Maintenance of Effort Waiver Granted

Because the County Government went below $137.7 Million + $19.7 Million in funding the specified legally-mandated Maintenance of Effort budget that the Board of Education proposed, it needed a waiver so that MCPS wouldn't get slapped with a penalty the following year.

After MCPS and the County Government came to a budget reconciliation agreement last week, the Maryland State Board of Education just voted 7-5 to grant MCPS the Maintenance of Effort Waiver for FY11 and not give MCPS a $51.3 Million penalty next year.

Md. General Assembly waives $23 million Montgomery education fine

Schools fine waived

Washington Post

Michael Birnbaum

The Maryland House of Delegates voted 130 to 5 Thursday to waive a $23.4 million fine that had been levied against the Montgomery County public schools this year because the county failed to meet minimum levels of education spending in the 2009-10 fiscal year.

A similar bill passed the Maryland Senate last month, and though some procedural steps remain before the change becomes final (the Senate and the House have yet to pass identical bills), school officials are breathing easier.

The bills waive the minimum spending levels, called "maintenance of effort," for the current fiscal year, and therefore eliminate the penalty associated with the County Government not fulfilling those requirements.

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The possible $23.4 Million cut to FY 2009-2010 has now been resolved and MCPS will not have to make them.

County Government Gap Now $761 Million

The County Government deficit is now at $761 Million from the previous $608 Million - an increase of 25%. We can only imagine what can happen to the school system budget now. This comes to us after the Governor's recent cuts and the large snow storm that devastated our region. The following is from County Council President Nancy Floreen's March Newsletter:

This week we met with the County Executive for a fiscal update that set the stage for the upcoming budget season. I have been advocating for communication and collaboration between the executive and legislative branches, and I thank the County Executive and his staff for providing an extensive preview into his upcoming budget. By law, the County Executive transmits his proposed budget to the County Council on March 15. We hold hearings and work sessions, and then we pass a final budget at the end of May. The budget takes effect on July 1.

We knew the news would not be good. Our last fiscal update projected a gap of $608 million for FY11. Now, because of decreases in state aid, fees and taxes, the gap has grown to $761 million. The biggest contributing factor is the unprecedented 15 percent drop in income tax revenue as a result of decreases in both the number of taxpayers and the incomes of those taxpayers. The snowstorms also took a big bite.

In anticipation of next year's budget crisis, County government already has instituted a hiring freeze and a procurement freeze. We have liquidated selected outstanding contracts and slashed spending across the board.

Still, the County Executive told us today his budget will aim to reduce public safety, health and human services, and transit spending by seven percent. He plans to reduce spending in the remaining departments and agencies by 20 percent. The Executive made it clear that significant layoffs, furloughs and service reductions likely will be required.

Although the details of the proposed budget won't be available until March 15, I appreciate the advance information.

Md. Senate passes bill that would waive $23 million Montgomery education fine

By Michael Birnbaum

A bill that would waive a $23 million penalty levied against Montgomery County public schools passed with overwhelming support in the Maryland Senate on Friday.

The fine has been hanging over the state's largest school system for months. The district was penalized for failing to meet state requirements for minimum levels of education spending during the 2009-10 fiscal year. But educators and politicians have questioned the wisdom of the fine at a time when school systems are facing deep cuts because of the economy.

The bill was approved on a 43 to 3 vote. The Maryland House must now take up the issue, which waives the minimum spending levels, called "maintenance of effort," for the current fiscal year.

Counties across the state are planning next year's budgets and are facing the same issue. Legislation has been introduced that would waive next year's minimums as well, but no votes have been taken.

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If this passes in the House and the Senate, MCPS will not have to make $23 Million in cuts this year.

$23.4 Million MOE Fine

On January 29, the State Board of Education upheld the State Superintendent's decision that Montgomery County did not meet Maintenance of Effort for FY 2009-2010 (this current school year). The State Board has thus fined Montgomery County $23,422,297 for the upcoming year. As you'll recall, the Montgomery County Government tried to shift debt onto the MCPS Budget and say that it was fulfilling its duty of funding the MCPS Budget.

Shortly after, the County Executive and County Council President issued this statement:

“We are disappointed in the State Board’s decision to withhold $23.4 million of State education aid from Montgomery County’s schools over the Maintenance of Effort issue.

