The Budget

Program Cuts: Money or lack thereof will likely dominate the session. The Governor’s proposed budget for FY 2011 will have some real cuts to address a large budget deficit. The big question is what will be cut that relates to children and families. Once the Governor submits his budget, legislators cannot restore proposed cuts; they only make further cuts. It is an election year, which means that the Governor and legislators will resist revenue increases. The fiscal situation also means that proposed legislation with even a nominal cost is much less likely to pass.

Racial Equity

Youth Arrests and Racial Equity: Minority children in Maryland are doing worse than non-minorities in almost every aspect of their lives. Legislators and advocates are asking the Governor to require state agencies to track racial disparities as part of their bi-weekly StateStat reports, as a first step in creating equal opportunity. One area of concern is the disproportionate arrest of African-American youth. This is a particular problem in schools. Del. Craig Rice is championing legislation to ensure school-based police officers participate in cultural competency training that helps them consider fully alternatives to arresting minority students.

Education

School Funding: K-12 school funding has remained mostly untouched by the state budget crisis, largely because of the requirements of Maryland taking federal stimulus money. Because of the continued deficit, there will be increased pressure to make education cuts in FY 2011. One possible cut is to state funding of teacher retirement pensions; the State currently pays 100 percent of the cost, and the overall cost is escalating. Since pensions are based on salaries, school districts that pay higher salaries or have more experienced teachers, who are paid more, benefit disproportionately from this arrangement. Some transfer of pension responsibility may come out of an overall deal on reducing state aid to local governments to close the budget deficit. The deal might include allowing local governments to reduce financial support for schools below the current “maintenance of efforts” levels, i.e., the amount of money provided the prior year.

Another potential education cut is to the cost of nonpublic placement of disabled children; the State and local districts share costs, and the State has cut back on its portion of funding already and may seek to shift more of the responsibility to local districts. Also, there will be pressure to delay a modification of the Geographic Cost of Education Index, a formula that provides extra funding to school districts with unusually high costs, i.e., Baltimore City, Montgomery County and Prince George’s County.

The bottom line is that school districts are likely to receive less money, through some combination of cuts in state and local funding. Advocates will seek to limit the cuts and to protect programs that serve the most disadvantaged and low-performing students.

Teacher Tenure and Charter Schools: The State Superintendent supports lengthening the period of time needed for teachers to receive tenure, currently set by state law at two years. Teacher tenure rules are a factor for whether a state can win one of the large new federal Race to the Top education grants. Maryland is eligible for $150 million to $250 million. Another barrier to Maryland’s receipt of these federal funds is that Maryland has a weak charter school law: only local school districts can issue a charter, teachers at charter schools must still adhere to local union rules and there is no support for charter school facilities. It is not clear whether the Governor will support lengthening the period for tenure or strengthening the charter law, even though he wants the State to win one of the Race to the Top grants. Regardless, the State can do much to make itself more competitive for the grants by changing policies and practices that do not require legislative action.

School Facilities: Funds for building new schools or repairing old schools may be one of the few areas where the budget situation is not as bleak. A significant emphasis of federal stimulus dollars is on "shovel ready" construction projects. Also, most state funding for school buildings is funded by bonds, and the State is expected to issue more bonds. The process for allocating school construction funds is a combination of politics and need. Plus, school districts that want more state money need to convince local governments to pay a local portion.

Child Welfare

Caseloads: The Governor has largely spared child welfare from budget cuts so far, and he has allowed the Department to fill vacancies in caseworker positions. In the past, hiring freezes increased worker caseloads, which meant that more children stayed in foster care longer, foster parents felt unsupported and dropped out, and children ended up in extremely expensive group homes. In short, the move was penny wise, pound foolish, and the Governor has wisely avoided this action so far.

Services for Families: The numbers of children in foster care has dropped, particularly in group homes. This should mean that there are financial savings. The best way to maintain, and even further reduce, the number of children in foster care is to invest these savings in services for parents and foster parents. These services are now woefully inadequate. If the Governor does not expand family-based services, he risks a high profile instance of repeat child abuse or neglect during an election year.

Alternative Response: The Department of Human of Resources has previously sought authority to not formally investigate abuse or neglect allegations in certain instances, but instead provide services without a finding of abuse or neglect. Legislators have rejected so-called alternative response bills, in part because of insufficient proof that sufficient services existed for families not going through the formal process. As these concerns remain, an alternative response bill may face the same fate as before. Advocates for Children and Youth has supported alternative response, but only if there are sufficient in-home services.

