Council to Host Forum on Key Budget Issues

We will host a unique opportunity for the public to comment and ask questions on priorities relating to the Fiscal Year 2014 County operating budget planning process on Thursday, November 29 at 7:30 p.m. The 90-minute session will include a presentation on the challenges that the Council and County Executive will face in formulating a balanced budget for the fiscal year that will begin on July 1.

County departments are already working on early stages of the FY14 budget. The County Executive is required to present his recommended budget to the Council by March 15. The Council and its committees will analyze the recommendations, make adjustments and adopt the budget by late May.

The FY14 budget process will be significantly impacted by recent changes in State law regarding K-12 public education funding. The changes have added a layer of complexity to the County’s budget deliberations and fiscal outlook as the Maryland General Assembly recently amended the Maintenance of Effort law that governs local education funding and shifted a large portion of the cost of teacher pensions to the County.

The County’s Office of Legislative Oversight recently analyzed how continuing economic pressures and the recent changes in local school funding requirements would affect the Council’s budgeting and fiscal planning in FY14 and future years.

The forum will be held in the Third Floor Council Hearing Room of the Council Office Building at 100 Maryland Avenue in Rockville and will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon). The broadcasts also will be streamed through the County Web site.

County Will Not Apply for Waiver of Maintenance of Effort

We have sent a letter to the State Board of Education concerning our unanimous decision not to apply for a waiver of the State’s Maintenance of Effort funding level for Fiscal Year 2012. The letter is signed by Council President Valerie Ervin and County Executive Ike Leggett and reflects our decision that we must take this step so that we can create a stable, sustainable future for our schools and all County agencies.

Our commitment to the County’s world-class school system is unwavering. The budget we expect to pass for the school system in FY12 will increase from last year’s amount, while the budgets of many County departments will decrease. Our goal is to protect classroom instruction while ensuring that scarce resources are available for all of our critical priorities – including safety net human services, public safety, and other vital parts of County government.

Our County has sought to reform the State Maintenance of Effort law to provide some modest flexibility in times of great fiscal crisis, particularly for counties like ours that have significantly exceeded Maintenance of Effort requirements over the last decade. These legislative changes were not adopted, and therefore we take this step to achieve an equitable and sustainable future for our community.

Council Counters Legal Challenge from County Board of Education

The Montgomery County Council will vigorously defend its authority to balance the County operating budget equitably between the public schools and other vital services. That’s why the Council sent a letter to Montgomery Board of Education President Christopher Barclay asking board to withdraw its Petition for Declaratory Ruling with the State Board of Education and avoid the potential for litigation. I've included the full text of the letter at the bottom of this post.

Montgomery County’s Board of Education filed a Petition for Declaratory Ruling with the Maryland State Board of Education on March 2 seeking an order that would interpret the state’s Maintenance of Effort school funding law to effectively eliminate the County Council’s ability to equitably balance the County operating budget.

The voter-approved County Charter assigns final budget and appropriation authority over all County-funded agencies, including Montgomery County Public Schools (MCPS), to the County Council.

The state educational Maintenance of Effort law requirement for Fiscal Year 2012 would force the County to increase the MCPS budget by $82 million (or 5.8 percent) above last year’s approved funding of $1.4 billion, even though the County faces a $300 million gap in its overall budget. This law ignores the fact that over the last decade the County has funded MCPS at a total of $577 million above the annual Maintenance of Effort requirements.

While we all agree with the intent of the law, it allows no flexibility during a fiscal crisis. We have always supported education, and we always will. We also support the other services funded by Montgomery County. Many of those include services for children outside of school.

This year Montgomery's operating budgets for police, fire, libraries, safety net and other core County services were reduced by levels not seen in more than 40 years, some by more than 20 percent. The coming fiscal year promises more of the same. We need the Board of Education’s help in balancing the budget in a way that preserves core services and does not adversely impact classroom instruction.

We’re all Montgomery County residents, and we’re all in this together. We will continue to work with the Board of Education and other stakeholders as we move through the budget process and as we strive to meet the needs of our nearly one million residents.

Here’s the full text of the letter:

Mr. Christopher S. Barclay, President
Montgomery County Board of Education
Carver Educational Services Center
850 Hungerford Drive, Room 123
Rockville, MD 20850

Dear Board President Barclay,

I am writing to express the Council’s extreme disappointment with the Board’s latest legal maneuver to challenging our budget and appropriation authority in the County Charter. The Council will vigorously defend its authority and responsibility under the Charter to balance the County operating budget equitably between the public schools and other vital services.

