Kirwan Tax Hikes Have Arrived in Montgomery County

Carol Park Jun 15, 2023

Two big myths are at the heart of the Blueprint for Maryland's Future (also known as "Kirwan") education reform plan: 1) It can be implemented without significantly raising taxes; 2) It can happen without imposing heavy financial burden on Maryland’s local jurisdictions. This year, Montgomery County put the lie to both those myths.

 

In late May, the Montgomery County Council approved a final $6.7 billion fiscal 2024 budget with a 4.7% property tax increase. Although smaller than the 10% tax hike initially proposed by Executive Elrich, the 4.7% local increase is a large additional burden on residents of one of the most heavily taxed states in the country.

 

Montgomery County’s latest tax hike is designed to fund the county’s share of the upcoming Kirwan plan implementation costs such as teacher salary increases and expansion of pre-kindergarten programs. To put things into perspective, Montgomery County devoted $3.2 billion, or nearly half its FY 2024 operating budget, to fund schools. That’s an increase of about 8.5% over last year’s allocation and the largest funding hike to the Montgomery County Public Schools since the Great Recession.

 

This year, Montgomery County was the only one in Maryland to adopt a property tax increase. However, the Montgomery County example demonstrates that such Kirwan-related tax hikes are inevitable in the near future for the other Maryland counties, many of which are strapped for cash.

 

Experts warned as early as 2019 that the Kirwan costs would be too large to be borne by most counties. Even though the bulk of Kirwan’s cost will come from the state, about a third of the burden eventually will have to come from the counties.

 

As noted by the Baltimore Sun, the jurisdictions whose children rank near the bottom of the state’s academic assessment tests, such as Prince George’s county and Baltimore City, are the least likely to be able to afford their share of the hefty Kirwan price tag.

 

The Kirwan plan is estimated to cost $32 billion over the next decade. The tax increases needed to cover such enormous costs, both at the state and local level, will continue Maryland’s notorious legacy of high spending and poor student outcomes.

 

For instance, Executive Elrich pointed out that Montgomery needs to spend more on schools because the county’s per pupil spending has not increased since 2010. This epitomizes the misguided notion at the center of Maryland’s education policy that more dollars is the solution to underperforming schools.

 

Recognizing this disconnect is especially pertinent for financially struggling jurisdictions like Baltimore City, which spends $21,606 per pupil, making its school system the fourth best-funded in America. Nevertheless, recently released test results showed 93% of the city’s third- through eighth-graders failed math.

 

Another myth is that the Kirwan plan can be funded without compromising the quality of other services. It just isn’t possible, even with the imminent tax hikes, that funds for other key services won’t be shifted to make room for the Kirwan budget. That deterioration in the quality of other essential services will lower those jurisdiction’s attractiveness as places to live and do business.

 

The consequences would be especially devastating for jurisdictions like Baltimore City and Prince George’s County, which already have recorded the largest population declines in the region since 2021.

 

Montgomery County’s property tax hike decision sends an ominous warning to other struggling jurisdictions with hopes the Kirwan plan will magically fix all their underperforming schools.  

 

It is time to seriously re-examine the Kirwan plan’s affordability from the perspective of already hard-pressed local jurisdictions. What’s needed are other cost effective reform solutions specifically targeted at improving student outcomes rather than simply pouring more money into an already broken system.