Final Plan Holds Line on Class Size; Pay Raise Eliminations Key to Budget Balancing

Budget Includes $80 Million Appropriation to Pay Debt Service Costs on Bonds for School Construction, as Part of County Council’s Adopted Budget Resolution

The Montgomery County Board of Education today unanimously approved a final $2.2 billion Fiscal Year 2010 Operating Budget for Montgomery County Public Schools that will hold the line next year on average class sizes and sustain key academic initiatives, due in large part to the willingness of employees to forgo $89 million in cost-of-living adjustments.

In another key aspect of the FY 2010 budget, nearly $80 million of the funding will essentially be returned to the county, due to the requirement this year that $79.5 million of the school system’s appropriation be used to pay debt service costs on county bonds that were sold for constructing schools. This unprecedented stipulation that MCPS make these bond payments in FY 2010 was taken by the County Council to fulfill the state Maintenance of Effort (MOE) funding requirement for schools funding, under Maryland law.

By requiring the $79.5 million in debt service payments by MCPS, the county was able to help close its own deficit and preserve funding for other areas of the overall county budget. The Board of Education and Superintendent Jerry D. Weast supported the measure with a one-year limitation, after Montgomery County officials were denied a MOE waiver last month by the State Board of Education. In its budget approval resolution today, however, the Board noted its concern that the County Council did not address such a limitation when it passed a final county budget, leaving open the possibility of requiring such payments in the future.

The total approved budget of $2.2 billion represents an increase overall of approximately $133 million (6.4 percent) over the current FY 2009 Operating Budget of $2.07 billion. The tax-supported portion of the budget ($2.02 billion) is up 4.3 percent over that of the current year. Nearly all of the increased funding in the FY 2010 budget comes from the money allocated for debt service payments and from the $49.3 million in federal stimulus dollars MCPS will receive via the American Recovery and Reinvestment Act (ARRA). If the $79.5 million for bond payments was not included in the budget, the total tax-supported increase would only be $2.8 million, or 0.1 percent. Local taxpayers will be contributing $63 million less than in last year’s budget, due to the increased state and federal aid.

“This has been an incredibly challenging and unpredictable year to prepare a budget,” said Shirley Brandman, president of the Board of Education. “We faced our worst economic crisis in decades, absorbed a larger than expected increase in student enrollment, and experienced some of the greatest uncertainty ever, in terms of the amount of state and local funding we would be receiving. We had to make difficult cuts, but in the end, I believe we emerged with a solid budget that will enable us to continue to have success with our academic reform efforts.”

Key to the balancing of the FY 2010 Operating Budget were the agreements by the school system’s approximately 22,000 employees to forgo their previously negotiated cost-of-living adjustments, in order to avoid deeper cuts to educational programs. The agreements to forgo the raises were approved by each of the employee associations, representing teachers, supporting services staff, and administrators.

“Throughout this entire budget process, we emphasized the need to work collaboratively and to keep one all-important question in the forefront of our minds: What is best for the students?” said Dr. Weast. “By doing so, we were able to hold the line on average class sizes and maintain critical initiatives that have helped to raise student achievement. Once our budget was transmitted to the County Executive and County Council, we worked in close collaboration with them to help them close a major fiscal deficit. I am proud of our Board and our staff, and the way we worked to protect both our students and our county taxpayers.”

Next year’s budget features no new initiatives, but as a result of the increased federal funding for Title I and for the Individuals with Disabilities Education Act (IDEA) grant, 197.7 new positions will be added to serve students in Title I schools and to support special education programs. Excluding the positions supported through this boost in federal aid, the FY 2010 MCPS Operating Budget will feature a net decrease of 17.2 positions. The number of new jobs created to support enrollment growth (258.6) was offset by a larger overall decrease of 275.8 positions, due to reductions in the base budget.

Additional information on the FY 2010 Operating Budget for Montgomery County Public Schools can be found on the MCPS web site.