107OAG196 ( 2022 )

196 [107 Op. Att’y
BUDGETARY ADMINISTRATION
MANDATORY APPROPRIATIONS FOR THE PUBLIC SCHOOLS –
MARYLAND STADIUM AUTHORITY – ARTICLE XIX OF THE
MARYLAND CONSTITUTION – QUESTIONS ABOUT THE
AUTHORITY OF THE GOVERNOR OR GENERAL ASSEMBLY
TO REDUCE OR REALLOCATE FUNDING FOR THE BUILT TO
LEARN ACT
December 15, 2022
Michael J. Frenz
Executive Director, Maryland Stadium Authority
The Built to Learn Act of 2020 authorized the Maryland
Stadium Authority (the “Authority”) to issue up to $2.2 billion in
bonds and to use the proceeds for public school construction
projects throughout the State. 2020 Md. Laws, ch. 20. To pay the
debt service on those bonds—that is, to pay the interest and repay
the principal—the Act provides for regular transfers from the
Education Trust Fund, a special fund in the State Treasury. The
Education Trust Fund, in turn, is financed by revenues from
commercial gaming in the State, in accordance with the
requirements of Article XIX of the Maryland Constitution. Article
XIX requires that certain gaming revenues may only be used to
supplement funding for public education in six broad areas, but
otherwise does not specify how the money must be allocated.
On behalf of the Authority, you requested our opinion on a
series of questions about the Built to Learn Act’s funding
mechanism. Specifically, you asked: (1) whether the funding for
debt service mandated by the Built to Learn Act can be reduced or
reallocated to another purpose by either the Governor or the
General Assembly; (2) whether the funding for education required
by Article XIX of the Constitution more generally can be reduced
by the Governor or the General Assembly, or can be reallocated to
another purpose; and (3) what funding priority, if any, applies to
the funds in the Education Trust Fund.
As to your first question: Under current law, the Governor
and General Assembly cannot use the annual budget process to
reduce or reallocate the debt service funding that the Built to Learn
Act mandates. That is because a provision of the Act requires that
a certain amount be deposited each year from the Education Trust
Fund into a fund dedicated to debt service on Built to Learn Act
bonds, Md. Code Ann., Econ. Dev. (“EC”) § 10-649(g), and that
Gen. 196] 197
provision establishes a mandatory appropriation for public
education, subject to constitutional protection. The Governor thus
must include the amount that the statute specifies in the budget,
Md. Const., Art. III, § 52(4)(f), (11), (12), and the General
Assembly may not reduce it during the budget process, id. § 52(6).
The Governor also may not reduce that appropriation or transfer
the funds to another program after the budget is passed.
There are, however, some actions that the General Assembly
could take to reduce funding for the Built to Learn Act by changing
current law. For example, nothing would prevent the General
Assembly from repealing or amending EC § 10-649(g) itself via
ordinary legislation and thereby eliminating the constitutionally
protected funding mandate. The General Assembly could also
amend or eliminate § 10-649(g)’s mandate and make the change
effective for only a single fiscal year, as long as it did so through
the ordinary legislative process, such as via a Budget Reconciliation
and Financing Act. The General Assembly also may have some,
though not unlimited, latitude to reduce the flow of funds from
commercial gaming into the Education Trust Fund, by amending
the statute that currently governs how commercial gaming
revenues are distributed at the time they are first received.
As to your second question: Assuming that § 10-649(g)
remains in effect, our answer is the same as our answer to your first
question. The amount specified by the statute must be appropriated,
out of funds raised under Article XIX, for Built to Learn Act debt
service and may not be reallocated to another purpose. If the
General Assembly were to repeal or amend § 10-649(g), however,
nothing in Article XIX standing alone would require that any funds
be appropriated to repay Built to Learn Act bonds. Article XIX, by
itself, does not mandate that funds be appropriated for any specific
educational purpose, but instead gives the Governor and General
Assembly discretion to allocate commercial gaming revenues to a
variety of education-related purposes.
Finally, the General Assembly answered your third question
during its most recent session, by providing that distributions for
Built to Learn Act debt service are the first priority for the use of
money in the Education Trust Fund.
198 [107 Op. Att’y
I
Background
A. Maryland’s Budget System
Article III, § 52 of the Maryland Constitution defines the
powers of the Governor and the General Assembly regarding the
budget, appropriations, and spending of funds from the State
Treasury. Md. Const., Art. III, § 52. Every year, the Governor
must submit to the General Assembly a budget containing “a
complete plan of proposed expenditures and estimated revenues”
for the upcoming fiscal year, id. § 52(3), along with a “budget bill,”
which is introduced as legislation, id. § 52(5). With certain
exceptions, the General Assembly may “strike out or reduce” any
of the appropriations proposed in the Governor’s budget bill. Id.
§ 52(6a).
Maryland’s budget system traces its existence to a
constitutional amendment ratified in 1916. 106 Opinions of the
Attorney General 38, 39 (2021). For that reason, the governing
constitutional provision—Article III, § 52—is often called the
“Budget Amendment.” The amendment aimed to centralize power
over, and accountability for, the State’s spending in the Governor.
Judy v. Schaefer, 331 Md. 239, 245-46 (1993); Bayne v. Secretary
of State, 283 Md. 560, 568 (1978).
But in more recent years, further amendments have increased
the General Assembly’s power over State spending. Originally, the
General Assembly could only add a new Executive Branch
appropriation, or increase an existing one, by passing a separate
“supplementary appropriation bill” funded by a new tax. Md.
Const., Art. III, § 52(6), (8); see also Maryland Action for Foster
Children v. State, 279 Md. 133, 142-43 (1977) (describing the
limited powers of the General Assembly to add new or increase
existing Executive appropriations prior to 1978). In 1978, however,
an amendment authorized the General Assembly to mandate, by
statute, that the Governor include funds in the budget at a specified
level for a specified program, id. § 52(11), (12), though such
mandates cannot take effect in the first fiscal year after their
enactment, id., and once the Governor has added the mandated item
to the budget the General Assembly may still strike or reduce the
amount, 65 Opinions of the Attorney General 45, 49-50 (1980).
Another amendment ratified in 2020, which will govern the budget
starting with Fiscal Year 2024, will allow the General Assembly to
increase or add appropriations for Executive Branch programs in
the budget bill itself, as long as the total for all Executive Branch
Gen. 196] 199
appropriations does not exceed the Governor’s original submission
and the budget as a whole remains balanced. 2020 Md. Laws, ch.
645 (ratified Nov. 3, 2020) (adding Md. Const., Art. III, § 52(6b)).
The Constitution also protects certain categories of spending
from alteration by both the Governor and the General Assembly.
