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School Finance News Roundup from Maryland, Washington State, and More

As I noted in my story previewing the 2015 state legislative sessions, school finance will continue to be an issue occupying (and in some cases bedeviling) lawmakers. Here are a few recent developments that emphasize the extent to which K-12 budgets will create key education policy battles in several states:

• One of the most eye-catching results from the 2014 elections was in Maryland, where Republican Larry Hogan upset Democratic Lt. Gov. Anthony Brown in November. During his campaign, Hogan heavily criticized Democratic Gov. Martin O'Malley's approach to taxes and fiscal policy and promised a more-restrained state government. 

Now Hogan's desire to trim Maryland spending has been given additional urgency—the state is projecting a revenue shortfall of $1.2 billion over the next 18 months. This gap will lead to significant budget cuts for both the current fiscal year, fiscal 2015, and fiscal 2016. The Baltimore Sun reported that the $1.2 billion projection was about $300 million higher than a budget projection released by the state last month.

Hogan's election and the updated revenue forecast will potentially lead to a big battle in 2015 between him and the Democrats who control the legislature and have significantly ramped up spending on K-12 in recent years. Hogan has indicated a willingness to change the state's approach to K-12 spending, but Democratic Sen. Rich Madaleno, a member of the state Senate's budget committee, said Dec. 15 that "we have to find a way to make the sacrifices" to maintain the state's spending on schools, according to a CBS Baltimore.

From fiscal 2008 to fiscal 2014, Maryland increased per-pupil spending by 6.1 percent after adjusting for inflation, the fourth-highest increase of any state during that period, according to a report earlier this year from the Washington-based Center on Budget and Policy Priorities. 

• On the opposite end of the budget spectrum, Democratic Gov. Jay Inslee of Washington state has proposed a $2.3 billion increase for public schools in the state's biennial 2015-17 budget. 

More than half of that figure, $1.3 billion, would be used to reduce class sizes in the early grades, pay for full-day kindergarten statewide, and cover additional costs at the district level. If this passes muster with lawmakers, it could help the state satisfy two different demands—one from the voters, who approved a ballot initiative last month requiring the state to reduce class sizes, and one from the state Supreme Court, which earlier this year found the state in contempt for failing to increase spending enough to satisfy the McCleary v. Washington court ruling from 2012, and promising further sanctions if lawmakers failed to dramatically increase K-12 spending for 2015-17.

Among other initiatives, Inslee is proposing an expansion to early education for low-income children by creating an additional 6,300 slots for them in the state preschool program. This would cost the state $156 million. He also wants to earmark $30 million to provide additional professional support and training for teachers and principals, including mentoring for 7,200 first-year teachers.

One issue Inslee didn't mention? How he will pay for this $2.3 billion increase. Inslee plans to announce that on Dec. 18. Remember, Washington state has no income or capital gains taxes.

• Although it's not a state revenue gap as in Maryland, Mississippi has its own K-12 budget issue: A chasm between what the state education spending formula requires lawmakers to spend, and what's actually spent.

The Associated Press reported that this gap between state promises in the Mississippi Adequate Education Program and actual state aid now stands at $1.5 billion since 2008. Reporter Jeff Amy takes a look at how schools in the Magnolia State are struggling to cope with the funding shortfall.

Since 2008, according to Amy, 80 of the state's 146 districts have raised property taxes to compensate for lagging state aid, but some districts are prohibited from raising such taxes. Even as districts raised property taxes by a combined $232 million from 2008 to 2013, the state shed 6 percent of its teaching workforce over the same time period. State officials have questioned the spending formula's structure for some time, saying that the way it distributes money doesn't leave state lawmakers with much oversight.

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