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ANNAPOLIS (Feb. 21, 2009) -- Gov. Martin O'Malley said Friday that schools will be spared some of the deepest budget cuts proposed in the state's history thanks to $720 million in public education aid Maryland will receive from the federal stimulus package.
The controversial American Recovery and Reinvestment Act will also save 700 state employees from layoffs by providing $62 million of discretionary funds that will be used to retain those jobs.
While O'Malley acknowledged the next two years ahead are going to be "very, very difficult" in these trying economic times, he said the federal funds will protect state investments in education.
"As a state we understand very well just how important the educational mission is to the economic opportunities we hope for our children and grandchildren ... And now we have an opportunity, thanks to President Obama and the leadership in Congress, to be able to protect that investment in the next two years ahead," O'Malley said.
For the first time in the history of Maryland, the Geographic Cost of Education Index, a funding formula which awards more money to districts where the cost of education is greater, will be funded at 100 percent in FY2010 and FY2011.
The federal shot in the arm will also make counties whole for proposed cuts to the index this year. And counties will not be asked to split with the state the cost of educating special needs children in private facilities, as the state now has enough funds to continue to shoulder 80 percent of the burden.
Higher education will get much needed relief, too. O'Malley said he will restore planned cuts to community colleges by infusing $35 million in aid over two years.
"As I said at the beginning of the session, when the lieutenant governor and I had to submit a budget that had about ($)1.9 billion in cuts, that was toughest budget that any governor had to submit," O'Malley said.
"It was my sincere hope at that time that the budget conditions would improve ... and thanks to President Obama's leadership it has improved," he said.
But despite the good news, an economic crisis that could threaten the state's future fiscal stability still looms. The stimulus funds are only a temporary injection of capital to the state's cash-strapped budget and will run out in two years.
With tax revenues continuing to dip below even more modest estimates, O'Malley, once again, is looking to the Obama administration to help drive the economy out of the ditch.
"Hopefully as we do our work and our business here, President Obama and Congress will tackle the other challenges to getting our economy going -- the foreclosure crisis, the frozen credit markets - so that by fiscal year 2012, hopefully we'll see our economy starting to come back," O'Malley said.
But Delegate Norman Conway, D-Worcester, was still concerned about the prospects for 2012. He worried about what happens when the stimulus money dries up, especially if local jurisdictions start new programs that could swell the baseline budget.
"I see our big challenge as maintaining control of the baseline budget," Conway said. "And how well we do that we'll see in that third year."
Delegate Melony Griffith, D-Prince George's, said she applauds the governor for scrapping the planned $35 million in cuts to education aid in her county and thanked him for "making sure that help came home."
Griffith, too, said the stimulus is not a cure all. She said she will be working with other elected officials "to try to address the shortfall that still exists in Prince George's County."
When asked whether he was concerned about using the stimulus money to plug holes in the budget, when the money will disappear in two years, O'Malley said, "I'd be more worried if I didn't have the money to plug the hole."
Capital News Service contributed to this report.