s maintenance of effort law have proved unwieldy in tough budget times. Its authors never anticipated the effect of a bursting housing bubble or articulated a logical process for working through it.

The debate has largely played out in Montgomery County. The county’s nationally recognized schools have long been a fiscal priority, and the County Council exceeded minimum spending levels by hundreds of millions of dollars over the past decade. But when the budget outlook worsened, the council said it couldn’t maintain the same level of investment.

“The county government was hurt by the fact that we were doing over and above what we were required to do,” said council President Valerie Ervin (D-Silver Spring), a former school board member.

The council, with support from the county Board of Education, has applied for waivers from the law for each of the past three years. The request was declined by the State Board of Education in the first year and granted in the second year. In the third year, the council withdrew the request after the state board issued a ruling that the waiver process was not required by the law. Instead, the council accepted a $26 million penalty, which has been deferred into next year.

The county’s share of per-pupil funding dropped from $11,249 in fiscal 2009 to $9,759 in fiscal 2012. Overall per-pupil spending dropped less dramatically, from $14,127 to $13,607, because state aid increased.

Montgomery school board member Patricia O’Neill (Bethesda-Chevy Chase) said constant funding is necessary to keep up with the needs of the 147,000-
student school system. “We are facing a situation where we have more children from poverty and [with] limited English skills at a time when the county is not living up to their obligations for our students,” she said.

The Montgomery Board of Education is calling for the law to be “restored” so that the total amount of per-pupil funding is legally required to hold steady.

The board is seeking a mandated waiver process for local governments that want to reduce funding, and a penalty for those that do not meet their obligations. Currently, the penalty for underfunding local education is levied on schools through cuts in state funding.

In general, county officials want flexibility in the law to account for economic volatility; some would like the state Board of Education removed from oversight of waivers.

Madaleno said changes are needed to restore “common sense” to the law and encourage collaboration. But he said the amendment he supported is unlikely to cause dramatic cuts.

“No local government is ever going to go down to the minimum contribution rates; you would have parents with pitchforks and torches in front of the County Council building,” he said.