Spending for public education is one of those specially protected
categories. Under the express terms of the Constitution, when the
General Assembly “provide[s] by law” for a certain category of
spending “for the public schools,” the Governor must include that
item in the budget “without revision.” Md. Const., Art. III,
§ 52(11), (12); see also id. § 52(4)(f). The General Assembly, in
turn, “shall not amend the Budget Bill so as to affect . . . the
provisions made by the laws of the State for the establishment and
maintenance of a system of public schools.” Id. § 52(6). But, as
we will explain further below, not every item of public-school
spending receives this constitutional protection. See 60 Opinions
of the Attorney General 197 (1975); 36 Opinions of the Attorney
General 109 (1951).
Even after the budget bill is passed and the fiscal year begins,
the budget is not set in stone. The General Assembly has
empowered the Governor to adjust appropriations for the current
year under certain conditions. See Md. Const., Art. III, § 52(13)
(authorizing the General Assembly to “enact such laws not
inconsistent with [§ 52], as may be necessary and proper to carry
out its provisions”).
First, the Governor, with the consent of the Board of Public
Works, may reduce by up to 25% any appropriation the Governor
“considers unnecessary.” Md. Code Ann., State Fin. & Proc.
(“SFP”) § 7-213; see generally 106 Opinions of the Attorney
General at 42-45. This power extends to most appropriations
mandated by statute. 65 Opinions of the Attorney General at 52-
53. But certain appropriations, including mandatory appropriations
for public schools, are exempt from this budget reduction power.
Id. at 49; SFP § 7-213(b).
Second, the Governor may use a “budget amendment” to
transfer funds from one program to another within a unit of State
government, or, in certain narrow circumstances, from one unit to
another. SFP § 7-209. The Governor can also use a budget
amendment to allocate unanticipated revenues unaccounted for in
the budget. SFP § 7-217.
200 [107 Op. Att’y
B. Article XIX and the Education Trust Fund
Your questions concern funds raised under Article XIX of the
Maryland Constitution. Article XIX originally empowered the
State to issue up to five “video lottery operation licenses,”
authorizing the license holders to operate “video lottery terminals”
(that is, video slot machines) in five specified locations. Md.
Const., Art. XIX, § 1(b)-(c). The General Assembly proposed
Article XIX in 2007 to address the State’s structural budget deficit,
which was driven in large part by the growth in education spending.
See Md. Exec. Order No. 01.01.2007.23 (Oct. 15, 2007)
(convening a special legislative session to address a structural
deficit caused in part by an “important and necessary” increase in
education spending). The Legislature accordingly provided that
the revenue raised from the video lottery operation licenses would
be “for the primary purpose of raising revenue for” public
education. Md. Const., Art. XIX, § 1(c)(1). At the 2008 general
election, the voters ratified the proposed amendment and agreed to
“authoriz[e] video lottery terminals (slot machines) to fund
education.”1
The General Assembly also passed an implementing statute,
contingent on the ratification of Article XIX. Among other details,
that statute specified the distribution of the new revenues. 2007
Md. Laws, Spec. Sess., ch. 4. The formula for dividing up “the
proceeds of video lottery terminals” included shares for the casino
owner; for the State’s administrative costs; for “local impact
grants” to address the impact of the new casinos on their localities;
for the State’s horse-racing industry to enhance prizes and upgrade
racetracks; and for a new fund making grants to small and minority-
and woman-owned businesses. Id. (enacting Md. Code Ann., State
Gov’t (“SG”) § 9-1A-27). The remainder of the slot machine
revenues would go to the new Education Trust Fund. Id. (enacting
SG § 9-1A-30).2 Expenditures from the Fund, which is a special
fund in the Treasury, would be made “in accordance with the State
budget” for educational purposes. Id. (enacting SG § 9-1A-30(d)).3
1
2008 General Election Returns, Question 2, Maryland Manual,
https://msa.maryland.gov/msa/mdmanual/42electg/html/2008/2008const.html.
2
The actual percentage of video slot machine revenues dedicated to
the Education Trust Fund varies by casino under the statutory formula,
ranging from approximately one third to one half of gross revenue. See
SG § 9-1A-27(a)-(c).
3
A special fund consists of State moneys that have been dedicated to
a particular purpose. The budget bill may not appropriate these funds to
Gen. 196] 201
Article XIX also provided that the voters could approve
expansion of commercial gaming in the State by referendum. Md.
Const., Art. XIX, § 1(e). In 2012, the voters narrowly approved a
proposal to authorize a sixth casino in Prince George’s County and
to allow casinos to offer “table games” like roulette, blackjack, and
poker. 2012 Md. Laws, 2d Spec. Sess., ch. 1.4 The casino owner
keeps 80% of the revenue from these table games, and 15% goes
to the Education Trust Fund (with the remaining 5% to local
jurisdictions). SG § 9-1A-27(d).
Prior to 2018, funds in the Education Trust Fund were
generally used to satisfy the State’s then-existing educational
funding formulas, known as the “Bridge to Excellence” formulas,
rather than to increase or supplement the overall level of education
funding. See Revised Fiscal & Policy Note, H.B. 1697, 2018 Leg.,
Reg. Sess. at 4. However, some advocates and legislators believed
that these funds should instead be used to increase total education
spending. See generally Hearing on H.B. 1697 Before the House
Appropriations Comm., 2018 Leg., Reg. Sess. (Mar. 8, 2018). In
response, the General Assembly proposed the so-called “lockbox”
amendment to Article XIX, which was ratified in 2018.5 2018 Md.
Laws, ch. 357; see, e.g., Editorial, Battle of the Lockboxes, Balt.
Sun, Feb. 18, 2018.
The lockbox amendment requires the Governor to include a
specified amount of commercial gaming revenues in each year’s
budget “as supplemental funding for public education.” Md.
Const., Art. XIX, § 1(f)(1) (emphasis added). A use of funds
qualifies as “supplemental” if it is “in addition to the State funding
provided through the funding formulas established in the Bridge to
Excellence in Public Schools Act of 2002 for prekindergarten
any other purpose, see, e.g., 91 Opinions of the Attorney General 24, 29-
30 & n.11 (2006), although the General Assembly may move money out
of a special fund by enacting a statute separate from the budget, see, e.g.,
89 Opinions of the Attorney General 172, 178 (2004). When a particular
revenue source has been dedicated by statute to a special fund, there is
no need to appropriate those moneys into the special fund. See Letter
from Richard E. Israel, Assistant Attorney General, to Sen. Laurence
Levitan, at 2 (Mar. 31, 1988).
4
See also 2012 General Election Returns, Question 7, Maryland Manual,
https://msa.maryland.gov/msa/mdmanual/42electg/html/2012/2012const.ht
ml#referenda.
5
2018 General Election Returns, Question 1, Maryland Manual,
https://msa.maryland.gov/msa/mdmanual/42electg/html/2018/2018cons
t.html.
202 [107 Op. Att’y
through grade 12 in public schools.” Id. § 1(f)(3)(i). Starting in
Fiscal Year 2023, that requirement applies to “100% of revenues
raised for public education under [Art. XIX, § 1(c)(1)]”—that is,
from video slot machines—and 100% of “any other commercial
gaming revenues dedicated to public education.” Id. § 1(f)(1)(iv).
