Friday, January 19, 2007

Passing the Buck Back to MoCo?

Is the legislature on the verge of demanding that Maryland's counties pony up more dough for the schools? The Gazette reports that at least one key legislator thinks so:

Local school aid in some Maryland counties is lagging behind their increases in wealth, prompting some legislators to call on local governments to ratchet up their own spending in education.

‘‘The issue of ‘Have they kept up?’ is a very valid issue to raise,” said Del. John L. Bohanan, who chairs the House Education and Economic Development Subcommittee.

Over the past five years, wealth per pupil has grown faster than local school aid per pupil in all but four counties: Harford, Howard, Prince George’s and Charles counties. Local wealth is calculated by adding the net taxable income of county residents and the assessable property tax base in the county. Divide that by the number of K-12 students for the local wealth per student.

This argument strikes me as a red herring. The way wealth is calculated includes growth in the value of property as well as in income. The ability of counties to get more money from their own resources does not grow nearly as fast as property assessments. Residents need income in order to pay taxes and income has not risen nearly as fast as property assessments. Indeed, new homeowners may be even more strapped because they had to plunk down more money to buy a home. Commercial land owners are only in better shape to the extent that they can extract more income from their properties. However, despite rising rents, rents have not risen nearly as fast as property assessments. Finally, the property boom is over, so one can expect that assessments will no longer increase by much over the next few years.

Another hole in the argument vis-a-vis MoCo is that this County already spend more per pupil of local tax dollars than any other jurisdiction in the State. While the state average across the 24 jurisdictions is $5,964 per student, Montgomery spends $10,244 per student. This commitment to education is not merely a function of the County's wealth. Although Howard residents are now wealthier on average than those in Montgomery, Howard spends $8,177 per pupil. Prince George's actually spends less than the state average despite increasing spending at a higher rate than Montgomery; another example of why focusing solely on rates of increase is problematic.

Some of the difference between the Howard and Montgomery is undoubtedly due to higher costs in Montgomery. However, this is exactly the sort of problem which the geographical component of Thornton, funded by the state, was supposed to address. Montgomery's commitment to its schools has served this County well. We should maintain it in the future. However, does the state really want to make the case that MoCo has been unwilling in the past to pay its fair share for education?