Here's a contrast mailer on education sent out by District 39 Senate challenger Saqib Ali against Senator Nancy King.
This is a more respectable piece than anything involving Disney characters, but we do have one observation on it. Ali says, "Saqib's tireless work also helped to save $23 million for Montgomery County Public Schools," and cites HB 223 2010, a bill to waive MoCo's $23 million maintenance of effort penalty. That bill was lead-sponsored by Delegate Sheila Hixson (D-20) and co-sponsored by MANY other Delegates, of whom Ali was just one. While HB 223 passed, so did SB 476 2010, which also waived the penalty. That bill was lead-sponsored by none other than... Senator Nancy King.
Showing posts with label Maintenance of Effort. Show all posts
Showing posts with label Maintenance of Effort. Show all posts
Friday, September 03, 2010
Ali's Education Contrast Mailer
Tuesday, May 25, 2010
MoCo Maintenance of Effort Waiver Approved (Updated)
Surprise, surprise! Our sources tell us that the State Department of Education has approved Montgomery County's FY 2011 Maintenance of Effort waiver request on a 7-5 vote. Wicomico County's waiver request was also approved. That means MoCo's statehouse delegation will not have to beg Big Daddy and Speaker Mike Busch for another bill canceling a state fine. Amidst all the budget gloom, this is a welcome bit of good news.
Update: The Gazette confirmed our report.
Thursday, May 06, 2010
Panhandlers of MoCo
Montgomery County is the Economic Engine of Maryland. The county accounts for one-sixth of the state’s population, one-fifth of its employment and tax receipts, one-fourth of its personal income and one-third of its business profit. So you would think that our economic might would make us the budget bosses of Annapolis, right?
Wrong. In terms of the state budget, we will have our hands out for years. We are, in fact, the Panhandlers of MoCo.
That status is a direct reflection of our budget problems. It is not merely because we need to close a nearly billion-dollar deficit in FY 2010, a gap that is so huge that not even massive furloughs could close it. It is also because our deficits are forecasted to be $500-700 million every year through at least FY 2016. State aid is of little help since the county’s relative wealth guarantees minimal returns on the tax dollars we pay to the state government. However, the “good news” is that if our economy continues to crater, we may actually get poorer and thus get more state money. Such is the nature of good news in bad times.
MoCo’s endless deficits are putting it on a collision course with the state’s Maintenance of Effort (MOE) law, which requires counties to at least match their prior year’s per-pupil local spending on schools to be eligible for state aid increases. MoCo asked for a waiver from MOE last year and was turned down by the State Board of Education. The state then ruled that MoCo’s attempt to comply with the rule was illegal and levied a $23 million fine against the county. MoCo’s state legislators were able to get the fine revoked, but the county - as well as other counties around the state – also wanted to loosen the process of getting waivers from MOE. An attempt to do that through legislation collapsed on the last night of the session due to “technical errors.” Those errors could wind up costing MoCo, and possibly other counties, tens of millions of dollars.
Here’s why. The county cannot afford its MOE requirement again and is applying for another waiver. But the process and the decision-makers who ruled against the county last year remain the same this year, so another denial should be expected. After all, State Superintendent of Schools Nancy Grasmick is mighty proud of Maryland’s number one public schools ranking and the last thing she wants is to let MoCo cut its school spending only to see the state’s rank fall. And so the county will be fined – again. And then the state legislators will have to get it revoked – again. And then the process will repeat – over and over again. This puts our delegation in a very bad position. What price will they have to pay to get these fines revoked? A teacher pension handoff? Big tax hikes that disproportionately hit the county? It won’t be pretty.
In the meantime, the Prince George’s state legislators did the unthinkable. When increases in relative wealth threatened to reduce their state aid, they got a wealth formula changed to give them the money anyway. As a result, County Executive Jack Johnson crowed about how the extra aid meant that his county might not have to apply for an MOE waiver. The irony here is that MoCo’s state legislators actually helped them change the formula. Now it is we, and not Prince George’s, that will be extending our empty cup to the Lords of Annapolis.
Maybe this time we should just take the fine. Even panhandlers should have some self-respect.
Tuesday, May 04, 2010
School Unions Hit Back on Furloughs
The three public school unions – MCEA, SEIU Local 500 and the Montgomery County Association of Administrative and Supervisory Personnel (MCAAP) – have written the County Council in opposition to the intention of some Council Members to spread furloughs to cover the school system. The council cannot mandate school furloughs, but it can cut the schools’ budget by an equivalent amount and leave it to the Board of Education and the Superintendent to figure out how to deal with the cut. Needless to say, this option is not favored by the school unions.
The three unions sent a joint letter to the council raising a number of logistical issues associated with furloughing school employees. Notably, they asked what would happen if the state denied the county’s newest Maintenance of Effort (MOE) waiver application. Would the fine be applied to the schools or to other parts of the budget? The unions also raised the question of whether furloughs are truly a way to deal with long-term deficits. Finally, the unions alleged that the county would not have to furlough anyone if it allowed Sunday sales at county-owned liquor stores and postponed restoring the rainy day fund to 6% of revenues by a year.
Our sense is that the council is rather united in asking for more cuts from the school system – an attitude reinforced by the schools’ consideration of legal options. The Management and Fiscal Policy Committee, which unanimously called for a “principle of equity” in furloughs, is comprised of union nemesis Duchy Trachtenberg as well as union allies Valerie Ervin and Nancy Navarro – both former members of the school board. If Ervin and Navarro are favoring furloughs in the school system, the school unions have nowhere else to go.
Following is the unions’ letter.
May 4, 2010
Ms. Duchy Trachtenberg, Chairperson
Management and Fiscal Policy Committee
Montgomery County Council
100 Maryland Avenue
Rockville, Maryland 20850
RE: Proposed Furloughs
Dear Ms. Trachtenberg,
Last Thursday, your committee voted (3-0) to support the “principle of equity” in proposed employee furloughs for next year, as illustrated by a Council staff option presented to the Committee. Council staff made clear that the Council does not have the authority to mandate furloughs within the Montgomery County Public Schools. It is the Board of Education that has the ultimate decision-making authority over how to operate the school system to best achieve its desired outcomes. The option presented by Council staff proposed a five day furlough of all county employees, including all MCPS staff, at a cost of $34 million to the school system.
We understand, as Committee member Valerie Ervin made clear, that the ultimate decision on the budget is in the hands of the Council members and not the Council staff. However the option presented to the Committee raises a number of questions about what it means to apply furloughs “equitably” and whether there is any such thing as an “equitable” furlough.
As we have made clear in recent discussions with Council President Nancy Floreen and Vice-President Ervin, we do not believe it is possible to do furloughs equitably, and we believe the Council should be working to avoid furloughing anyone in county government or the agencies. The County Executive presented a budget that saved only $15.1 million through furloughs. We believe the Council can make choices to find that $15.1 million elsewhere and avoid furloughing anyone.
Can Furloughs Ever Be “Equitable”?
We have a number of questions about the “five-days-for-all” scenario presented by Council staff to your Committee and what it means to be “equitable.” We would appreciate your responses to the questions below, so we can better understand the thinking of the Committee on what you mean by “equitable.”
1. What is an “equitable” formula for determining the allocation of furlough costs across agencies?
MCPS represents approximately 50% of the tax-supported county budget. Yet on the scenario, MCPS is identified for absorbing $33.7 million of the total furlough costs of $48.2 million – or 70% of the furlough costs. Is that equitable and if not, how would the formula be adjusted?