The amendment specifies six permitted uses for this supplemental
education funding, one of which is to “[m]aintain, renovate, or
construct public schools.” Id. § 1(f)(2).
C. The Stadium Authority and the Built to Learn Act
The Maryland Stadium Authority is a “public corporation and
instrumentality of the State” established in 1986. Kelly v.
Marylanders for Sports Sanity, Inc., 310 Md. 437, 439 (1987). The
Built to Learn Act of 2020 charged the Authority with overseeing
a new Statewide school construction program. 2020 Md. Laws, ch.
20. The Act empowered the Authority to issue up to $2.2 billion
in bonds to “finance[e] acquisition, construction, renovation, and
related expenses” for “public school facilities in the State.” Id.(codified at EC § 10-628(c)(1)(vii)).
The Built to Learn Act bonds are explicitly not a debt or
obligation of the State but are instead “a limited obligation of the
Authority payable solely from money pledged by the Authority”
for debt service on those bonds. EC § 10-649(d). To fund that debt
service, the Act established the Supplemental Public School
Construction Financing Fund (“Financing Fund”). EC § 10-658.
The money in the Financing Fund will be used to pay regular debt
service on the Built to Learn Act bonds, EC § 10-658(c), and is the
only money pledged by the Authority for repayment on those
bonds, see EC § 10-634.
The Built to Learn Act also contains a mechanism to deposit
the funds necessary to pay debt service into the Financing Fund:
“In accordance with § 9-1A-30 of the State Government Article,”
which establishes the Education Trust Fund, “the Comptroller shall
deposit a portion of the money in the Education Trust Fund into the
[Financing Fund]” twice each fiscal year. EC § 10-649(g). The
Act requires that $30 million be deposited from the Education Trust
Fund into the Financing Fund in Fiscal Year 2022, $60 million in
Fiscal Year 2023, and $125 million each year starting with Fiscal
Year 2024. Id. In 2022, the General Assembly enacted legislation
clarifying that the “required deposits under [EC § 10-649(g)]” into
the Financing Fund are the first priority for the use of money in the
Education Trust Fund. 2022 Md. Laws, ch. 32 (codified at SG
§ 9-1A-30(d)(1)).
Gen. 196] 203
II
Analysis
Current law establishes a flow of money to pay debt service
on bonds issued pursuant to the Built to Learn Act. Under SG
§ 9-1A-27, a substantial share of the revenue from commercial
gaming in the State must be deposited in the Education Trust Fund.
SG §§ 9-1A-27, 9-1A-30; see supra note 2 (explaining that the
share varies by casino under a statutory formula, ranging from
approximately one third to one half of gross revenue). Starting with
Fiscal Year 2023, the Governor must include 100% of those
deposits in the budget as “supplemental funding for public
education.” Md. Const., Art. XIX, § 1(f). The Built to Learn Act
specifically requires that a fixed amount of that Education Trust
Fund money be deposited in the Financing Fund to cover debt
service on Built to Learn Act bonds. EC § 10-649.6
Your questions all concern the extent to which the Governor
and General Assembly might alter that flow of money from
commercial gaming to the Education Trust Fund “lockbox,” and
then to the Financing Fund. Answering those questions requires us
to interpret both the Maryland Constitution and the relevant State
statutes. The principles of constitutional and statutory interpretation
are similar: in statutory interpretation, our overall objective is to
determine the intent of the General Assembly, and in constitutional
interpretation, “we seek ‘the construction that effectuates the intent
of [the provision’s] framers.’” E.g., Fish Mkt. Nominee Corp. v.
G.A.A., Inc., 337 Md. 1, 8 (1994) (quoting Brown v. Brown, 287
Md. 273, 277 (1980)). In both types of interpretation, we begin
with the ordinary meaning of the language used, considered in its
context, and we may end our analysis there if the language is
sufficiently clear, though we may consider other sources of
meaning, such as the provision’s history and purpose, especially if
the provision is ambiguous. See id. at 8-9; see also 97 Opinions of
the Attorney General 58, 64 (2012). We also keep in mind that
both statutes and constitutional provisions, especially those written
in broad and general terms, may be interpreted in light of
developments since their enactment. Kindley v. Governor, 289 Md.
620, 625 (1981); 68 Opinions of the Attorney General 48, 57-58
(1983). With those principles in mind, we turn to your questions.
6
The Act contemplates that Prince George’s County will construct or
renovate at least six public schools by entering into a public-private
partnership agreement with a private entity. Md. Code Ann., Educ.
(“ED”) § 4-126.1. The Financing Fund will also be used to fund Prince
George’s County’s obligations under that public-private partnership
agreement. See EC § 10-658(b)(3).
204 [107 Op. Att’y
A. EC § 10-649(g) Deposits into the Financing Fund
Your first question is whether “the funding mandated in [EC]
§ 10-649 can be reduced or re-allocated to another purpose by
either the Governor or the General Assembly.” As we will explain,
the Built to Learn Act’s requirement that “the Comptroller shall
deposit” a specified amount from “the Education Trust Fund into
the Supplemental Public School Construction Financing Fund”
each year, EC § 10-649(g), establishes a mandatory appropriation
for the public schools that is constitutionally protected from the
Governor’s and the General Assembly’s ordinary budget powers.
However, the General Assembly could eliminate that mandatory
appropriation by amending or repealing § 10-649(g) itself. The
Legislature could also potentially amend SG § 9-1A-27, the statute
that dedicates commercial gaming revenues to the Education Trust
Fund in the first place, subject to Article XIX’s requirement that
public school funding shall be “the primary purpose” for the State’s
video lottery terminal revenues. Md. Const., Art. XIX, § 1(c)(1).
1. The Governor’s and General Assembly’s Budget
Formulation Powers
We begin by considering whether the Governor may omit EC
§ 10-649(g)’s required amounts from the annual budget, or whether
the General Assembly may reduce or eliminate them during its
consideration of the budget bill. See Md. Const., Art. III, § 52. In
both cases, our answer is “no.” Section 10-649(g)’s status as a
mandatory appropriation for the maintenance of the public schools
protects it from the exercise of these ordinary budget powers.
The Constitution charges the General Assembly to “by Law
establish throughout the State a thorough and efficient System of
Free Public Schools; and [to] provide by taxation, or otherwise, for
their maintenance.” Md. Const., Art. VIII, § 1. That provision is
not self-executing but instead requires the General Assembly to
determine “by Law” how to organize and finance the public school
system. See Hornbeck v. Somerset County Bd. of Educ., 295 Md.
597, 631-32 (1983). Thus, statutory education financing provisions
implement and give substance to an express constitutional
mandate. The framers of the Budget Amendment (that is, Article
III, § 52) sought to harmonize the new budget procedure with
existing constitutional mandates where possible. See Report of the
Commission on Economy and Efficiency on a Budget System, Md.
