Maryland's charter school law is also seen as a weakness. Although the state does not limit the number of charter schools, it is one of the few states that requires teachers at such schools to work under the union contracts in their districts. The state also does not provide charters access to any public funds for school buildings, which has made finding and renovating facilities a problem for charters. It has sometimes forced them to use some of the per-pupil funding they receive from the school districts to pay for buildings.
"I hope that this Race to the Top money can be used as leverage to bring about positive change to the charter school law in the state," said Dave Miller, director of the Maryland Charter School Network.
KIPP Ujima Village Academy, a charter that is one of the highest-performing schools in Baltimore, was forced to cut its staff and school hours after the Baltimore Teachers Union demanded that it conform to the union contract and pay its teachers 30 percent more than other city teachers who work shorter hours.
The school was one of three visited Friday by Duncan, Newt Gingrich and the Rev. Al Sharpton, who are touring districts around the nation to promote school reform. KIPP's leaders said Friday that if the pay matter is not resolved, they will leave Baltimore next year because they will not be able to operate effectively.
"This does have to get resolved, or KIPP will cease to exist in Maryland," said Jason Botel, KIPP Baltimore's executive director. "We're hopeful."
That problem illustrates the difficulty the state might have in persuading the teachers unions to accept some of the Duncan reforms and agree to concessions that might make their members uncomfortable.
The idea of using student data as a tool in evaluating teachers and principals is a sensitive subject for the union, said Dan Kaufman, the spokesman for the state's largest teachers union, the Maryland State Education Association. "There are still deep concerns from the union standpoint," he said.
Kaufman said the union has had initial conversations with the governor and state superintendent, but that now he expects more serious discussions to begin.
John Ratliff, director of policy for O'Malley, said, "We are trying to view this as a partnership, and there is still a lot of discussion around these issues."
Ratliff acknowledged that Maryland still needs to do "some heavy lifting" before it can produce a competitive application.
Baltimore Sun reporter Arin Gencer contributed to this article.