2. Should MCPS be treated differently from other agencies?
The Council staff scenario proposed that Montgomery College and the Park and Planning Commission be allowed to develop a furlough plan to absorb the budget reductions already recommended by the County Executive, but in contrast suggested that the $33 million cost of the furlough plan be an additional cut to the MCPS budget on top of the budget reductions already recommended by the County Executive. Is that equitable and if not, how would the formula be adjusted?
3. Is a “five-days-for-all” furlough plan equitable when employees have different work years?
Most county employees are paid for a full work year of 260 days. Most MCPS employees are only paid to work 195 days. Is a furlough plan equitable if it represents 2.6% of some employees annual income (5/195) but only 1.9% of other employees annual income (5/260) and if not, how would the formula be adjusted?
4. Is it equitable to furlough part-time employees who are already having their hours permanently reduced?
More than 5,000 MCPS supporting services employees are part-time workers. We recognize that up to 244 county employees in filled positions face possible layoff, if they do not qualify and avail themselves of the proposed retirement incentive program. In MCPS, rather than laying off employees, the Board’s proposed budget reduces the work hours for several hundred part-time employees, and does not include any retirement incentive program. Primarily para-educators and media assistants, these employees have already been notified of permanent reductions in hours that are cutting their annual income from an average of $23,000 to just $15,400 (based on a reduction from 6 hrs/day to 4 hrs/day). Is it equitable that they be furloughed on top of that, and if not, how would the formula be adjusted?
5. How can the Committee ensure equitable treatment of pension impacts?
At last week’s meeting, the MFP Committee also unanimously recommended support for Bill 18-10, designed to prevent any adverse impact of furloughs on the defined benefit pension plans covering approximately 4,750 of the county’s employees. Under this bill, the county would still make pension contributions based on the full annual salary of these employees, as if they had not been furloughed. In addition, any employees retiring in the next three years would have their pension benefit calculated as if they had not been furloughed. We agree this is the right thing to do. However within MCPS, the majority of employees are in a state-controlled pension plan - and one that is less generous than the County’s defined benefit pension plans. Therefore MCPS has no ability to provide similar pension protection to its employees if they are furloughed. How can furloughs across agencies be equitable if some employees will have their pensions impacted and others will not?
6. How can school bus drivers and cafeteria workers be furloughed without reducing the number of school days?
The Council staff memo asserts that school employees can be furloughed “without affecting instructional days or the classroom.” However, school bus drivers and cafeteria workers only work on days that are student instructional days. So we are unclear on how they can be furloughed unless schools are closed. The Council staff memo refers to vacation days as an option; however none of the approximately 19,000 10-month employees in MCPS get vacation days. So how would furloughs be equitably applied to school bus drivers and cafeteria workers?
7. When is a furlough just a pay cut?
A furlough is typically defined as a temporary layoff from work. When an hourly employee is furloughed, they work fewer hours. However when salaried employees are furloughed, there’s usually no reduction in work. If teachers were furloughed on grading days, wouldn’t they still be expected to complete grades? If they were furloughed during pre-service week, wouldn’t they still be expected to have their classrooms set-up and be prepared to teach on day one? If “furloughing” salaried employees is really just a reduction in salary with no reduction in work, isn’t that really just a pay cut?
Will additional savings from expanding furloughs be dedicated to reducing layoffs?
The scenario presented to the Committee by Council staff suggested expanding furloughs to save the County more than $48 million, compared to the $15.1 million in savings recommended by the County Executive. No one wants to see employee layoffs, just as we hope no one wants to see reductions in hours for part-time workers who are already low- paid. If the Committee decides to expand rather than reduce furloughs, will the additional savings be used solely to avoid layoffs, or will the added savings be used to reduce the proposed energy tax or build up the reserves?
Will the Council absorb the state penalty for failure to meet the Maintenance of Effort (MOE) requirement if the State Board of Education rejects reductions to the MCPS budget beyond the $137 million already proposed?
The State Board is scheduled to meet on May 25 to consider Montgomery County’s request for an MOE waiver based on the County Executive’s proposed $137 million reduction. If the Council imposes an additional reduction on MCPS in the name of furloughs, what will happen if the State Board rejects that additional reduction and withholds the $53 million in increased state aid already built into the proposed budget for MCPS? Will the Council absorb that additional shortfall, or is it your intent that MCPS would have to suffer that loss on top of whatever additional reduction the Council has imposed in the name of furloughs?
How Do Furloughs Help Solve the Long-Term Deficit?
Much has been made of the analysis that Montgomery County faces a long-term structural deficit. Addressing this will require difficult choices to bring projected revenues and projected expenses into line. The reality is that furloughs are not a solution to the long-term structural deficit. Furloughs are simply a one-time savings. Whatever is saved due to a furlough in FY11 has to be built back in to the FY12 budget – unless the intent is that it be a permanent pay cut for employees. Montgomery County needs solutions to the long-term structural deficit, not one-time quick fixes.
We understand that these are difficult times. We know that the shortfall in county revenue is real, and is deep. We know that vital county services all across the government and agencies are being reduced. By sacrificing their pay raises this year, and their pay raises and step increases next year, county employees across all agencies have collectively lost more than $281 million.
There Are Alternatives
Based on the most recent budget presented by the County Executive, the Council would only have to identify $15.1 million to avoid furloughs altogether. We believe that the Council could get there by doing the following:
1.Approval of the proposal to allow Sunday liquor sales is estimated to yield $1.5 to $2 million.
2.The County Executive originally proposed maintaining the County’s reserve funds at 5% of the budget for next year. In his most recent budget amendments, he realigned $36.6 million in order to increase the reserves to 6% next year. Instead, the Council could phase in restoration of the reserve by going to 5.6% next year and fully to 6% in FY12. Doing so would save an additional $14.6 million.
3. Combined, those steps would restore the $15.1 million needed to avoid furloughing anyone in the county.
We fully appreciate the concerns about maintaining Montgomery County’s AAA bond rating. However we are also mindful that the Fitch Ratings agency only stated a need to return to the county’s 6% reserve policy in FY12 – not in FY11. We also understand that these same rating agencies give Prince Georges County a AAA bond rating, despite their TRIM tax cap that so inhibits sound fiscal policy. And finally, we cannot help but point out that these are the same credit rating agencies that consistently gave AAA ratings to the credit default swaps and complex Wall Street derivatives that we now know were toxic junk and brought the country to the brink of economic collapse. Surely Montgomery County passes a much higher bar.
The Fitch Rating agency also said the following about Montgomery County in its most recent analysis:
“While reserves have declined, Montgomery County retains considerable flexibility…. A considerable and formidable economic base, anchored by the extensive presence of the U.S. government and expanding broadly into biotechnology, shows excellent prospects for continued expansion. Strong wealth and unemployment indicators underscore the county’s economic strengths.”
Given that strong assessment, there is little reason to believe that a phased restoration of the reserve (from 5% this year to 5.6% in FY11, to 6% in FY12) would put the County’s bond ratings at risk. Ultimately the County Council must make this decision. However given the emphasis that is being placed on ensuring that furloughs are “equitable”, we look forward to your responses to the questions outlined above, so we can better understand what the Committee means by equitable and what steps you would take to ensure that.