Senate Journal, 1916 Leg., Reg. Sess., at 129, 133 (Jan. 28, 1916)
(“Goodnow Report”); see also 106 Opinions of the Attorney
Gen. 196] 205
General at 41 (explaining that Art. III, § 52 was developed from
the Goodnow Report’s recommendations).
With that idea of constitutional harmonization in mind, the
Budget Amendment granted the State’s educational funding
mechanisms some protection from the annual budget process.
More specifically, the Governor must include the spending
estimates for “the public schools, as provided by law,” in the
budget “without revision.” Md. Const., Art. III, § 52(11), (12); see
also id. § 52(4)(f). The General Assembly, in turn “shall not amend
the Budget Bill so as to affect . . . the provisions made by the laws
of the State for the establishment and maintenance of a system of
public schools.” Id. § 52(6). In sum, then, once the General
Assembly, in implementing Article VIII, has determined that the
public schools require a certain amount of funds, the Governor and
General Assembly—in their budget-formulating capacity—must
provide those funds.
Because mandatory appropriations significantly constrain the
budgetary discretion of both the Governor and the General
Assembly, however, we have recognized that certain conditions
must be met before a particular category of education spending will
be treated as constitutionally protected. An item of education
spending comes within the protection of § 52(4), (6), (11), and (12)
only if the General Assembly has established it “by law”—that is,
made it mandatory by statute. See 36 Opinions of the Attorney
General at 111. Our prior opinions have also understood these
constitutional provisions to require that educational appropriation
mandates must “admit of no administrative discretion,” a
requirement we discuss further below. Id. To summarize, then,
“two conditions must be satisfied before an educational budget
item will be treated as a mandatory public school appropriation: (1)
it must have been determined by the General Assembly to relate to
or provide for ‘the establishment and maintenance of a system of
public schools’; and (2) it must be an item which has been made
mandatory by law and which admits of no administrative discretion
in determining the amount to be submitted as a budget estimate.”
60 Opinions of the Attorney General at 201.
Section 10-649(g) of the Economic Development Article,
enacted by the Built to Learn Act, fulfills those criteria. First, its
funding mechanism provides for the maintenance of the State’s
public school system. Because school buildings are expensive
projects that often must be financed by long-term borrowing, bonds
for school construction—and, in turn, funds that are spent on debt
service on those bonds—serve an educational purpose. See Md.
206 [107 Op. Att’y
Op. Att’y Gen. No. 80-020, 1980 WL 127888, at *2 (Feb. 19, 1980)
(unpublished). The bonds that have been issued, and that will be
issued, under the Built to Learn Act are for the exclusive purpose
of building and renovating public schools. See EC
§§ 10-628(c)(1)(viii), 10-649, 10-650. Section 10-649(g) makes
those bond issues viable, and thereby promotes the Act’s
underlying educational purpose, by ensuring that the Authority will
be able to pay the principal and interest on the bonds.
But because the funding stream established by § 10-649(g)
draws on funds raised under Article XIX, the requirements of
Article XIX create an additional complication. Under Article
XIX’s “lockbox” provisions, commercial gaming revenues raised
under Article XIX must be used as “supplemental funding for
public education.” Md. Const., Art. XIX, § 1(f) (emphasis added).
There is a question, then, about whether funding for school
construction under the Built to Learn Act qualifies as
“supplemental” funding within the meaning of Article XIX. And
if those funds are indeed “supplemental” under Article XIX, there
is a second question as to whether “supplemental” funding under
Article XIX can also qualify as necessary for the “establishment
and maintenance” of the public school system, as required for those
funds to be constitutionally shielded from the budget process. See
Md. Const., Art. III, § 52(4), (6), (11), (12). In our view, the answer
to both of those questions is “yes”: the Built to Learn Act funds
are “supplemental” within the meaning of Article XIX, and there is
no inconsistency between funds being “supplemental” in that sense
and also supporting an educational funding mandate.
Beginning with the first question, Article XIX, § 1(f)(3)
requires that commercial gaming revenues “supplement[]” funding
under the “formulas established in the Bridge to Excellence in
Public Schools Act of 2002,” i.e., the school funding formulas that
existed in 2018 (and in 2008, when Article XIX was first ratified).
At the time § 1(f) was proposed, the General Assembly expected it
would soon enact new and increased funding mandates supplanting
the Bridge to Excellence, see Revised Fiscal & Policy Note, S.B.
1122, 2018 Leg., Reg. Sess. at 3-4 (discussing recommendations of
the Kirwan Commission and likelihood that increased education
spending would become necessary), which later came to fruition
with enactment of the “Blueprint for Maryland’s Future,” see 2021
Md. Laws, ch. 36. And the General Assembly apparently expected
that “supplemental” funds under § 1(f) would be available to fulfill
the expanded funding requirements of the Blueprint. See, e.g.,
Revised Fiscal & Policy Note, S.B. 1122, 2018 Leg., Reg. Sess. at
4 (explaining that “[t]he allowable uses for the supplemental
Gen. 196] 207
funding” under § 1(f) “align with some of the preliminary
recommendations of the [Kirwan Commission],” which proposed
the Blueprint reforms); Hearing on H.B. 1697 Before the House
Appropriations Comm., at 20:45, 2018 Leg., Reg. Sess. (Mar. 8,
2018) (statement of Del. McIntosh); see also 2018 Md. Laws, ch.
357 (Preamble) (indicating that purpose of 2018 constitutional
amendment was tied to the recommendations of the Kirwan
Commission).
That is, part of the purpose of the education “lockbox” was to
secure financing for the Blueprint’s enhancements to public
education funding, thereby fulfilling what lockbox advocates
argued was the voters’ original expectation upon ratification of
Article XIX: that commercial gaming would support the expansion
of funding for public schools beyond what the law required in
2008.7 Both this history, and the text of § 1(f)—which refers only
to the “Bridge to Excellence” formulas—suggest that Article XIX
funds may support an educational funding formula without losing
their “supplemental” character, as long as those funds go toward
spending above and beyond the requirements of the “Bridge to
Excellence.”
This understanding, we recognize, raises difficult questions
about how to define the baseline that Article XIX funds must
“supplement,” given that the Bridge to Excellence formulas which
define that baseline no longer exist. Or perhaps the requirement
that funding be “supplemental” to Bridge to Excellence no longer
has any practical effect now that the Blueprint formulas have
superseded the Bridge to Excellence formulas.
7
The Blueprint formulas were projected to increase State education
spending above the Bridge to Excellence mandated amounts by $971
million in Fiscal Year 2023, $1.2 billion in Fiscal Year 2024, and by a
greater amount in each successive fiscal year, up to $2.8 billion in Fiscal
Year 2030. Revised Fiscal & Policy Note, H.B. 1300, 2020 Leg., Reg.
Sess. App. A. By contrast, Education Trust Fund revenues from
commercial gaming have generally been in the vicinity of $500 million
and have increased at a modest rate. Revised Fiscal & Policy Note, S.B.
