Casino Politics and Education Funding

Casino Politics and Education Funding

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Amidst all the hoopla about Maryland being the Number 1 state for public education in the United States, teachers and students are experiencing a serious squeeze. Jay Gillen, veteran math teacher at Heritage High reports, that the students he had for geometry last year are now in groups that are 40% larger this year for Algebra II. "Class sizes … go higher and higher, while non-core courses become fewer," Gillen reports.

Bill Bleich, English and Drama teacher at Baltimore Polytechnic Institute said, "when the federal stimulus money ran out, we lost 9-and-a-half teaching positions for the subsequent year."

At Poly, the B-courses (less advanced curriculum) took "the entire brunt of the cuts" while at Heritage High AP courses were eliminated. Both types of decisions undermine educational excellence.

All across Maryland, drama and art programs and after-school activities are being down-sized and closed. In Prince George’s County, each instructional employee had 12.2 percent more students in the 2011-12 school year than in 2007-8.[i] The statewide ratio increased 3.6 percent. 

Last year, Montgomery County biochemist-turned-chemistry teacher, Virginia Azuree, told her story to the Maryland Budget and Tax Policy Institute.[ii] In one class, 33 students were jammed into a lab that had 28 work stations. She admitted ruefully having trouble remembering the names and progress of some of her students. "Despite the fact that I thought I was doing good job handling such a large class, I lost track of [them]." And, says Azurée, "Since that day I’ve come to realize there were … students who had started the year strong but were beginning to flounder."

The source of the pain experienced in public schools lies in the special session of the General Assembly in October 2007. In the run-up to the global economic crisis, Maryland was already experiencing a depressed real estate market and falling State revenues.

During that session, casino gambling was enacted, the sales tax rose from five to six percent, State income taxes became more progressive (though the surcharge on the highest earners was temporary), tobacco and corporate income taxes were boosted, various programs were reduced by about $200 million per year while others (universities, subsidized health insurance, and transportation) were increased.

Most of the State’s proceeds from the casinos were to be put in an Education Trust Fund dedicated to supporting the public schools. It was projected that the ETF would eventually receive about $600 million annually.

At the same time, however, the Governor and the legislature weakened the formula that mandates State aid for local public schools by eliminating the adjustment for inflation. This is now costing the 24 local school boards $718 million dollars each year in lost State aid – an average reduction of nearly $850 per student per year.

The Thornton Gap

Difference in State funding between 2013 actual amounts and full funding under original Thornton formula for a classroom of 25 students. Lower-wealth jurisdictions lose more aid for each student.

To understand how such a huge impact could occur, it’s necessary to understand the basic funding formula that Maryland adopted 11 years ago. At that time, a commission chaired by Dr. Alvin Thornton reported on its attempt to define adequate funding for schools to achieve the State’s learning goals for all students. Through a variety of methods, it was estimated to cost about $10,000 per pupil, but that cost depended on the numbers of students in poverty or with special needs.

According to the 2002 Commission on Education Finance, Equity and Excellence report, "the Commission found that the school systems furthest from the [budgetary] per pupil adequacy targets derived from the adequacy studies were those with low wealth and/or high proportions of special needs students. The Commission also found that school systems with the largest differences between adequate funding and [current] funding generally had the lowest test scores…."

To provide adequate and equitable funding, the Commission said the State funding formula would have to be increased by $1.1 billion per year, provide substantially more aid to lower-wealth jurisdictions, and account for the numbers of students from low-income households or with special needs.

As the 2002 session of the General Assembly unfolded, education advocates’ voices grew louder and louder. While Governor Glendening hesitated, the Maryland Education Coalition, Advocates for Children and Youth, the ACLU, the teachers’ union, the school boards, school administrators, and others kept raising the pressure. In the end, the Bridge to Excellence in Education bill passed and was signed into law, incorporating what is now known as the "Thornton formula."

The Thornton formula added an allowance for students learning English as a second language. It was slated to increase state aid by $1.3 billion over a five-year period. Because of the way it was embedded in law, the Governor would be forced to budget for the increases unless he could muster a majority in both legislative chambers to weaken the formula.

In a compromise designed to garner votes from Montgomery County, there was a component added to give slightly greater aid to counties with higher cost of living. This formula, now known as the Geographic Cost of Education Index, was added as a non-mandated component of the formula.

Between fiscal years 2004 and 2008, the Thornton formula was fully funded. As a result, funding disparities between wealthy and poorer jurisdictions across the State were substantially reduced. Total State aid (not counting federal aid that passes through the State budget to local school systems) rose from $3.2 billion in fiscal 2003 to $5.2 billion in fiscal 2008. The $2 billion increase includes the Thornton increase plus the normal inflation allowances over the five-year phase-in period.

When the global economic crisis hit with a vengeance in the fall of 2008 (State fiscal year 2009), the revenue increases and program cuts that had been taken the previous fall proved inadequate. Instead, the structural State budget deficit rose to $2 billion.

Funds from the casinos have so far been less than half of what was projected. 

In addition, the only discernible effect from casino funds in the Education Trust Fund has been to help with funding the Geographic Cost of Education Index (GCEI). That is because other State aid to education is mandated. Therefore, when funds from the ETF go towards public schools, State General Funds are removed. This process is called "supplantation."

Furthermore, although O’Malley has fully funded the GCEI since fiscal year 2010, a new governor would be free to eliminate funding. In that case, the 13 higher-cost school districts would lose a combined $130 million.

When Governor O’Malley says, "we continue to invest record funding into our schools"[iii]   he speaks the literal truth. Total State funding has continued to rise because of rising enrollment (remember, the Thornton formula mandates specified funding per pupil) and because of poor performance of the State’s pension system (both in terms of the State’s contribution levels and investment management over the past decade). That does not negate two stark facts:

  1. Spending power for classroom instruction is down $850 per student.
  2. Money from gambling is spent on education but it mostly supplants other revenue.    

It is true that Maryland has done better by public education than most other states; nevertheless the public has a different view as indicated by results published in the Goucher College poll on October 29, 2012.[iv] Six hundred sixty-seven (667) respondents were asked whether they thought Maryland state government spends "too little, about the right amount, or too much" on public schools. Sixty-five (65) percent said "too little," 21 percent said, "about right," and eight percent said, "too much."

Admittedly, some of the response may have been be fed by the casino debate in which some politicians and the casinos themselves claimed that gambling revenues to the State would increase education funding while analysts and journalists pointed out that nearly all the gambling revenues had merely supplanted general funds. It is also reasonable to surmise that voters are aware that teaching positions are being reduced, class sizes are up, and programs are being cut or eliminated. 

The Maryland Education Coalition has sparked the introduction of House Bill 1474 and its companion Senate Bill 958. These bills would address current problems in education funding in three ways:

  • The original inflation factor in the Thornton formula would be restored starting in fiscal year 2015.
  • The Geographic Cost of Education Index (GCEI) would be mandated in statute, assuring that higher-cost jurisdictions receive a fair share of State aid.
  • The State would adopt a goal of funding school construction aid at $350 million a year, an amount that would equal the purchasing power of the $250 million goal first realized in 2006.

As of this writing, the bill is awaiting a vote in the House Ways and Means Committee. To send a message supporting the legislation, click here.


Charlie Cooper

Charlie Cooper is retired from a 38-year career in child protection and child health. He has written occasional op-ed columns for the Baltimore Sun. He is an activist with interests in money in politics, finance and banking, youth development, and peace. He serves as Secretary of the Maryland Education Coalition and Co-Convenor of Get Money Out – Maryland.  He can be reached at[at]