We look forward to hearing from you.
Sincerely,
Doug Prouty
President
MCEA
Merle Cuttitta
President
SEIU Local 500
Rebecca Newman
President
MCAAP
cc: County Council Members
Board of Education Members
Montgomery County Legislative Delegation
All Association Members
MCPS/Council Relationship Hits Bottom
Budget pressures and rumors of litigation have caused a considerable rift between the County Council and the Montgomery County Public Schools (MCPS) system. It is possible that the relationship between the two institutions has never been this bad.
All MPW readers know about the county’s nearly $1 billion deficit. That deficit has caused the Executive to recommend double-digit cuts to many county agencies, cuts which have grown due to new revenue writedowns. Among the county’s problems is its inability to meet the state’s Maintenance of Effort (MOE) law, which requires counties to match per-pupil local school spending in succeeding years to be eligible for state aid increases. The state ruled last year that Montgomery’s accounting technique of charging $79.5 million to the school system in debt service violated MOE, but the county’s statehouse delegation was able to get the resulting fine waived. The county cannot meet MOE once again and is applying for another waiver valued at $58-139 million. (The amount varies depending on whether the $79.5 million debt service charge counts towards last year’s local contribution to the schools.)
The county’s budget problems are bad enough. But what has the schools really on edge is that many on the County Council would like to cut the schools’ budget even more. Some argue that the Executive’s budget proposal gives the school system almost everything it wants while other agencies are taking massive cuts. The fact that the Executive exempted the school system and public safety workers from furloughs is another bone of contention as some agree with MCGEO that the pain is unfairly concentrated on a minority of the county workforce. The council’s Management and Fiscal Policy Committee, consisting of Chair Duchy Trachtenberg and Council Members Valerie Ervin and Nancy Navarro, just unanimously voted to spread furloughs across all agencies, including the schools. The problem is that the County Council cannot order the school system to implement furloughs; they can only cut the schools by an equivalent amount of money. A five-day furlough plan the council is considering would cost MCPS $33.7 million.
MCPS is resolutely opposed to furloughs for school employees. The Gazette and the Post reported that the school system is threatening to sue the County Council to prevent cuts over and above the Executive’s proposal. But neither story is completely accurate. The truth reveals even MORE bad blood between MCPS and the council than is implied by the Gazette and Post articles.
The school system consulted its legal counsel for advice on how to fight additional cuts. The schools’ attorney reviewed state law and found Education Title 5, § 5-102(c), which says the following about local school budgets that are forwarded to County Executives and then sent to County Councils:(c) Reduction by county executive.-
The school system’s lawyer believes this language prohibits the council from cutting the school budget below the level recommended by the Executive. The council’s attorney disagrees. The matter awaits the courts if a suit is filed.
(1) This subsection applies only to a county that has a county governing body that consists of a county executive and county council.
(2) The county executive shall indicate in writing which major categories of the annual budget of the county board have been denied in whole or reduced in part and the reason for the denial or reduction.
(3) The county council may restore any denial or reduction made by the county executive in the annual budget submitted by the county board.
MCPS wrote an in-house draft based on this legal theory, which it shared with the County Attorney. The County Attorney then shared it with the council, which leaked it to the Gazette and the Post despite discussion of the issue in a closed session. In contrast to the published articles, the school system never formally threatened litigation. Therefore, a lawsuit is not quite on the table – YET.
Both sides are now pointing sharp-clawed fingers at the other. The council believes MCPS is playing politics by evaluating legal justifications for a lawsuit. MCPS believes the council is playing politics by leaking a secret in-house legal draft. The council will not accept any limits on its authority to cut the budget. MCPS will not support any MOE waiver which exceeds the County Executive’s proposed cut. Neither side is prepared to budge.
Anyone ever get behind the wheel and play a game of chicken blindfolded?
Thursday, March 04, 2010
Dealing with Waivers
By Marc Korman.
On February 23rd the State Board of Education announced a process to allow school systems to receive a waiver from the requirement that they be open for 180 days. Here’s how I think the State Board of Education should determine what counties to grant waivers to.
State law sets the minimum length of the school year at 180 days or 1,080 hours (MD ANN CODE EDUC § 7-103 if you are interested in looking it up). Based on data collected last decade, only six states require a longer school year than Maryland: DC, Hawaii, Illinois, Kansas, Michigan, and Ohio. Of course, we have a shorter school than many other countries.
When there are unforeseen circumstances, such as three massive snow storms, it gets a lot more difficult for the schools to meet the requirement. During my Montgomery County Public Schools days, there were multiple years that days were tacked on to the end of the school year or the school day was lengthened to meet the legal requirement despite the snow. Montgomery County is actually better positioned than many others because it builds four excess days into the calendar in case of snow or other emergencies.
Given the weather pounding the state has endured, the state school board is allowing school systems to apply for a waiver from the requirement. State law says a local school board can submit an application describing “a demonstrated effort…to comply” with the requirement. The State Board is authorized to adjust the length of the school year, allow the school year to go beyond 10 months, adjust the length of the school day, or keep schools open on holidays. The impression the State Board has left is that they will allow a shortened school year.
Although waivers have not been approved yet, it appears that the State Board is showing an uncharacteristic amount of flexibility. It would have been nice if the State Board had acted this way when Montgomery County, no slouch in supporting public schools, sought a maintenance of effort waiver. But perhaps the Board learned that strictly applying rules with no consideration of extenuating circumstances or context does not make a lot of sense.
At the risk of angering school children everywhere, I believe when accepting waivers from the school day requirement, the School Board should ask for something in return. Both the Gazette and Washington Post reported on entrepreneurial teachers and students who used online discussion boards and email to continue teaching and learning during the blizzards. Although the assignments were optional, most students participated in the programs covered by the press.
When accepting waiver applications, the State Board should ask local school systems to report on the use of online education programs during the past few months, how good the participation was, and what steps are being taken to encourage those programs going forward.
There will be lots of kinks to work out. For example, although many students have online access at home, not everyone does. In addition, during the snow storm thousands of County residents lost power and could not participate in online activities even if they had an Internet connection. That may mean it will be impossible to require online work during school cancellations. However, schools should still be encouraging this type of innovative activity particularly when schools are closed for more than a day. Both teachers and students need that time.
The Board of Education can show some welcome flexibility and allow schools to shave days or hours off their requirement. But in exchange, they should be learning how school’s minimized the storm’s impact on education and how they will work to do so in future circumstances. New Internet based tools make those efforts much easier.
Tuesday, February 23, 2010
MoCo Budget Ugliness Never Ends
Have you ever encountered a cockroach that was almost as big as your foot? And upon stomping on the creature, the roach looked up at you and said, “Is that all you got?” This is how the County Council must feel about the budget. The County Executive’s office presented FY 2011 budget options to the County Council this morning, and crawling from the documents were some of the meanest, toughest and most revolting critters ever seen in Rockville.
The Executive’s fifteen page presentation contains some of the same sobering long-term numbers that cast an evil pall over Chief Administrative Officer Tim Firestine’s recent presentation to the Montgomery Delegation. Nothing has altered the Executive’s forecast of $500-700 million deficits stretching through FY 2016 and perhaps beyond. What is new is the massive deterioration of county finances in the coming fiscal year (2011), which begins on July 1. The Executive will soon be making his budget proposal and the council must decide which governmental limbs are to be chopped off by mid-May.