1122, 2018 Leg., Reg. Sess. at 5 ex. 1. Thus, it is likely that the amount
of money dedicated to supplemental funding for public schools under
Article XIX will always be smaller than the difference between the
amount Bridge to Excellence would have required and the amount
Blueprint will require. This in turn suggests that the entire amount of
Education Trust Fund revenues could be dedicated to funding the
Blueprint formulas without violating the requirement that those funds
“supplement[]” what Bridge to Excellence would have required.
208 [107 Op. Att’y
We need not answer those questions here, though, because the
Built to Learn Act provides for funding above the baseline—that
is, funding that qualifies as “supplemental”—however the baseline
is defined. Funding for school construction has traditionally been
separate from the State’s regular educational funding programs.
That is, most if not all school construction funding has occurred
outside of the Bridge to Excellence and Blueprint funding formulas
and has instead been supported by general obligation bonds in the
capital budget. See Revised Fiscal & Policy Note, H.B. 1783, 2018
Leg., Reg. Sess. at 15-19; Revised Fiscal & Policy Note, H.B. 1,
2020 Leg., Reg. Sess. at 20-23. Because those formulas have not
mandated substantial funding for school construction, any school
construction funding program is likely to qualify as a
“supplemental” use within the meaning of § 1(f). Consistent with
that understanding, Article XIX, § 1(f)(2)(vi) identifies the
maintenance, renovation, and construction of public schools as a
valid use for Article XIX “supplemental” funding.
Moreover, even if the State’s regular school construction
program were considered part of the § 1(f) baseline, the Built to
Learn Act funds would not merit that same treatment, because
those funds were intended to supplement the regular school
construction program. The Built to Learn Act was enacted because
the regular public school construction program cannot fund every
deserving project, see Revised Fiscal and Policy Note, H.B. 1, 2020
Leg., Reg. Sess. at 20, given that the funding available under the
regular program is limited by the State’s estimates of how much
new debt the State can “prudently” incur, see SFP §§ 8-112, 8-113.
Indeed, the first priority of the Built to Learn Act is to fund
approved school construction projects that have been “deferred due
to fiscal constraints.” EC § 10-650(a)(2).8
To the second question raised above—whether “supplemental”
funding can qualify as “mandatory” for budget purposes—we do
not see any logical problem with “supplemental” funds as that term
8
We accordingly see no conflict between Article XIX’s requirement
(also reflected in SG § 9-1A-30(e)) that commercial gaming revenues be
used for “supplemental” funding, and EC § 10-650(c)’s provision that
Built to Learn Act funds represent “the State share” of school
construction costs. The Built to Learn Act is providing the amount of
funding that the State would otherwise have provided for a project under
its regular construction program if it had the funds to do so. Though the
same formula is used to calculate the State share, as distinguished from
the local share, under both programs, the projects funded under the Built
to Learn Act would not have received any State funding at all absent the
Built to Learn Act—hence, the Act is “supplemental.”
Gen. 196] 209
is used in Article XIX supporting the “establishment and
maintenance” of the public schools. Funds may be supplemental
in the sense that they add to some pre-existing baseline, while still
being both mandatory and necessary in the General Assembly’s
judgment (and as a practical matter) to meet the requirements for
the State’s system of public schools. The General Assembly has
substantial discretion to determine what “a thorough and efficient
system of free public schools” requires, see Hornbeck, 295 Md. at
631-32; 36 Opinions of the Attorney General at 111-12, and
therefore may establish new educational funding mandates or
expand old ones in order to meet those requirements. Those new
mandates may supplement the funding required under Bridge to
Excellence, while still being necessary to provide for the public
school system—as is the case with the Built to Learn Act.
We also note that the State’s educational funding programs
have changed many times since voters ratified the Budget
Amendment in 1916. See Hornbeck, 295 Md. at 628-31.9 In our
view, the framers of the Budget Amendment would have
anticipated that such changes could occur, including changes that
would increase the overall level of funding, on the grounds that
what was once adequate is no longer adequate. See 68 Opinions of
the Attorney General at 57-58; Norris v. Mayor & City Council of
Baltimore, 172 Md. 667, 675-76 (1937) (explaining that the
Constitution “will be given a meaning which will permit the
application of [its] principles to changes in the economic, social,
and political life of the people”).
The framers thus did not tie § 52’s protections for education
funding to any specific amount or formula. Nor did they foreclose
the possibility that the General Assembly could supplement an
older formula while at the same time determining the new amount
to be necessary in light of current circumstances. Rather, they left
it for the General Assembly to determine what level of funding to
make mandatory. For all these reasons, we think funding derived
from Article XIX may be dedicated “for the establishment and
maintenance of [the] public schools” and made mandatory within
the meaning of Article III, § 52, and thus constitutionally protected
from the budget process, while still being “supplemental” to the
Bridge to Excellence formulas within the meaning of Article XIX,
§ 1(f).
9
In fact, the General Assembly comprehensively revised the State’s
educational funding formulas that very same year. See 1916 Md. Laws,
ch. 506.
210 [107 Op. Att’y
Turning to the second prong of our test for mandated
education appropriations, the funding provided in EC § 10-649(g)
has “been made mandatory by law.” 60 Opinions of the Attorney
General at 201. Whether the General Assembly has made an
appropriation mandatory is a question of legislative intent. See 65
Opinions of the Attorney General 108, 110 (1980); Letter from
Richard E. Israel, Assistant Attorney General, to Barbara Klein,
Department of Fiscal Services (Mar. 30, 1984). Although analysis
of legislative intent may consider various types of evidence, “[i]f
the plain language of the statute is unambiguous and is consistent
with the statute’s apparent purpose,” we ordinarily need not go
further. Comptroller v. Phillips, 384 Md. 583, 591 (2005).
Here, the plain language and statutory purpose are in
harmony. Section 10-649(g) provides that the Comptroller “shall
deposit” the specified funds from the Education Trust Fund into the
Financing Fund each year. The word “shall” generally implies a
mandatory duty. See, e.g., Walzer v. Osborne, 395 Md. 563, 580
(2006). In addition, the statute does not merely require the
Governor to include funds in the budget, which might leave open
the possibility that the funds could be removed from the budget or
reallocated at a later stage in the process. See Letter from David
W. Stamper, Assistant Attorney General, to David Romans,
Department of Legislative Services, at 3 (Mar. 22, 2019) (“Romans
Letter”). Instead, § 10-649(g) expressly directs the Comptroller to
disburse the funds at specified intervals. This directive assumes
there will be an appropriation authorizing that disbursement, since
the Comptroller may not authorize disbursement of funds from the
Treasury without an appropriation. See Md. Const., Art. VI, § 2.
