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Here's Why a Maryland School Finance Overhaul Could Prove Groundbreaking

Several states this year are on the brink of overhauling their school funding formulas, the result of a thriving economy, single-party control of state legislatures, middling academic outcomes, and growing disparities between district spending.

But what's happening in Maryland is pretty unique: The state's legislature is attempting to pay for a massive funding increase with an unusally new revenue stream, and wants to add another layer of government to oversee district spending.

The Kirwan Commission, led by former University of Maryland chancellor William English "Brit" Kirwan, has recommended that the state spend $2.3 billion more each year by 2030 on its K-12 school system, which currently gets around $7 billion a year. But in order to get that amount of money past fiscally conservative Gov. Larry Hogan, a Republican, leaders of the state's Democratically controlled legislature have promised not to raise property, sales, or income taxes. 

Last month, legislators introduced a novel idea: tax online ad sales. The legislature predicts that they would be able to bring in more than $100 million a year. Maryland's proposal has drawn a significant amount of attention from other states looking for new ways to tap into new industries to fund fiscally-strapped public schools. 

"I figure it's better the Russian trolls help fund education than property tax, or income tax, or sales tax," former state Senate President Thomas Mike Miller Jr., a Democrat, told the Washington Post last month. 

The state also plans under the Kirwan legislation to beef up its school spending oversight. The last time Maryland overhauled its funding formula, in 2002, it boosted spending to more than $15,000 a student, making it the 14th-highest spending amount in the nation. Most of that was targeted toward districts with high numbers of low-income students and English-language learners and yet, the state's scores on the National Assessment of Educational Progress barely budged. That's enraged state politicians who have accused district administrators of not spending state money on the students it was intended for.

If the Kirwan Commission recommendation is enacted,  Maryland would create a board of seven appointed K-12 experts with a staff of 15 to assure that state money is spent as intended. This proposal has drawn deep opposition from many local school board members who argue district administrators already have to navigate a web of oversight and that another state body overseeing school finance would only confuse the public.

"MABE strongly opposes the adoption of the recommendation for a new governance and compliance body to oversee implementation of the Commission's recommendations and subsequent legislation," the state's school board association said in a statement. "Such an independent oversight body is neither necessary nor appropriate to coordinate, monitor, and evaluate implementation of the Commission's recommendations as these functions are already are within the purview of the Maryland State Department of Education (MSDE) and the State Board."

Hogan recently appointed Richard Henry as the state's first inspector general for education. Henry currently heads up another state program that assures that local school districts comply with state regulations. State inspectors general rarely get to have any say on how billions of state K-12 dollars are spent, something that's frustrated other state officials as they pour more and more money into district coffers. West Virginia's state auditor has launched a campaign for that state's department of education to open its fiscal books.

"For five years, our administration has been working hard to root out corruption, wrongdoing, and the mismanagement of state tax dollars by local school systems," Hogan said in a statement announcing Henry's appointment. "With the appointment of the first inspector general for education in state history, we are reaffirming our commitment to providing more accountability for parents, teachers, and taxpayers and better results for our children."

The state's Democrats have veto-proof control of the state legislature but the Kirwan legislation faces several hurdles, namely finding enough tax revenue to pay for its cost.

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