And there could be MANY limbs flying off the butcher’s table. Four items have swelled the FY 2011 budget gap:
Reduction in non-school state aid: $32 million
Reduction in fees, fines, permit and speed camera revenues: $42 million
Snow removal costs: $25 million
February revenue writedown: $55 million
The old deficit was a miserable $608 million. The new deficit will be an unimaginably apocalyptic $762 million. That’s about one-sixth of the county’s budget, folks.
So what can be done? The Executive has not formulated his proposal yet, but he has put some options on the table, including continuance of his $70 million mid-year savings plan, $42 million of capital budget cuts, deferral of retiree health paydowns, cancellation of any general wage adjustments and $100 million in further cuts to the non-schools part of the government. All of that cuts the deficit by more than half to a still-hefty $315 million.
But the Executive’s presentation causes us to read between the lines. In multiple budget options, the Executive exempts the schools because of the state’s Maintenance of Effort (MOE) requirement. The county ran afoul of MOE last year and was slapped with a $23 million fine. What the Executive is saying is that even with an extreme set of measures, the state’s MOE requirement still saddles the county with a gigantic budget deficit. The General Assembly is now considering a variety of bills that would make MOE waivers easier to get or even provide for an automatic statewide waiver next year. Both MCEA and the PTAs oppose any weakening of MOE. And so all of this could lead to an ugly battle in Annapolis as well as Rockville.
Even the cockroaches would avert their beady eyes from that!
Thursday, January 28, 2010
MoCo PTAs Support MOE Fine Waiver
The Montgomery County Council of Parent Teacher Associations (MCCPTA) has written the Montgomery County Delegation Chairs, Delegate Brian Feldman (D-15) and Senator Rich Madaleno (D-18), in support of a local bill that would waive Montgomery County's $46 million Maintenance of Effort (MOE) fine for this year's budget. But MCCPTA was careful to distinguish the narrow issue of the fine from discussion of a broader restructuring of the MOE law, which is currently the subject of a different bill. The Montgomery County Education Association (MCEA), also known as the "800-pound Gorilla of MoCo Politics," also supports waiving the fine but not altering the underlying MOE law. We reprint MCCPTA's letter below.
Senator Richard S. Madaleno
James Senate Office Building, Room 203
11 Bladen St., Annapolis, MD 21401
Delegate Brian J Feldman
House Office Building, Room 223
6 Bladen St., Annapolis, MD 21401
Dear Senator Madaleno and Delegate Feldman,
I am writing on behalf of the Montgomery County Council of Parent Teacher Associations (MCCPTA) to urge you to support MC 14-10, Montgomery County Maintenance of Effort Waiver. MCCPTA, with a membership of over 50,000 parents, teachers and students associated with Montgomery County Public Schools, adopted the attached resolution expressing support for this bill in our Delegates Assembly on January 26, 2010.
As an advocate for education in Montgomery County, MCCPTA firmly supports the principle of Maintenance of Effort (MOE) funding for Montgomery Public Schools and all public school systems in the State of Maryland. And we have been fortunate to have a County government that routinely supports our schools beyond the MOE level. However, the unique circumstance surrounding funding for MCPS for fiscal year 2010 has posed a special budgetary problem for Montgomery County. A mistake in the calculation of Maryland state aid for MCPS for fiscal year 2009 resulted in Montgomery County government having to provide a higher than usual portion of funding for MCPS in fiscal year 2009. When this mistake was discovered by the State of Maryland in planning for the fiscal year 2010 budget, the missing funds from fiscal year 2009 became available to fund the fiscal year 2010 MCPS operating budget. In addition, unanticipated federal funding became available, while local revenues fell off sharply. Montgomery County requested a waiver of the MOE requirements of fiscal year 2010, and the MCPS fiscal year 2010 operating budget reflects reliance on the reasonableness of this request. We are now half-way through fiscal year 2010. While MCPS has taken extraordinary measures to economize in light of even-worse-than anticipated revenue collections this year, the $46 million fine for the failure to meet the fiscal year 2010 MOE requirements would result in unacceptable gaps in the education funding for Montgomery County students.
I would like to emphasize that our support for this bill is based on the unusual school budget situation facing MCPS for fiscal year 2010. Our organization supports a one-year-only waiver of the MOE fine. MCCPTA appreciates your efforts on behalf of our children, and look forward to working with you in the future to ensure adequate funding of public education in Montgomery County.
Sincerely,
Kay Romero, President
Montgomery County Council of Parent Teacher Associations
Cc: Ms. Patricia O’Neill, President, Montgomery County Board of Education
Ms. Nancy Floreen, President, Montgomery County Council
Enclosure: Montgomery County Council of Parent Teacher Associations Resolution Adopted at the January 26, 2010 Delegates Assembly
Montgomery County Council of Parent Teacher Associations Resolution Adopted at the January 26, 2010 Delegates Assembly
MC 14-10, Montgomery County Maintenance of Effort for FY2010 Only
Whereas, Montgomery County is seeking a waiver of Maintenance of Effort provisions for FY2010; and
Whereas, the Maryland General Assembly is considering legislation to authorize the MOE waiver for FY2010; and
Whereas, the need for a waiver was derived from a funding shortage from FY2009 and paid in FY2010; therefore, be it
Resolved that MCCPTA supports MC 14-10, Montgomery County Maintenance of Effort for FY2010 only; and be it further
Resolved that this support is based on the unique circumstances for FY 2010’s funding arrangement, caused by the previous year’s erroneous shortfall in state funding; and be it further
Resolved that MCCPTA supports a stringent MOE policy for school funding based on FY2009 funding levels.
Friday, January 22, 2010
Grasmick's Drop-Dead Letter to MoCo
Yesterday, the Examiner reported that State Superintendent of Schools Nancy Grasmick denied County Executive Ike Leggett's request for reconsideration of the county's $46 million fine. Here is exactly what Grasmick has to say.
Wordy, isn't she?
Now look, folks. Grasmick has been quick to claim credit for the state's number one public schools ranking for the second year in a row. How did the state attain that ranking despite the presence of the schools in Baltimore City and Prince George's County within its boundaries? Could it be because of the Montgomery County schools?
A little respect, please. That's all we ask. Err, and $46 million too.
Monday, January 11, 2010
MCEA President: Teacher Pension Handoff "Unacceptable"
Following are the remarks of Montgomery County Education Association (MCEA) President Doug Prouty from the union's recent legislative breakfast, in which he brands any handoff of teacher pensions to the counties as "unacceptable." MPW readers who are not from Montgomery County should understand that the union's nickname here is "the 800-pound Gorilla of MoCo Politics," a title it has earned through repeated deployments of its fearsome Apple Ballot. Prouty also calls for adjusting per-pupil spending mandated by the state's Maintenance of Effort requirement for inflation.