Treating the EC § 10-649(g) disbursement as mandatory is
also consistent with the statutory purpose. An appropriation
mandate helps to ensure the availability of funds for debt service
on Built to Learn Act bonds (even though, as discussed further
below, the General Assembly retains the ability to alter the
mandate). And by providing that the disbursement under
§ 10-649(g) is the first priority for the use of Education Trust Fund
money, the General Assembly further confirmed its intent that that
disbursement be mandatory. See 2022 Md. Laws, ch. 32
(amending SG § 9-1A-30(d)). We are thus confident that the
General Assembly intended § 10-649(g) to create a mandatory
appropriation.
We also see no “administrative discretion in determining the
amount” to be disbursed to the Financing Fund under § 10-649(g).
60 Opinions of the Attorney General at 201. Although the “no
Gen. 196] 211
administrative discretion” test can sometimes be difficult to apply,
see, e.g., Letter from Patrick B. Hughes, Chief Counsel, Opinions
& Advice, and Thomas S. Chapman, Assistant Attorney General,
to Sen. Paul G. Pinsky and Del. Maggie McIntosh (Feb. 22, 2022)
(considering whether the “no administrative discretion” test may
be satisfied when factual projections or estimates are used as inputs
to formula), we need not wrestle with any of those more difficult
questions to conclude that the statute here leaves “no administrative
discretion.”
Far from providing any administrative discretion, the statute
specifies the precise amounts to be distributed: $30 million in
Fiscal Year 2022, $60 million in Fiscal Year 2023, and $125
million in Fiscal Year 2024 and each subsequent fiscal year. EC
§ 10-649(g)(2). Regardless of how the “no administrative
discretion” test might apply under other circumstances, then, this
statute clearly does not allow for any discretion. See 42 Opinions
of the Attorney General 98, 98 (1957) (concluding that statute
specifying minimum dollar amount for education required
Governor and General Assembly to appropriate at least that
amount).10
It makes no difference that the source of the mandatory
appropriation is a special fund, the Education Trust Fund, rather
than the General Fund. Cf. 68 Opinions of the Attorney General
86, 93-94 (1983) (concluding, outside the education context, that
the General Assembly could mandate an appropriation from federal
funds, which are treated similarly to special funds). Of course, a
special fund is a smaller pool of money than the General Fund.
Thus, drawing a mandatory appropriation from a special fund
increases the likelihood that there will be insufficient cash on hand
to fund the mandatory appropriation (whether because of a change
to the special fund’s funding mechanism, changed economic
conditions, or some other cause). That is, in some future fiscal
year, the Education Trust Fund might accrue less than the $125
million that EC § 10-649(g) requires. In that event, the actual
distributions to the Financing Fund would be limited to whatever
amount was in fact available in the Education Trust Fund.
Although the amount disbursed would be less than the statute
10
Article XIX, standing alone, does leave significant discretion as to
how commercial gaming revenues are to be allocated. See Md. Const.,
Art. XIX, § 1(f). Here, however, we are not dealing with Article XIX
standing alone, but with a statute that takes a specific, fixed dollar
amount of the funds under Article XIX’s overall umbrella and dedicates
them to a particular purpose.
212 [107 Op. Att’y
contemplates, there would still be no discretion as to the amount to
include in the budget.11
Thus, in our view, EC § 10-649(g) establishes a mandatory
public-school appropriation protected by Article III, § 52(4), (6),
(11), and (12). That means the Governor must include the
mandated amount in the budget each year, and the General
Assembly may not reduce or re-allocate it through the budget
process.
2. The Governor’s Budget Administration Powers
From our conclusion that EC § 10-649(g) establishes a
mandatory appropriation for the public schools, it also follows that
the Governor could not reduce or divert the § 10-649(g)
distribution by exercising the budget reduction and budget
amendment powers under SFP §§ 7-213 and 7-209. The budget
reduction power, which allows the Governor to reduce an
appropriation by 25% with the consent of the Board of Public
Works, does not apply to “an appropriation for . . . public schools.”
SFP § 7-213(b)(2)(ii). Although we have advised that this statutory
exception does not protect every public-school appropriation, it
does protect public-school appropriations (like this one) that are
mandatory in the constitutional sense. Letter from Jack Schwartz,
Chief Counsel, Opinions & Advice, to William S. Ratchford, II,
Director, Department of Fiscal Services, at 4-5 (Oct. 2, 1991); see
also 65 Opinions of the Attorney General 45, 49 (1980)
(recognizing that General Assembly could, by statute, authorize
Governor to reduce mandated appropriations “except, of course,
those given constitutional protection by [§ 52(6)]”).
Similar reasoning applies to the budget amendment power,
which allows the Governor to transfer funds among programs
within a unit or, in certain circumstances, between units. See SFP
§ 7-209. The General Assembly delegated that power to the
11
To be sure, the question of how to deal with a shortfall in the
Education Trust Fund would be more difficult if the General Assembly
had not (during this past session) specified an order of priority for
disbursements from the fund, or if the General Assembly had established
multiple mandatory appropriations drawing from the fund. But neither
of those problems exists here, so we need not decide how those scenarios
would be handled. Disbursements for Built to Learn Act debt service are
the first priority use of the Education Trust Fund, see 2022 Md. Laws,
ch. 32 (codified at SG § 9-1A-30(d)), and we are not aware of any other
mandatory appropriations that expressly draw on the Education Trust
Fund.
Gen. 196] 213
Governor under Article III, § 52(13), which allows the Legislature
to “enact such laws not inconsistent with [the Budget Amendment],
as may be necessary and proper to carry out its provisions.” See 72
Opinions of the Attorney General 3, 5 (1987). But because the
General Assembly could not alter a mandatory educational
appropriation in the budget bill, see Md. Const., Art. III, § 52(6), it
would be “inconsistent” with the Budget Amendment for the
Legislature to authorize the Governor to do the same thing by
statute, see id. § 52(13). In other words, given that the Governor
and General Assembly could not impair the EC § 10-649(g)
disbursement prior to passage of the budget bill, the Governor
cannot do the same thing later, in the exercise of the gubernatorial
budget administration powers.
3. The General Assembly’s Power to Amend Statutes
There are, however, other actions the General Assembly
could take to reduce the amount deposited into the Financing Fund
under EC § 10-649(g). Most obviously, the General Assembly
could amend or repeal § 10-649(g) itself. A mandatory
appropriation statute is still a statute, and the General Assembly
“cannot by ordinary legislation preclude the repeal or modification
of a statute by a subsequent legislature.” Letter from David W.
Stamper, Assistant Attorney General, to Sen. Thomas M.
Middleton, at 2 (Jan. 25, 2016) (citing cases); accord, e.g., Board
of County Comm’rs of Prince George’s County v. Donohoe, 220
Md. 362, 367 (1959). The rule is no different for the State’s
educational appropriation mandates, which the Legislature has
altered many times over the last century. See Hornbeck, 295 Md.
at 628-31 (discussing history of changes to State education funding
formulas).