Group Homes: Representatives of the group home industry convinced a committee chair to hold an off-session hearing in which providers aired grievances against the Department, which is seeking to reduce unnecessary use of institutional placements. In a post-hearing editorial, The Baltimore Sun echoed the sentiments of many in saying that the child welfare system existed for children, not group homes. It is unknown whether there will be any attempt to derail the Department’s reform efforts; chances are that such an attempt would fail.

Substance Abuse Treatment: There is some momentum for an increase in the alcohol tax, which is low and has remained unchanged for many years. Advocates want the revenue to pay for increased treatment of substance abuse, which is a contributing factor in 70 percent of child abuse and neglect. In an election year, legislators are unlikely to support a tax increase. If they do, they are likely to use the money to pay for existing services, rather than earmark it for expanded substance abuse treatment.

Juvenile Justice

Juvenile Facilities: The FY 2011 capital budget may include more than $100 million for two juvenile facilities in Baltimore City and Prince George’s County. The need for some facilities in these jurisdictions is not disputed. However, there is significant concern that the Department of Juvenile Services is replicating a failed and expensive model, first developed at the Victor Cullen Center in Frederick County. Victor Cullen has extraordinarily high failure rates and is not following the most effective rehabilitative approach, the Missouri Practice Model. Legislators may seek to delay the expenditure or place restrictions on its use, pending development of a more effective model.

Community Services: Over the past few years, the Department has received large funding increases despite the tight budget. However, even juvenile services may have to endure cuts in FY 2011, and the question will be what is cut, community-based services or juvenile jails? Last year, the Department closed a dysfunctional facility, redirecting some of the savings to expanding Multi-Systemic Therapy. The Department may try to duplicate this smart move and address a significant MST deficiency in Prince George’s County.

Local Management Boards: The local management boards in each jurisdiction pass through important funds to community programs that prevent delinquent behavior and divert placement of delinquent youth from expensive settings. The State has already made significant cuts to the LMBs.

48-Bed Limit: Last session, State Senator Bobby Zirkin proposed legislation that would have limited the size of privately-run juvenile facilities to 48 beds; the cap already exists for state-run facilities. The bill almost passed, and the Senator may introduce it again. The program most affected is the Silver Oak Academy in Carroll County; when run as the Bowling Brook Academy, it housed nearly 200 children. An existing law requires that children be served in their home regions; this law would seemingly already limit the size of facilities, because each region only has a limited need for residential programs. However, the current regionalization law may need some tweaking to force the Department to comply with it.

Gang Legislation: There is considerable interest in so-called gang legislation that would enable local police to communicate more with school-based police about students involved in gangs. A high profile incident in Anne Arundel County sparked the interest of Mike Busch, Delegate from that county and Speaker of the House of Delegates. The Speaker’s support increases the likelihood of some legislation; however, there are questions about what is really needed. Gang membership itself is not illegal, so it is unclear what school authorities would do after being told that a student was an alleged gang member.

Health

Reimbursement Rates: The health budget always suffers in tight fiscal times because it is so large and it seems like shaving a percentage here or there does not matter. For children in Medicaid and the Maryland Children’s Health Program, their ability to find doctors depends to a large extent on whether doctors want to participate, and therefore reimbursement rates matter.

Dental Reforms: In the past, low reimbursement rates meant that very few dentists participated in Medicaid, which is one reason why 12-year-old Deamonte Driver’s family could not access a dentist in Prince George’s County. Deamonte died when a dental infection spread to his brain. As part of a comprehensive dental reform plan, the Governor authorized the first of three dental reimbursement rate increases in 2008; however, budget constraints prevented the anticipated second and third installments. The Governor has also expanded the oral health safety net in underserved areas and has funded the Deamonte Driver Project, which uses a dental van to serve children in school. It is hoped that the Governor will maintain current dental funding.

Pre-Pregnancy Services: Currently, Maryland only provides family planning services to women after they become pregnant. However, the federal government will pay for 90 percent of family planning related services prior to pregnancy, provided a state gets federal approval and is willing to put up its 10 percent. These pre-pregnancy services can improve the health of women prior to becoming pregnant, which research shows improves the health of the babies delivered. Last year, legislation in Maryland failed, in part because of the expense of making the eligibility changes to the State’s computer system. Current federal funding for technology upgrades, combined with the 90-percent federal match, should make this an appeal piece of legislation, if reintroduced by Delegate Health Mizeur.

Economic Security

Benefit Simplification: Families have had considerable difficulty accessing public benefits, including food stamps and health insurance. A state judge recently found the State out of compliance with federal law and has ordered an improvement plan. Hopefully, the FY 2011 budget will reflect increased numbers of eligibility workers. Equally important, legislators may take steps to simplify the eligibility process so that families do not need to complete multiple forms and visit many different offices to apply for benefits.

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