Montgomery County Education Association, msea/nea
Annual Legislative Breakfast
Saturday January 9, 2010
MCEA Center for Leadership and Learning
Remarks of Doug Prouty, MCEA President
Good morning, and welcome to MCEA’s Annual Legislative Breakfast. This year’s event is a first in a couple of ways. This is my first Legislative Breakfast as President of MCEA. I was honored, and humbled, last spring to be elected MCEA President by our members. These are challenging times, and I take the responsibility of protecting and advancing the interests of our members – and of our schools and students – very seriously. I began my career in MCPS 14 years ago as a high school English teacher. But as a lifelong resident of Montgomery County and graduate of Montgomery County Public Schools, I have been a part of MCPS most of my life. Many of you may also remember my father – Keith Prouty – who was an activist and leader for social justice in our community for many, many years. He not only served as the chair of the NAACP’s Political Action Committee, but was also a consistent and vocal advocate for our schools; helping to found and lead the Education Political Action Committee back in the 1980’s and 90’s. I am committed to carrying on his legacy of leadership on behalf of the poor and working families of our community.
This is also the first MCEA Legislative Breakfast in our new conference center here at 12 Taft Court. Let me welcome everyone to our new home. The MCEA Board of Directors has made a major investment in the future of our organization, and we look forward to this facility being a resource for our members, and for the community, for many, many years to come. We have named our new conference center the “MCEA Center for Leadership and Learning” because we intend it to be a vehicle for just that: cultivating the lifelong learning and leadership development of educators.
This Legislative Breakfast is primarily a time for frontline educators to talk with our elected representatives about the needs in our classrooms and our schools. We are the 16th largest school system in the nation. All of us – from classroom teachers and school bus drivers, to school board members, county council members and members of the state legislative delegation, bear an awesome responsibility to do what is best for our children and their future. We want to share our collective priorities for education in the upcoming legislative session, and to reflect together on the state of public education here in Montgomery County and on what we must do to provide the best possible education for our 142,000 students.
Maintenance of Effort
The current debate over the state’s Maintenance of Effort requirements is one of the most important issues facing the public education community in the upcoming legislative session. Let me be perfectly clear – we do not believe that Maintenance of Effort is a “stupid” law. Quite the contrary. We believe that Maintenance of Effort is fair, appropriate, essential, and, in fact, not strong enough.
Maintenance of Effort (MOE) is the simple notion that if the state government increases its funding for local public education, that the local county government cannot then decrease its per-pupil spending. Increased state aid for education is expected to be spent on education, and not “supplant” local school funding dollars so county governments can spend the money on other priorities. There is nothing “stupid” about that.
Maintenance of Effort is actually a very low bar. If all a county did was meet Maintenance of Effort, over time it would be starving our schools. Maintenance of Effort makes no provision for the increased cost of goods and services: no provision for the increased cost of textbooks, energy to heat our classrooms, diesel fuel to run our buses, or cost-of-living adjustments for salaries to keep pace with inflation. Inflation has gone up 35% over the last ten years. Can you imagine how devastating it would be to our schools if all Montgomery County had done was simply maintain the same-dollar-per-pupil spending as it had ten years ago?
The point is simply that Maintenance of Effort should be a floor, and not a ceiling. It is indeed a very “low bar”, and simply exceeding Maintenance of Effort is hardly cause for celebration, or self-congratulation.
There is one part of the current Maintenance of Effort requirement that does not make sense- the provision that imposes a loss in state aid to a local school system as a consequence for a local county government not meeting Maintenance of Effort. This amounts to nothing less than punishing the victim. If a local county government fails to meet Maintenance of Effort, it is the county government that makes that decision – and not the school system – that should suffer any penalty. As the General Assembly considers changes to the Maintenance of Effort requirement, we very much hope that you will change this absurd situation so that the consequences of failing to meet Maintenance of Effort fall on those who make the decision, not on those who are already the victim of such decisions – our schools.
We are also supportive of the effort to enact a legislative waiver of any penalty on Montgomery County for the failure to meet Maintenance of Effort in the current fiscal year (2009-2010). As I just explained, to penalize our schools for a decision made by the county government is just wrong.
However, we strongly oppose any erosion of the Maintenance of Effort requirement. Some have proposed that if a county gets within 95% of Maintenance of Effort that should be good enough. Good enough is not- our kids deserve better.
Before the General Assembly acts to weaken the Maintenance of Effort requirement, I would suggest that it should – at the very least – adjust Maintenance of Effort to account for inflation. Maintaining per-pupil spending should be in inflation-adjusted spending, not just a fixed dollar amount. $10,000 in per-pupil spending in 2010 is a far cry from $10,000 in per-pupil spending in 1990. Changing Maintenance of Effort so that it is in inflation-adjusted dollars would be a much more honest standard for “maintaining local effort”. Let’s establish a more meaningful definition of Maintenance of Effort before we make it easier to get waivers.
State Budget
Clearly, the biggest issue facing the General Assembly in the upcoming session is the overall state budget deficit. I have yet to meet an elected official who did not proclaim their support for public education. But the real measure of the support is not what is said on the campaign trail, but rather what one does when times are tough. We understand that there will be difficult decisions ahead. The real friends of education will be those who are willing to make the hard choices so that support for our schools and our students is a top priority. We know it is not going to be easy. But our charge to you is to do all you can to protect and maximize state funding for our schools. We are counting on our delegation to ensure that Montgomery County does not bear a disproportionate share of whatever budget cuts are ultimately necessary.
Everyone here knows that Maryland’s schools have been rated the best in the nation. And I think we all know that Montgomery County’s schools are the best in the state. Neither we, nor our children, can afford to put that at risk.
State Funding of Teacher Pensions
An issue that is integrally related to the state education budget is continuation of state funding of the teacher pension plan. There are some in the legislature who want to shift future increases in the cost of teacher pensions to local governments. For them, this is the answer regardless of what the question is. It’s like a broken record.
As my predecessor, Bonnie Cullison, said last year, this is unacceptable. We applaud the bold statement made by our county executive, Ike Leggett, that this is a ‘line in the sand” that should not be crossed. In fact, we consider it a “line in cement” and one that cannot be rubbed out or washed away.
Let me take a moment to review some of the key arguments the Montgomery County delegation needs to be making in order to maintain state funding of teacher pensions.
• First, state funding of teacher pensions is one of the only state aid formulas that favors Montgomery County. A reduction in the state’s commitment will disadvantage Montgomery County disproportionately.
• Second, state funding of teacher pensions is a long-standing part of the complex balance between the state and local jurisdictions on both revenue and expenditures. It is simply unfair to pass these expenses back to the counties without also passing back revenue sources as well.
• Third, this isn’t a strategy for balancing the budget; it’s a strategy for passing the buck. Every single county would suffer. When there is a budget deficit, you have to either increase revenues, decrease expenditures, or both. Shifting the costs to somebody else doesn’t help to solve the problem.
• Fourth, this is a long-term solution to a short-term problem. We all recognize that our state – and our nation – face a serious recession. But like all recessions, we will get through it and the economy will recover. It is disingenuous to advocate for a long-term change in the relationship between the state and the counties as a solution to a short-term budget shortfall.
• Finally, it is simply unfair to force the counties to pay for a pension system that is controlled by the state. The state legislature determines the benefit formulas. The state pension board oversees both the administration of the plan and the investment of its assets. How can anyone argue that the counties should be expected to pay for a state-run program over which the counties have no control? As we have said before, the next thing you know the president of the state senate will be telling the counties they have to pay for the state police as well; after all – the crime occurs in the counties.
United, our delegation has the size, strength, and sophistication to block any budget that that deeply harms our county. Now you have the opportunity to show your true mettle. I would encourage each and every member of the delegation to go on record stating that they will not vote for any budget that includes any shift in funding for teacher pensions. Only then will the leadership understand that this cannot be a part of any package.
