In a county boardroom 4 miles away from the Delaware border, the five members of the Cecil County Board of Education grew increasingly worried about the state of the school system’s finances.
Federal pandemic-relief dollars used to prop up the budget the past three years are gone. Inflation and health care costs have ballooned. Starting salaries for teachers need to be raised to $60,000 by 2026.
Board members became frustrated in an April work group as Superintendent Jeffrey Lawson explained the stark reality — the small district doesn’t have enough money to keep normal operations running. Teachers need to be laid off to cover a $9 million budget gap, despite receiving $142 million in restricted state funds.
“Try telling that to a 13-year-old,” a weary Lawson told board members of the cost constraints.
The Blueprint for Maryland’s Future , the state’s education reform plan, invests billions of dollars into public education over a decade, but that money is designated for very specific programs. School boards are left paying for other services with the remaining flexible funds and banking on county governments to approve huge requests above the legal funding requirement.
Not all counties can afford to cover the gaps. Programs are cut and positions eliminated to save money, resulting in larger class sizes and involuntary teacher transfers.
Many educators, Lawson included, and local officials remain supportive of the Blueprint’s sweeping goals to raise teacher salaries , offer public prekindergarten and cover tuition for students dually enrolled in college courses, among other programs.
But the state passed the Blueprint law before the coronavirus pandemic upended the labor market and economy. And there’s no dedicated revenue source to pay for the plan past 2027, a serious problem that threatens to downgrade Maryland’s bond rating.
With the 2025 fiscal year beginning July 1, this budget season’s intense financial pressure boiled over into political tension in both wealthy and modest counties. Lawson and Cecil County Executive Danielle Hornberger became heated over who was to blame — the county for not allocating more money or the school board for not budgeting better.
Montgomery County has 10 times the number of students as Cecil and is spending $3.3 billion on schools in fiscal year 2025. Yet Montgomery, the state’s largest and wealthiest district, is making cuts to fill a $30 million deficit, sparking community backlash.
School funding formulas
School districts are financed by federal grants and state and local taxes, primarily income and property taxes that vary widely across the state.
The Blueprint is fundamentally a funding formula change that addresses inequities, said Cheryl Bost, president of the Maryland State Education Association.
Districts have long budgeted on a per-pupil basis, in which a portion of the money follows the student to their school and the rest is used by administration to run the district. The money is divided by how many students are enrolled.
The Blueprint pumps significantly more money into per-pupil expenditures, starting at $8,310 per student and growing to $12,365 per student by 2032. Some students are assigned additional dollars, such as those who have special needs, are multilingual or live below the poverty line.
School districts are grappling with a Blueprint change that requires 75% of that per-pupil amount to follow the student to their school for a specific purpose. The other 25% — a smaller amount than districts are used to — can be used for other school services that end up on the chopping block in tight fiscal years.
“That 75% following the student is the core principle in equity,” Bost said. “The schools servicing those students are getting the additional funds needed to educate a more challenging population.”
The Baltimore City Public School System has budgeted on an individual school basis for a decade, allowing for a smooth process with an influx in state funding. City schools with declining enrollment, however, will struggle to pay teachers a higher salary and could potentially close, city officials wrote in their Blueprint plans.
Still, in many cases, the record school funds are not enough to both support new programs and keep existing ones. Costs such as transportation, world languages, employee benefits, and art and music programs are not covered by the Blueprint. In Harford County, for example, the school board received $1 million in local funding to transport special education students, but rising transportation costs bring the bill to nearly $11 million.
“I think they’re all notable and worthy goals and the right areas to focus on,” Lawson said of the Blueprint on Wednesday. “But at the same time, I don’t think the community is prepared to see that done necessarily at the expense of the other traditional services that they’ve received.”
State and local legislators will have to raise taxes or make cuts to keep up with the Blueprint’s timeline.
‘A huge deal’
Maryland spent a total of $10.1 billion on education for fiscal year 2025. In two years, the state will have to pay for the Blueprint with its general fund if lawmakers don’t find another revenue source, pushing the projected budget deficit to $3.7 billion by 2029.
Fiscal watchdogs are paying attention.
Moody’s, a credit rating agency, knocked Maryland’s credit outlook from stable to negative in May, a flashing yellow light that action is needed. One of the state’s biggest liabilities is the Blueprint.
State lawmakers made tweaks to the Blueprint this General Assembly session without designating a revenue source.
Moody’s “looked at that and said, ‘We’re going to issue a negative outlook because you knew about it, and you didn’t really do anything to address it in this session,’” said Kevin Kinnally, legislative director for the Maryland Association of Counties. An outlook is the direction the agency will likely take during the next rating term.
Maryland has the highest rating from all three bond agencies. A rating downgrade would make it harder for the state to borrow money and sell bonds.
“It would be a huge deal if Moody’s actually downgraded the state,” Kinnally said. “That would really be a blow.”
Local governments can raise taxes to cover budget shortfalls. But half of all counties have maxed out their income tax rate, Kinnally said. That leaves regressive property taxes as one of few options.
Montgomery County last year raised property taxes by 4.7%, an “inadequate” hike that’s contributed to the school district’s current hole, said Jennifer Martin, president of the county’s teachers union. The county previously relied on one-time funds, including federal pandemic-relief money, that are now drained, she said. The district eliminated a 700-student virtual academy to save $5 million and postponed expanding full-day prekindergarten for another year.
State education officials have doubled down on the Blueprint’s mission to transform public education, urging school boards to be creative rather than adapt the Blueprint to what they’ve always done.
Teacher advocates say part of the problem is school boards dragging their feet to meet the Blueprint’s nearing deadlines, which they’ve known about for years.
“The Blueprint legislation has taken a pretty good beating from local district leaderships. It’s really become the scapegoat for no reason,” said Benjamin Schmitt, president of the Howard County teachers union.
Howard County’s council approved a $1.5 billion spending plan that’s $47 million over the legal requirement. Music and academic programs were saved with $5 million in one-time funds. “To me, it’s a lack of preparation all around,” Schmitt said.
For her budget this year, Baltimore County Superintendent Myriam Rogers and her team found places to save money by tediously matching every budget item to a revenue source.
It’s hard to be creative when there’s not a lot of fat to trim, Lawson said Wednesday. Seventy school positions are being eliminated in Cecil County, including 41 teachers. The district used $6 million in an unassigned fund balance to keep the sports, music, and gifted and talented programs, plus school librarians.
Despite Cecil County’s dramatic budget process, Lawson said he’s more optimistic about the Blueprint than ever. He’s on a superintendent work group assembled by state Superintendent Carey Wright to mediate frayed relationships between school systems and counties, and solve rollout issues moving forward.
“It’s going to cost money. I think too many people are shy about coming out and saying that,” Lawson said. “If you want these kinds of things for the students in Maryland, it will cost money.”
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