Friday, March 26, 2010

How the Counties Spend Your Money, Part Five

Today, we examine public school spending and look at Montgomery County’s per capita budget in detail.

In FY 2009, Maryland’s twenty-four public school districts received a combined $11.2 billion. Of that sum, $5.3 billion came from state aid, $529 million came from federal aid and $5.4 billion came from county taxes. Aid to public schools is the single biggest line item in the state’s budget and accounts for over a third of its general fund expenditures. But school aid is not distributed evenly. Instead, like almost all other forms of state aid, school aid is apportioned based on a wealth formula that favors jurisdictions with lower property values and lower incomes over counties that perform better on those measures. That has real consequences.

Here is total and per capita school spending by source for each county.

In per capita terms, the leaders on local school spending are Howard ($1,654), Montgomery ($1,592), Worcester ($1,474) and Calvert ($1,135). The lowest spender of local money on schools is Baltimore City ($326). But the city makes that up by being the biggest beneficiary of state aid ($1,417 per capita) and federal aid ($178). In terms of per capita funding from all sources, Baltimore City ($1,922) is very close to the state average ($1,994).

The wealth formula creates enormous disparities on the local burden of funding public schools. In FY 2009, here are the percentages of public school district budgets paid by state and federal aid.

On one hand some jurisdictions have overwhelming percentages of their school budgets covered by the state and federal governments, including Baltimore City (83%), Caroline County (80%), Allegany County (78%), Somerset County (76%) and Wicomico County (72%). All of these jurisdictions contribute much less than the state per capita average in local funding to their schools. On the other hand, other jurisdictions largely go it alone, such as Worcester County (28%), Montgomery County (28%), Talbot County (31%) and Howard County (36%). Taxpayers in Worcester, Montgomery and Howard pay very large amounts to maintain their own schools as well as the schools everywhere else in the state.

And what of Montgomery County? The county’s colossal FY 2011 budget deficit is prompting questions by many elected officials and staffers as to where the county’s spending is going and whether it is justified. Here is how Montgomery’s per capita spending compared to twenty other counties around the state for which we have data in FY 2009.

On a per capita basis, Montgomery spends more than the vast majority of other counties on pretty much everything. The only major items in which it is middle-of-the-pack or lower are the Board of Elections (on which it ranked 11th), economic development (11th) and the State’s Attorney office (19th). But in terms of total spending, the county ranks high for one big reason and one less important reason.

The big reason is schools. As we have seen above, Montgomery is a big-time loser in school aid due to the wealth formula. The county has chosen to overcome that handicap through massive local spending on its schools. The less important reason is the county’s health and human services spending. As we saw in Part Three, Montgomery spends almost seven times as much per person on health and human services as does Prince George’s County. Montgomery is effectively subsidizing Prince George’s on that measure by paying for the needs of the latter county’s poor.

If Montgomery wants to get more state aid, there is a quick way to do it: get poor – the faster, the better. Given the calamitous state of the county’s economy, that option is not completely out of the question.