While the budget issues are foremost on everyone’s mind, there are three other, non-economic issues before the legislature this year that I would like to mention.
Public Employee Labor Relations Bill
For several years, we and the Maryland State Education Association have advocated for reform of the collective bargaining law that was first created 40 years ago for school employees. It is antiquated and needs to be updated to meet the challenges of today’s environment. Last year our own State Senator Jamie Raskin and Delegate Sheila Hixson introduced bills in their respective chambers to improve the processes for resolving labor management disputes. A much amended bill passed the Senate, but was unable to be brought back up in the House as the clock ran out of time at the end of the session. Senator Raskin, with the co-sponsorship of Chairman Mac Middleton will be resubmitting the amended bill, as will Delegate Hixson in the House. We have already spoken with most of our senators and delegates. And I am very pleased to report that virtually every single member of the Montgomery County legislative delegation has agreed to co-sponsor this bill. Thank you very much for your support.
BOAST Bill
The so-called Building Opportunities for All Students and Teachers (BOAST) Maryland Tax Credit bill is nothing more than a tax credit scheme that is a backdoor approach to providing vouchers to parents of students in nonpublic schools.
The research in Arizona, Illinois, and Pennsylvania shows that the greatest beneficiaries of such tax credit programs are wealthier tax payers and schools in middle and upper income neighborhoods. A study by the non-partisan RAND Corporation concluded that tuition tax subsidies rarely benefit poor children. It is families already attending private or religious schools that benefit the most. And as with vouchers, tuition tax credits provide funds to nonpublic schools without regard to the schools’ entrance policies. Some private schools do and would continue to deny entrance to certain students.
When facing a budget shortfall, the state cannot afford to lose revenue through a tuition tax credit that subsidizes private school tuition. We urge all of our legislators to continue to oppose this ill-conceived idea.
In Conclusion
We all have a challenging year ahead of us: whether it be the MCEA members here who face increasing demands every day to do more with less, or the elected officials who face the daunting task of figuring out how to fund the services our communities desperately need and cannot afford to lose.
I have already met and worked with many of the elected officials here today, and I look forward to getting to know all of you better in the coming months and years. During these challenging times, it is our ability to work together collaboratively that will lead to the best outcomes. Far too often, we see legitimate discussions over policy differences devolve into personal conflicts and political gamesmanship. My goal is to work with all of you: MCEA members, state legislators, county council members and board of education members, to put aside the personal and political agendas so that we can focus on how to best meet the needs of our students, our schools, and the thousands of dedicated, hard-working school employees who work miracles every day with our children.
Thank you all for coming out this morning, and for everything you do on behalf of our schools and our students.
MoCo Delegation Considers MOE Waiver Bill
The Montgomery County Delegation is now considering a local bill to waive the county's Maintenance of Effort (MOE) penalty for FY 2010. Since the bill is co-sponsored by five of the county's eight Senators and seventeen of the county's twenty-four Delegates, it will almost certainly clear the two-thirds hurdle required of emergency bills like this one. Its fate in Annapolis is another question, as it must be approved by the entire General Assembly.
Thursday, January 07, 2010
Miller Links Teacher Pensions and Maintenance of Effort
Buried in a Washington Post article about the budget is this momentous passage:One way to lighten the state's burden is to shift the rising cost of teacher pensions to local governments, said [Senate President Mike] Miller, a leading proponent of changing the system.
Miller has been a proponent of passing down at least part of the teacher pension costs to the counties for some time. A bill he filed last year would have cost the counties nearly a billion dollars over four years. But now Miller is offering to ease Maintenance of Effort requirements that compel counties to maintain per-pupil spending in exchange for a pension handoff.
"Anyone who knows anything about basic accounting knows that the people who set the salaries should also be responsible for the pensions that are a result of the salaries," he said.
To mollify critics of such a move, lawmakers might agree to loosen a requirement that local governments fund their school systems at the same level per student as the previous fiscal year, Miller said.
The combined effect of a county pension mandate and a loosening of public school spending requirements is easy to see: the counties will have a strong incentive to shift spending out of the classroom and towards pension obligations formerly covered by the state. That would have very serious consequences for public education.
Maintenance of Effort is a Smart Law
By Eric Luedtke.
As a teacher, I’ve had the opportunity to work with some extraordinary children. But some of their parents have been just as extraordinary. Year after year, I’ve met parents who will do anything to give their child every opportunity for success, despite their circumstances. Some of them work two and three jobs to keep food on the table. Many come home after long days at work and sit down to help their children with their homework. One in particular sticks in my mind, a parent who told me that they had given up taking medication for a chronic medical condition for over a year in order to keep their kids fed, housed, and clothed. It is an amazing commitment and a deep and abiding love that parents like these show to their children.
In too many places, though, it’s a commitment that is not mirrored by our government. We let far too many children fall through the cracks. Too many go hungry. Too many who are in need of services for basic health care, mental health, and developmental disabilities do not get them. And in too many parts of our country, children attend school in overcrowded, dilapidated buildings where teachers don’t have access to basic supplies and are paid so little that they are as much martyrs as professionals.
Maryland, however, is different.
When we passed the Thornton legislation, our state made what can only be described as a profound promise to the children of our state. The philosophical underpinning of Thornton is simple: that no matter the economic circumstances, no matter the shifting winds of politics, we would provide the money necessary to give a high quality education to every child in Maryland. There are few places in America that have made such a promise. And it is a promise that has had enormous impact. It is one reason why our schools are ranked first in the country.
So it’s been somewhat sad to observe the debate about maintenance of effort over the past few months. It’s sad because the deep philosophical commitment to education that is the underpinning of the Thornton law seems to have become lost in rhetoric about budgets, recessions, and decision-making authority as applied to the maintenance of effort provision. So much so that our County Executive was quoted in reporting about the Committee for Montgomery breakfast in December as calling it a “stupid law.” Now, I understand that politicians are sometimes misquoted by the press, and that the heat of political discourse sometimes leads people to say things they regret. But the law is not stupid. It may need some tweaks, but labeling the idea of making the same basic commitment to kids from year to year “stupid” is at the very least poor word choice. It’s not stupid to provide a good education to kids.
Some of our political leaders are genuinely seeking changes that might make the maintenance of effort law more fair. They’ve suggested giving penalties to county governments rather than school systems; it makes no sense to penalize a school system because their county council has not voted to give them adequate resources. They’ve suggested waiving this year’s penalties on Montgomery County until that provision is fixed. These ideas make sense.
But make no mistake, among the politicians advocating changes in the maintenance of effort law are those who simply lack political courage and commitment, who are unwilling to make the difficult case for maintaining the quality of our schools even in difficult times. And while it’s a difficult case to make, while it will require tough decisions to meet maintenance of effort, maintenance of effort is a relatively low bar – it does not even require that counties account for inflation. In fact, because our maintenance of effort law is pegged to what our effort currently is, rather than what our effort should be, the case can be made that it is not a strong enough legal requirement to meet the true needs of our kids.
In the end, the situation we face as supporters of quality education in Montgomery County is dire. Too many of our politicians are seeking changes in the law because of short-term economic pressures, forgetting the long-term reasoning behind the law. And if the cuts that they seem to think are necessary go through, they absolutely will have an effect on our kids. The school system’s budget is far beyond the point where there is fat to cut.