The Council regrets that you did not consult with any of its members or even notify us about the Board’s March 2 filing for a Petition for Declaratory Ruling with the Maryland State Board of Education. Seeking this order, at a time when we are all attempting to work collaboratively to solve our budget crisis, is a wasteful distraction. It will divert scarce tax dollars to cover MCPS’ legal fees when all our resources are needed to provide direct services to our students and residents.

The voter-approved County Charter assigns final budget and appropriation authority over all County-funded agencies, including MCPS, to the County Council. As we have in the past, we will balance the needs of our students, other County service recipients, and taxpayers in adopting an operating budget that is fair to all. Despite your unprecedented legal action, this Council is committed to balancing the school budget in a way that does not adversely impact classroom instruction.

My hope is that we can continue to collaborate on issues that affect education and that you will roll up your sleeves with us to do what is required to help us equitably balance our operating budget for all of our residents. Montgomery County residents deserve no less from their elected officials. We request that you start by withdrawing your Petition for Declaratory Ruling.

Sincerely,
Valerie Ervin Council President

c: Shirley Brandman, Vice President
Philip Kauffman
Judith Docca
Laura Berthiaume
Patricia O’Neill
Michael A. Durso
Alan Xie

County Gets Maintenance of Effort Waiver

The Maryland State Board of Education granted us a waiver of the State’s Maintenance of Effort law for Fiscal Year 2011. The law requires jurisdictions to appropriate at least as much money per pupil to its public schools as it did in the previous year.

Earlier in the day, I, along with Ike Leggett, Jerry Weast and Pat O’Neill presented a united front in requesting the waiver before the State Board.

We thank the State Board of Education for today’s decision that, in essence, recognizes the commitment Montgomery County has historically made to its educational system and also recognizes the drastic budget situation that has impacted our County over the past several years due to a variety of circumstances. No county in this state—in fact, few counties in this nation—have made as great of a financial commitment to education over past decades as has Montgomery County. That commitment will never be altered, and even in this most austere of years, more than 56 percent of our total combined agency expenditures will go to our public schools. We are pleased the State Board of Education has made a decision that is the right one for the children of Montgomery County.

Maintenance of Effort Waiver Denied

The State Board of Education denied our Maintenance of Effort waiver request with Board members Blair Ewing and Donna Hill Staton dissenting. This means the Council now must reconcile a $79 million budget gap as I indicated in my previous posts. I will continue to post budget information (right) as it becomes available so you can follow along. You can read more in The Gazette.

No Word on Waiver

Because we still have not received the State’s decision on our request for a waiver on the educational funding requirement under the State’s Maintenance of Effort law, we will not have sufficient information to take a straw vote on the budget on Thursday as originally planned. We likely will take the straw vote on Tuesday, May 19, with the final action still scheduled for May 21 if all goes well. There are a lot of moving parts at this time, so stay tuned.

The Maintenance of Effort law requires jurisdictions to appropriate at least the same amount of money per pupil from their own budgets as they did in the previous year, regardless of any additional funding that may be received from other sources such as the state or federal government.

Because we received additional federal and state aid for education, we believe we can reduce our local funding portion of the school system’s budget without going below the program level recommended by the Board of Education. This being an extreme year, we are hopeful the State will grant a one-time waiver of the Maintenance of Effort requirement so that we do not have to make extreme cuts to other programs. We expect to hear tomorrow (May 15).

If we do not receive the waiver, then we must provide additional funding to the school system. There will be no other option but to take the money from other parts of the government, so we’ll have to re-evaluate our earlier decisions or take some other dramatic action.

If we do receive the waiver, we will finalize the remaining details of the budget, including Reconciliation List items (those which have not yet been approved, but are recommended for approval if funding permits), on the same day as the straw vote.

Now it gets REALLY interesting.

Budget Timeframe Coming to a Close

We’re heading into the home stretch on our budget deliberations. As you can see from the Committee Budget Packets (links to the right), Council committees have considered a mountain of information, and now the full Council is looking at the committees’ recommendations. In accordance with our normal practice, we plan to take a straw vote on Thursday which will signal our intent for final action on the following Thursday, May 21.

Some big questions remain to be answered between now and then. Biggest among those questions is whether the State of Maryland will grant us a waiver on the educational funding requirement under the State’s Maintenance of Effort law. It is our hope that because of the County’s longstanding commitment to education and its history of making investments well above the required amounts, we are in good standing to receive the waiver, either totally or in part.

Although the State is not required to issue its decision until May 15, we’ve asked to get the decision early. If we do not receive the waiver, then we would be required by law to provide more funding to the public school system. The money necessarily would come from other parts of the government.

If you are interested in the budget, now is the time to pay close attention. Things can change quickly during what we hope is our last week of budget discussions. I will continue to post the budget packets to the right so you can follow along. And of course, it is not too late to let me know what you think.