“From the start, Montgomery County and the Montgomery County Public Schools have, together, pointed to the County’s long history of funding our schools far in excess of State Maintenance of Effort requirements. Together, we presented a waiver request for this one year that both fully funded MCPS’s educational program and preserved other critically needed services for County residents. We emphasized the challenges posed by the sharp economic downturn as a clear justification for a waiver.

“Last May the State Board of Education rejected that waiver request. Now, eight months later, today’s decision would severely impact our County’s schools.

“We will continue to work with the Governor and members of the General Assembly to right this wrong.”

What does this mean? It means that $23.4 Million in cuts will have to be made in the current school year because we simply will not be receiving the money. These will be on top of the $32 Million in cuts already asked for by the County Executive and the County Council. Hopefully, the Montgomery County Delegation will be able to pass the legislative fix to this penalty so that we do not have to see further reductions.

MC 14–10: Montgomery County – Maintenance of Effort Waiver

Remember that big fine that MCPS was looking at facing for not complying with the Maintenance of Effort law? It looks like the Montgomery County Delegation is taking up a bill so that MCPS would not have to pay $46 Million out of pocket right in the middle of the year. The bill's title is MC 14-10: Montgomery County - Maintenance of Effort reproduced for your viewing pleasure:

FOR the purpose of waiving the maintenance of effort provisions in law for a certain fiscal year for Montgomery County; making this Act an emergency measure; and generally relating to the maintenance of effort requirement of Montgomery County.

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, That:

Notwithstanding any other provision of law, for fiscal year 2010 only, Montgomery County is not required to comply with the maintenance of effort provisions of § 5–202(d) of the Education Article.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency measure, is necessary for the immediate preservation of the public health or safety, has been passed by a yea and nay vote supported by three–fifths of all the members elected to each of the two Houses of the General Assembly, and shall take effect from the date it is enacted.

PS: Keep sending in your pictures guys!

Maintenance of Effort: What's that all about?

If you guys are up-to-date on local news, you’ll know that there’s currently a storm brewing about this thing called Maintenance of Effort (MOE). A lot of people are angry and frustrated at the county and state level. Meanwhile, people are waiting for MCPS to continue on schedule with the Capital Improvements Plan (construction budget) and all their programs (The picture is from a recent hearing on Boundaries and Facilities), and you can't really blame them for wanting a better education.

So what is it? MOE is a state law designed to discourage local county governments from reducing their funding for public education. Every year, county governments have to spend at least the same amount per student on public education as they did the past year. This means that if there are more students, you’ll get extra money (inflation doesn’t count). In other words, if you spend $10,000 on each student in 2009, the county has to spend $10,000 (or more) on each student in 2010 or the county can lose a lot of money for education that comes from the state every year.

So what’s the big deal? Well, Montgomery County didn’t pass MOE this year. Basically, because of the economy, the county is getting less money. Since the County Government pays for MCPS’ budget, MCPS said, “Okay, just for this year, since the economy is so bad, we’ll take $79 Million below MOE” and the entire county government asked the State Board of Education to waive the MOE requirement this year.

But the State Board said “No”. What happened next was the county decided to charge the MCPS budget for $79 million in school construct debt – which the county usually pays. So it would be “added” back into MCPS’ budget. The Attorney General said this was not allowed and illegal because the law says that “program shifts between a county operating budget and a county school operating budget may not be used to artificially satisfy the requirements”.

Now, the county could lose between $16 Million and $64 Million in a penalty because the County Government failed to pay for MCPS. Wait, what? Yeah, so the law says that if the county doesn’t pay for education, the state won’t either. Weird, isn’t it? So we, as students, get less money from the State because the County paid less money.

While it’s true that the county council did pay over MOE in past years, so did all the other counties in Maryland. Montgomery is one of three counties in the entire state to not meet it this year. And this is actually the first time ever since the law was written that this has happened. MOE was expected to be the bare minimum for education.

So that’s where we are in terms of this issue. I can't really say what this means for the budget next year, but I'll tell you something: it's not good. Meanwhile, like the picture shows, people still want their programs and their school construction on time.

I could say a lot of things here, but I'll leave it to Helen Lovejoy from The Simpsons:

For more information (MCEA, SEIU 500, MCAAP FAQ): http://www.mediafire.com/?fqezrcg2gyg