The fact is that without maintenance of effort, we will be doing less for our community’s children next year than we did this year. Is that really a precedent that we want to set?
Eric Luedtke is a teacher at A. Mario Loiederman Middle School and a member of the Board of Directors of the Montgomery County Education Association, which represents 12,000 educators in Montgomery County Public Schools.
Tuesday, December 22, 2009
Weast Blasts Elrich
In a wide-ranging interview with the Montgomery County Sentinel, MCPS Superintendent Jerry Weast singled out County Council Member Marc Elrich, a former fifth grade public school teacher, for special scorn. And the Weast War continues!
In a November 9 statement on this blog, Elrich noted that the state's Maintenance of Effort law made no exceptions for savings from labor concessions or administrative efficiencies. Weast took exception to that in the Sentinel's interview. Here is the entire text of the relevant question and answer.The Sentinel:
Weast is understandably frustrated because the school system is facing tens of millions of dollars in penalties due to an accounting maneuver that he did not commit. But in re-reading Elrich's statement, we cannot find evidence that Elrich advised Weast to break the law. Furthermore, when Weast refers to "one elected official telling another to break the law," we should note that Jerry Weast is a contract employee hired by the Board of Education and not an elected office holder.
Some of the county council members disagreed with your actions to ask the state attorney general if the alternative solution to the MOE waiver denial was the right thing to do. What is your response to that?
Weast:
The problem with that is that they don't have to sign an official document to the state certifying that it is legal.
I think if they did, they would have taken a different approach to it.
I guess it depends on whom is signing the check. I have to legally sign that what they did was accurate and since there was a question, I had to check the legality of it.
As soon as I checked the legality of it - because had I signed it without checking it out, I would have been signing an illegal document.
What I am baffled by is that what one of the Council members, Marc Elrich, posted on the [Maryland Politics Watch] blog that I should have just ignored it and pretended the law didn't exist.
I've never heard of an elected official wanting to ignore the law. I mean, if you want to write some controversy in your paper then there's your controversy right there.
My goodness. Just quote that blog posting. It's one elected official telling another to ignore the law on a form that carries a $46 million penalty. Hello? Houston we have a problem. I've never like confined spaces with bars in front of them.
Monday, December 14, 2009
Weast War
And so it has begun. MCPS Superintendent Jerry Weast has fired the first shot in what may be his last and greatest battle: the fight over the Fiscal Year 2011 school budget. Pull up your chairs, folks, because you are about to see the master at work.
Weast’s opening salvo was a double-down special in the Post and the Gazette, plus an appearance on News Channel 8. He has drafted both an “as is,” or bare-bones, budget and a list of cuts if it is not funded. (The latter tactic reminds us of the state’s infamous “doomsday cuts” that were rolled out just before the 2007 special session.) Weast’s budget is based on the premise that the county will at least match the per-pupil local spending of FY 2010, which is the state “maintenance of effort” (MOE) requirement. On its face, it is entirely reasonable for the Superintendent to expect that the county will comply with state law.
Of course, the budget assumes that school system employees will be granted $25.9 million more in step increases, which are salary hikes for employees gaining seniority within their existing classifications. That virtually matches the overall budget increase of $25.2 million. But Weast has not negotiated new contracts with the school system’s three unions: the Supervisors, SEIU Local 500 and MCEA. There is no assurance that county employees in the rest of the government will get step increases or that the County Council will support them. So if Weast does not negotiate step increases, the budget will drop by $25.9 million with no direct impact on the classroom.
But there may be sanction from the state. MOE demands that the county must match its prior year’s per-pupil funding level to be eligible for state aid. No exception is made for reduced labor compensation, a point made by Council Member Marc Elrich on this blog. Council Member Valerie Ervin has labeled MOE a “crazy law” and some state legislators are discussing how to make it easier for the counties to get waivers and spend less. But that will not sit well with Weast, who says that any cut to his proposed budget will have “a devastating impact on the children.”
Nor will it be tolerated by MCEA, which is still the county’s undisputed 800-pound gorilla. MCEA has posted a lengthy analysis of MOE on its website, which contains this statement:The MCEA Board of Directors has approved the following position statements on Maintenance of Effort:
Additionally, MCEA President Doug Prouty’s appearance on News Channel 8 and MCEA Executive Director Tom Israel’s comments on this blog make plain that the union regards any weakening of the MOE law as injurious to education. In that position, they are in lockstep with Weast.
MCEA supports legislative action to waive the soon-to-be-announced multi-million dollar “penalty” in loss of state education aid to Montgomery County for the 2009-2010.
MCEA supports legislative action to ensure that future “penalties” not be imposed on local school systems for actions taken by others (the county councils).
MCEA opposes any erosion of the – already minimalist – definition of Maintenance of Effort.
And so Weast is digging in his heels and unsheathing his many weapons to fight back. Just as he told the media, he will not settle for a dime less than what is guaranteed by MOE. He will probably not be doing the county any favors by taking the lead in labor negotiations, which is what he did a year ago. Why should he? Weast’s reward for making the county’s labor renegotiations with the non-school unions easier was the MOE debacle. On top of all this, Weast’s press release states that he is “repurposing the $79.5 million placed in the budget by the County Council in FY 2010 to pay for county debt service. Instead, that money will be used to meet rising costs.” In other words, all deals under discussion to cope with MOE last spring are off. Weast is not about to be double-crossed again.
It is very unwise to bet against Jerry Weast and the 800-pound gorilla except for one thing. Their enemy is not the County Council or the state government. Their enemy is an entity of nearly unlimited power and no remorse: the county’s moribund economy, which is now an exploding grenade spraying shrapnel in MANY directions. The horrible state and county budgets, the requirements of state law, the immense political pressure directed by Weast and the unions and the looming specter of the 2010 elections are all about to collide.
Which will be blown to smithereens first?
Monday, November 30, 2009
The Rogue Superintendent, Part One
County Council Member Valerie Ervin, the Chair of the Council’s Education Committee, recently called MCPS leader Jerry Weast a “rogue superintendent.” That statement is a culmination of years of tension between the County Council and the school system that has been recently exacerbated by budget difficulties. All of that is threatening to erupt in an all-out battle with consequences for the county’s future.
The immediate cause of this dispute is the county’s maintenance of effort (MOE) quandary. State law requires counties to spend at least as much local funding on education each fiscal year as they have the prior fiscal year. This year, Montgomery County asked the state for a waiver of that requirement in the amount of $79 million due to the poor state of the economy and the tax-limiting Ficker Amendment. The county’s Board of Education and Weast agreed with the grounds for a waiver and testified on its behalf. When the state denied the county’s request, the county arranged to give the school district the money to satisfy the state’s requirement, but took it back as a debt service charge for construction. Weast believed that the maneuver would apply just to one year, but the County Council refused to agree to that restriction. Weast then wrote State Superintendent of Schools Nancy Grasmick asking whether the county’s budget maneuver was legal, prompting an opinion by Attorney General Doug Gansler stating that it was not. That may subject the county to penalties ranging from $23-45 million in lost state aid. Weast then blasted the County Council in a statement that was sent to the media but not to the council, prompting Council Member Ervin, who oversees his budget, to denounce him as a “rogue.”