We also see nothing in Article XIX that would override the
well-established rule that the General Assembly always has the
power to amend its own statutes. Article XIX requires that
“supplemental funding” derived from commercial gaming revenue
is limited to six educational purposes, including the maintenance,
renovation, and construction of public schools. See Md. Const.,
Art. XIX, § 1(f). But Article XIX says nothing to preclude the
Legislature from changing how the funds are allocated among
those six purposes. Accordingly, we think that the General
214 [107 Op. Att’y
Assembly could amend or even repeal § 10-649(g)’s funding
mandate through ordinary legislation.12
The General Assembly could also alter or eliminate the
§ 10-649(g) mandate for a single fiscal year, while leaving it in
place for future fiscal years, but only if it did so through the regular
legislative process rather than through the budget. Such one-time
alterations to mandates are commonly made through a Budget
Reconciliation and Financing Act or “BRFA,” see Wynne v.
Comptroller, 469 Md. 62, 71 (2020), which, despite the name, is
ordinary legislation and therefore not subject to constitutional
restrictions on the budget.
Similarly, because the General Assembly always retains the
power to amend its own statutes, it could also amend SG § 9-1A-27
to reduce the amount of commercial gaming revenue allocated to
the Education Trust Fund, even if that would put the State’s ability
to comply with EC § 10-649(g) at risk. Currently, SG § 9-1A-27
provides for specified percentages of the gross revenue from video
lottery terminals to be carved off for a variety of purposes and
leaves “the remainder to the Education Trust Fund.” SG
§ 9-1A-27(a)(9). But because the exact allocation is established by
statute, not in Article XIX, the General Assembly could adjust the
12
We considered whether such a change would raise questions under
the United States Constitution, but we do not believe that it would. The
U.S. Constitution forbids States to make any “Law impairing the
Obligation of Contracts,” including contracts where the State is a
party. U.S. Const., Art. I, § 10; U.S. Tr. Co. v. New Jersey, 431 U.S. 1,
17 (1977). Here, though, the State has made no contractual promise that
would preclude it from repealing § 10-649(g). Although any money
already deposited into the Financing Fund is pledged, by contract, to the
Built to Learn Act bondholders, see EC §§ 10-631, 10-634, nothing in
the relevant contracts requires the State to continue making deposits into
the Financing Fund. Indeed, each Built to Learn Act bond “shall state
on its face” that the bonds are “not a debt, liability, or pledge of the faith
and credit or the taxing power of the State . . . or any other governmental
unit” and are “payable solely from money pledged by the Authority” for
Built to Learn Act debt service “or money made available to the
Authority for that purpose.” EC § 10-649(d). A statutory amendment
reducing or eliminating payments into the Financing Fund thus would
not impair any contract between the Authority and the bondholders. See,
e.g., City of Charleston v. Public Serv. Comm’n, 57 F.3d 385, 392-93
(4th Cir. 1995) (explaining that Contract Clause analysis looks to
“whether the abridged right is one that was ‘reasonably relied’ on by the
complaining party”) (citation omitted); Stark v. Comptroller, 78 Md.
App. 599, 612-13 (1989).
Gen. 196] 215
allocation by amending the statute, thereby reducing the flow of
money to the Education Trust Fund.
Indeed, Article XIX vests at least some discretion in the
General Assembly to decide how to allocate the funds flowing from
commercial gaming. The Article’s text recognizes that not all
revenues derived from commercial gaming must be devoted to
public education. Section 1(c)(1), for example, authorizes the State
to issue video lottery terminal licenses for the “primary purpose”—
i.e., not necessarily the exclusive purpose—of raising revenue for
education. Meanwhile, § 1(e) allows the State to authorize
additional forms of commercial gaming if approved by a
referendum, but it does not specify how any revenues raised from
those additional forms of gaming must be used. Section 1(f), added
in 2018 by the “lockbox” amendment, in turn requires only that
“100% of revenues raised for public education under [§ 1(c)(1)],”
and “any other commercial gaming revenues dedicated to public
education,” be included in the Governor’s budget for educational
purposes. Md. Const., Art. XIX, § 1(f)(1)(iv) (emphasis added).
The emphasized language would serve no purpose if Article XIX
required all revenues raised under § 1(c)(1) and § 1(e) to be
dedicated to public education. See 97 Opinions of the Attorney
General at 64 (recognizing that constitutional provisions should be
read to avoid making any language superfluous). This suggests that
only those funds specifically “raised for” or “dedicated to” public
education are restricted to educational purposes by § 1(f).
Article XIX’s history supports that understanding as well. At
the same 2007 special session that proposed Article XIX to the
voters, the General Assembly enacted what is now SG § 9-1A-27,
dividing the revenues to be raised under Article XIX among a
variety of purposes, many of them unrelated to education. 2007
Md. Laws, Spec. Sess., ch. 4. The framers of Article XIX thus
never expected that 100% of revenues raised under that
Constitutional provision would go to education. Further, by
placing the provision specifying the allocation of revenue in the
implementing statute rather than the Constitution itself, the General
Assembly expressed its intent to retain some power over the
allocation. See, e.g., 62 Opinions of the Attorney General 275, 285
(1977) (explaining that, in interpreting a constitutional amendment,
“the proceedings of the Legislature which proposed the
amendment” may “throw useful light upon the purpose sought to
be accomplished or upon the meaning attached to the words
employed”). Nothing in the history of the 2018 lockbox
amendment suggests an intent to disrupt this established
understanding whereby some portion of the money raised from
216 [107 Op. Att’y
commercial gaming could be dedicated to non-educational
purposes. See Hearing on H.B. 1697 Before the House Comm. on
Appropriations, at 39:00, 2018 Leg., Reg. Sess. (Mar. 8, 2018)
(statement of Del. McIntosh).
To be clear, however, the General Assembly’s discretion in
this area is not unlimited. Article XIX requires that the revenues
raised from video lottery terminals must be used “for the primary
purpose of raising revenue” for public education. Md. Const., Art.
XIX, § 1(c)(1). The ballot question that proposed Article XIX to
the voters also stated that Article XIX’s overall purpose was “to
fund education” and emphasized § 1(c)’s “primary purpose”
language.13 See 62 Opinions of the Attorney General at 285
(explaining that “the circumstances attending the adoption of the
organic law” are a relevant consideration in constitutional
interpretation); Romans Letter at 3 (considering ballot question
language in interpreting Article XIX). Thus, an amendment to SG
§ 9-1A-27 that reduced the flow of funds for education to such a
degree that funding education could no longer be called “the
primary purpose” of the State’s video lottery terminals would
conflict with Article XIX.14 We need not draw that line for
purposes of this opinion, however. For now, it is enough to observe
that, on one hand, Article XIX does not require the General
Assembly to dedicate 100% of commercial gaming revenues to
education or to maintain the allocation of revenues exactly as it
currently stands, but, on the other hand, there are some limits on
13
Supra note 1.
