‘Maintenance of effort’ law raises concerns at budget time -- Gazette.Net


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Montgomery County officials are feeling handcuffed by a state mandate on school funding.

On March 17, County Executive Isiah Leggett (D) submitted a proposed operating budget with $2.164 billion in state and federal money for Montgomery County Public Schools.

The school system would receive $1.502 billion from the county under Leggett’s proposal, $26 million more than what the state’s maintenance of effort law requires.

Since the mid-1980s, the law has forced counties to provide at least as much funding per student as the previous year.

Montgomery County often has been a leader in Maryland, traditionally funding the county schools above the minimum required.

Montgomery’s success has been largely built on the strength of its school system, said former county executive Douglas M. Duncan, who is running for his old seat. He is competing against Leggett and Councilman Philip M. Andrews (D-Dist. 3) of Gaithersburg in a June 24 Democratic primary.

The state has created a major disincentive for counties to spend more than the minimum required, Duncan said.

He said the state should create incentives for counties that fund above maintenance of effort, rather than penalizing them for extra spending.

Andrews criticized Leggett’s proposal to go $26 million above maintenance of effort, saying it would burden future county taxpayers. It also would hamstring county executives and councils for coming budgets because the county will have to provide that money in coming years, as well.

Even maintenance of effort provides the county schools with a $54 million increase, Andrews said. That’s because funding is per pupil and Montgomery County’s enrollment is growing.

Until the state makes the maintenance-of-effort law more flexible and lets counties provide more one-time investments in education, the county should be fiscally responsible and not exceed it, Andrews said.

Leggett said he has no problem with the law in general, but doesn’t like the state automatically withholding any annual increase in education aid from counties that don’t fund the necessary amount.

The law creates more of a “mental ceiling” for lawmakers by creating second thoughts on education funding decisions, said County Council President Craig L. Rice (D-Dist. 2) of Germantown.

Even though officials might strongly support education money, they have to be cautious about future budget implications, he said.

The difference lies in the rules that require counties to provide the same amount of per-pupil funding. Unless a county’s student population decreases, it faces constantly increasing costs for education.

If the county gives its Parks Department more money one year for staff training, it doesn’t have to worry about being locked in the following year, he said.

Costs for a school system, such as pay increases and fuel and utility costs, continue to rise even if funding is limited to the MOE level, said Larry Bowers, chief operating officer for Montgomery County Public Schools.

The “ceiling” argument never came up until the recession hit, even though the law had been in effect for 25 years, he said.

“That’s what waivers are all about. That’s what the waiver process is all about,” Bowers said.

The state lets counties ask the State Board of Education for waivers if their ability to meet the requirements are temporarily impaired or if the county and the local board of education reach an agreement to reduce recurring costs.

It also lets counties request that their baseline for determining MOE funding be “re-based,” or permanently reduced, if the county can prove that its ability to meet MOE has been permanently affected.

Kent and Wicomico counties sought waivers in fiscal 2013, citing damage to their local economies caused by the recession. Both counties ultimately withdrew their waiver requests before the state board made a decision.

Leggett said Montgomery County got waivers for budgets that went below maintenance funding for fiscal years 2011 and 2012.

A majority of the state board approved Montgomery’s request for a fiscal 2011 waiver, citing a $4.6 billion loss in the county’s taxable income base.

The decision acknowledged Montgomery’s “consistently high-level funding in excess of the MOE target, in comparison to other counties” as one factor.

Councilwoman Nancy Navarro (D-Dist. 4) of Silver Spring, a former school board member, said some counties undoubtedly need a mandate to ensure proper funding.

But a one-size-fits-all approach can be problematic, and the state law should create a natural tendency to invest in education rather than just looking at funding levels, she said.

The question should be whether school systems are achieving goals or just adding more money for programs that aren’t effective, she said.

“We’re not really getting down to what ‘effort’ means,” Navarro said.



rmarshall@gazette.net