The immediate issue surrounding the penalty is pressing. The budget gimmick approved by the council sent $79 million to the school system so that that money could be used to pay off bonds to build schools. If the state’s penalty applies directly to the school system, it will likely be paid from the money that was to be used for the bonds. That would leave the county responsible for paying off those bonds from another source of money. But if the county makes the school system eat the money, the impact would be unpredictable.
All of this occurs in the background of severe budget problems. The county learned in November that income tax revenues due from the state are $85.2 million lower than originally projected. A County Council budget analysis states:The total FY10 shortfall, based on the State’s new formula, could be in the range of $95 million, while the FY11 shortfall could be in the range of $110 million. These write downs alone could bring the County's estimated FY11 budget gap, which in September was projected at $364.4 million, to well over $500 million, despite the Council's November 17 approval of a $29.7 Savings Plan for FY10. Other factors could make the gap still larger.
In other words, no part of the county government has money laying around to pay off the penalty.
How did things get to this point? Multiple sources report that the school system offered the county a deal last spring to get around the $79 million MOE requirement. The terms of the deal were that the county would pay the schools the $79 million, but the schools would agree to hold the money in reserve. That money would then be available to finance next year’s budget. The reason that proposal fell apart was that many in Rockville did not trust Jerry Weast to sit on the money. And so the ill-fated budget gimmick was instituted, initiating the fall into the hole that the county now occupies.
That brings us back to a central factor that handicaps the ability of the county to respond to adversity: a basic distrust between Weast and some of the county’s elected officeholders. We’ll look more closely at that issue in Part Two.
Saturday, November 21, 2009
Valerie Ervin on Maintenance of Effort
Following is an op-ed on the state's Maintenance of Effort (MOE) law by County Council Member Valerie Ervin, Chair of the Council's Education Committee, that appeared in the Gazette earlier this week.
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As chairwoman of the Montgomery County Council's Education Committee, I am extremely disappointed with the Maryland attorney general's Nov. 4 opinion that Montgomery County did not meet the state's threshold funding level for public education (maintenance of effort) in fiscal year 2010. I believe that this decision elevated form over function.
The budget enacted by the County Council provided full funding of the school system's request for its educational and operational program. The County Council did not make additional program reductions to balance the county's operating budget. This important outcome was accomplished through the collaborative efforts of the local Board of Education, the county executive and the County Council.
Montgomery County found itself in a unique position this year. While revenues overall were decreasing, our school system benefited from increased state and federal education aid, largely related to stimulus funding. The County Council fully funded the schools with fewer local resources by relying on these other funding sources, and our school system agreed with this approach. However, state law requires local jurisdictions to fund at least as much per pupil as in the prior year with local taxpayer dollars, regardless of economic circumstances.
I appreciate and agree with the law's intent to support funding for education and prevent extreme shifts in school systems' resources for children. Montgomery County has never done otherwise. As our outstanding funding track record shows, the county has provided a total of $576.8 million above the legal threshold level over the last 10 years.
As events played out this spring, state law proved to be inflexible in the face unprecedented economic challenges. In my opinion, the law's structure should not be allowed to exceed reasonable funding levels or threaten to reduce educational funding through penalties.
Montgomery County now looks to the governor, the Maryland General Assembly and the state Board of Education to resolve the situation in a way that does not threaten the ability of the Montgomery County public school system to meet the educational needs of our children or unnecessarily impair the ability of Montgomery County to meet social service, health and public safety needs. The reality of the fiscal constraints Montgomery County faces must be recognized, and the continued good-faith effort of the county to fully support our public school system should be the benchmark by which we are measured.
Valerie Ervin, Silver Spring
The writer represents District 5 on the Montgomery County Council.
Friday, November 20, 2009
A Note on Maintenance of Effort
One of the points made by Blair Lee in his must-read column on the state's Maintenance of Effort (MOE) law for school funding is that Montgomery County has been paying well in excess of the state's requirements for education funding for many years. Lee is right about this in a very big way and here is the evidence supporting his view.
The Maryland Legislative Information Services' website contains the following data on above-MOE expenditures since Fiscal Year 2003. Effectively, these are the amounts by which each county has exceeded its prior year's local funding for public schools.
Montgomery County has contributed $420 million more to its schools than has been required by the state's MOE law since FY 2003. That is more than double second-ranked Anne Arundel County ($177 million) and more than triple third-ranked Howard County ($133 million). The state gives no credit to Montgomery County for its historical generosity to its public schools. In fact, the law works in just the opposite way: each year's bountiful school budget becomes next year's floor. As Council Member Marc Elrich says, the clear incentive for each county is to spend as little as possible to meet MOE requirements so that the law does not handcuff its budget in a bad year.
The MOE law is full of perverse incentives and desperately needs to be reformed.
Monday, November 09, 2009
Marc Elrich Comments on School Funding Dispute
County Council Member Marc Elrich, a former 5th grade teacher at MCPS for many years, offered the following comments about the county’s school funding conflict with the state.
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The State BOE (Board of Education) is fundamentally wrong on this one. The compromise would have been to grant us a waiver the right way. To be sure, they are not qualified to judge either the state of the economy or the state of our budgets. The absurdity of their decision shows that.
The only reason we did not make MOE (maintenance of effort) is because the unions gave back their COLAS. The value of that act by the unions, as part of something all the unions did to help us avert a total budget meltdown, was virtually equal to the amount we didn't spend in failing to meet the MOE. In short, if we'd funded the union contracts, we'd have met MOE. We failed to meet it by the value of those contracts.
But, if we’d funded those contracts, we’d have had to fund all of the other union contracts because they were to be treated the same. The cost to the County would have been around $125 million total. To find the $125 million, we’d have had to cut that amount from the government side of the budget (since any cuts to schools would have brought them under MOE again.) There is no way that that could have been achieved without massive layoffs. It’s a number so big that it could not be done with furloughs. It would have cost a very large number of jobs and substantially reduced services. It was a very bad option.
The fundamental issue is this. If in hard economic times you fail to meet MOE because the labor unions are willing to reduce their contracts, you should get a waiver. This is not a reduction in spending in the classroom, it doesn’t increase class size and it doesn’t reduce educational programming, all of which are the laudable intentions behind the MOE law in the first place.
The Board’s application of the law leads to even more absurd implications. If the Superintendent found a way to reorganize administration that saved $25 million dollars and if school budget is then $25 million less than MOE would require, then you’d fail to meet MOE and get penalized. How nuts is that? Under the current rules, you can’t save money, you can only spend more money. Something is seriously not right here. It defies logic, it disincentivizes any effort to be more efficient, and it punishes schools if unions contribute to balancing the budget. It’s just wrong.
I would hope that there’s an honorable way out. The State BOE actually can’t force the County to do anything. What they would do is reduce funding to the school system which would only make the school funding situation worse! The County budget outlook is not improving. We don’t have the money. A confrontation over this will not produce a good outcome.
The other important point is that the county has routinely exceeded the MOE requirement, year after year. It has never been the County policy to fund as little as is needed to pass the State MOE requirement, but rather to spend as much as it can toward providing the best education possible. So for years, the County has poured money into the schools. Yet for this test, none of that matters. The fact that our failure to meet this year’s MOE is because, in part, of our history of spending even more than required was totally ignored by the State. And what message does that send to the Counties? Don’t spend above the MOE level because if you ever find yourself in an economic bind, your history of doing everything you can won’t count for beans and, in fact, your higher levels of past spending will drive even higher MOE requirements. It’s like being punished for doing a good thing.
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