14
Article XIX, § 1(e), the provision under which table games are
currently authorized, does not contain the same “primary purpose”
restriction. However, given that the goal of Article XIX, taken as a
whole, was to fund education, see supra note 1, a question remains as to
whether a similar restriction would nonetheless apply to revenue from
table games or any other type of commercial gaming authorized under
§ 1(e) rather than § 1(c). Indeed, when the General Assembly has
authorized referenda on expanding commercial gaming under § 1(e),
both the authorizing statute and the ballot question have generally
provided that the gaming expansions would be for the “primary purpose
of raising revenue for education.” See 2012 Md. Laws, 2d Spec. Sess.,
ch. 1, § 6 (table games); 2020 Md. Laws, ch. 492, § 5(a) (sports
wagering). This could mean that the General Assembly has understood
the “primary purpose” restriction in Article XIX to apply to all
commercial gaming revenues raised under Article XIX, not just video
lottery terminal revenues. Alternatively, it could mean that the General
Assembly has decided to apply the “primary purpose” limitation as a
policy judgment, even where the Constitution does not require it. Again,
we need not answer that question here.
Gen. 196] 217
the ability of General Assembly to reduce the flow of video lottery
terminal revenues to educational purposes.
B. Other Funding Under Article XIX and SG § 9-1A-30
Your second question is “whether the funding required by
Article XIX, § 1 of the State Constitution can be reduced by the
Governor or the General Assembly, or [can] be re-allocated for a
purpose other than as set forth in SG § 9-1A-30.” As long as EC
§ 10-649(g) remains in effect, our answer to your second question
is the same as our answer to your first. That is, whatever the
Governor and General Assembly may be empowered to do, or may
choose to do, with any of the remaining funds raised under Article
XIX, the amount specified by § 10-649(g) must be deposited from
the Education Trust Fund into the Financing Fund, because
§ 10-649(g) establishes a mandated appropriation for the
maintenance of the public schools. If the Education Trust Fund
ever contains less than § 10-649(g) requires—either because
commercial gaming revenues themselves have declined, or because
the General Assembly has altered the allocation of revenues under
SG § 9-1A-27—whatever amount the Trust Fund does contain
must be deposited into the Financing Fund. See 2022 Md. Laws,
ch. 32 (codified at SG § 9-1A-30(d)).
But if the General Assembly were to repeal EC § 10-649(g)—
or to amend it by regular legislation, such as a BRFA, so that its
requirements do not apply in a particular fiscal year—nothing
would require the Governor or the General Assembly to deposit
any particular amount in the Financing Fund.15 Article XIX only
requires that commercial gaming revenues “raised for public
education” or “dedicated to public education” (which, under the
current statutory scheme, effectively means commercial gaming
revenues deposited into the Education Trust Fund) must be used
for one or more of six broad purposes, and that the funds be
“supplemental” to the requirements of the Bridge to Excellence
funding formulas. Md. Const., Art. XIX, § 1(f). Assuming the
absence of a mandatory appropriation like that found in EC
§ 10-649(g), we see nothing in Article XIX standing alone that
15
We assume that, if the General Assembly were hypothetically to
repeal or amend § 10-649(g), it would also make a corresponding change
to the language enacted at the 2022 session establishing § 10-649(g)
deposits as the first priority use of money in the Education Trust Fund.
See 2022 Md. Laws, ch. 32 (codified at SG § 9-1A-30(d)). To do the
former but not the latter would create significant confusion, given that
the new language in SG § 9-1A-30(d) explicitly presumes the
effectiveness of § 10-649(g).
218 [107 Op. Att’y
would prevent the Governor from budgeting the entire balance of
the Education Trust Fund for, say, “high-quality early childhood
education programs,” Md. Const., Art. XIX, § 1(f)(2)(ii), and none
for school construction or construction-related debt service.
To summarize, then, if EC § 10-649(g) remains in effect, the
stream of funds to the Financing Fund is protected. But if
§ 10-649(g) were repealed or amended, the amount of further
deposits into the Financing Fund, if any, would be a matter for the
Governor’s and General Assembly’s discretion.16
C. Priority of Disbursements from the Education Trust Fund
Your third question is “what funding priority, if any, applies
to the funds in the Education Trust Fund.” As discussed above, the
General Assembly answered that question by enacting Chapter 32
of 2022, which provided that the required distribution of funds
under § 10-649(g) is the first priority for the use of Education Trust
Fund money. 2022 Md. Laws, ch. 32 (codified at SG
§ 9-1A-30(d)).
The same legislation provided that the second priority is
“required funding . . . through continuation of” Bridge to
Excellence—i.e., the State’s previously existing educational
funding formula—and the third priority is “supplemental funding
for education and public schools.” Id. The second and third
priorities are based on language from a prior version of the statute.
See 2022 Md. Laws, ch 32. It is possible that this second priority
might no longer have any practical effect, given that the Bridge to
Excellence formulas are themselves no longer in effect. But it is
not necessary to resolve that conundrum to answer your question,
because the statute makes clear that Built to Learn Act debt service
is the first priority for the use of money in the Education Trust
Fund.
16
For purposes of this opinion, we need not decide all questions
concerning how Article XIX standing alone divides power between the
Governor and the General Assembly. For example, we do not decide
whether, absent a statutory mandate like EC § 10-649(g), the General
Assembly may “strike out or reduce” the Governor’s proposed
appropriations from the Education Trust Fund. Md. Const., Art. III,
§ 52(6); see Romans Letter (concluding that the General Assembly does
retain that power). To answer your question, it is enough to conclude
that, in the absence of an appropriation mandate, whether to continue to
fund the Financing Fund would be left to the budget process.
Gen. 196] 219
III
Conclusion
In sum, § 10-649(g) of the Built to Learn Act establishes a
mandated appropriation for public education which is protected by
Article III, § 52(4), (6), (11), and (12), of the Constitution. The
Governor accordingly must include the amount specified by
§ 10-649(g) in each year’s budget, as an appropriation from the
Education Trust Fund, and the General Assembly may not strike,
reduce, or reallocate that appropriation in the budget. Nor may the
Governor use the budget reduction or budget amendment power to
reduce or divert the appropriation that § 10-649(g) requires.
However, the General Assembly retains the power to amend
or repeal § 10-649(g) itself, and thus retains the power to eliminate
the mandate permanently or during a particular fiscal year. The
General Assembly may also have some discretion to reduce the
flow of commercial gaming revenues into the Education Trust
Fund by amending the statute that governs the distribution of those
revenues, though that discretion is constrained to some degree by
Article XIX. And if the General Assembly were to repeal or amend
§ 10-649(g), nothing in Article XIX standing alone would require
the Governor or the General Assembly to appropriate funds for
Built to Learn Act debt service. Finally, the mandatory annual
distributions for Built to Learn Act debt service are, by statute, the
highest priority use of money in the Education Trust Fund.
Brian E. Frosh
Attorney General of Maryland
Thomas S. Chapman
Assistant Attorney General
Patrick B. Hughes
Chief Counsel, Opinions and Advice