Board of Education Approves $2.13 Billion Budget Request

February 14, 2012

Allows district to manage growth and acknowledge employees

The Montgomery County Board of Education approved a $2.13 billion Operating Budget request for Fiscal Year (FY) 2013, which will allow the district to keep up with its growing and changing student enrollment and recognize the excellence of its employees.

The Board is requesting a 2 percent increase over this year—the smallest increase request in more than a decade—and will put $17 million of its operational surplus toward funding next year’s budget.

The Board’s request is the minimum allowable under the state’s Maintenance of Effort (MOE) provision, which requires that counties fund education at the same per-student level from one year to the next.

“We believe this is a responsible budget given the current fiscal realities. With this budget we hold the line steady on education funding as we maintain our current programs and services to a growing number of students,” said Board of Education President Shirley Brandman. “There are certainly areas in which we would like to make a greater investment but, at this time, we are taking a measured approach and working to ensure that we maximize the efficiency of all our investments.”

The Board is seeking $1.39 billion in local funds from Montgomery County, an increase of $22.2 million over FY 2012. With enrollment expected to increase by more than 2,400 students, the increase in local funds will allow the county to keep its per-student investment at $9,759 per student and meet Maintenance of Effort. The county has failed to meet MOE for the past three years and since 2009, per-student funding has fallen by $1,490 per child.

This has required MCPS to make more than $400 million in budget reductions and savings over the past three years. Among the reductions:

- Class sizes have increased by one student per classroom, on average;
- Employees have agreed to forego cost-of-living increases for three consecutive years and step increases for the past two years, saving $144 million;
- More than 1,300 positions have been eliminated, mostly teachers and staff who directly support instruction;
- Midyear savings of about $73 million have been realized through hiring freezes and expenditure restrictions; and
- The central services budget has been reduced by more than 20 percent.

“Even if the county meets its minimum obligation for FY 2013, we are still spending significantly less per child today than we did just three years ago,” said Superintendent of Schools Joshua P. Starr. “Our staff has done a terrific job in this time of diminishing resources, but we cannot continue to endure these types of reductions without it having a negative impact on the classroom.”

The Board of Education will submit its budget request to the Montgomery County Executive and the Montgomery County Council on March 1. County Executive Isiah Leggett is expected to release his budget recommendation on March 15.

“We look forward to working with the County Executive and the County Council on the budget in the coming months,” Ms. Brandman said. “I know our county leaders take great pride in the quality of our public schools, and I thank them for their continued investment in our staff and students.”

Although the Board has approved its budget request, there are still many questions surrounding the fiscal situation in FY 2013.

Because the County Council did not meet MOE in FY 2012—and did not seeking a waiver from the Maryland Department of Education—the state may withhold $26.2 million in state aid as a penalty. The County and the Board of Education are working with state legislators to get the penalty waived for this year. However, if the County does not meet MOE for FY 2013, the school district could face another $12.7 million penalty.

The biggest question surrounding the budget is related to Governor Martin O’Malley’s proposal to shift a significant portion of state pension costs to local governments. Under the governor’s proposal, Montgomery County would have to pay an additional $47.4 million in retirement costs in FY 2013 and those costs would only increase in the coming years. County and school officials are strongly opposed.

“Shifting the burden from state to local government will not improve the long-term health of the pension fund which should be the primary interest. However, it will have an immediate negative impact on the important services that our local governments provide,” Ms. Brandman said. “We are ready and willing to work with our colleagues in the state legislature to find alternative solutions.

(Read the entire statement from the Board of Education against the pension shift).

Building the Budget

The Board of Education received Dr. Starr’s budget recommendation in December and has spent the past two months reviewing his request and hearing from the public. The Board held public hearings on January 11 and 18 and held work sessions on the budget January 25 and 26. The Board asked dozens of specific questions about the budget, which staff answered (see the questions and answers).

Before the Board’s vote, Dr. Starr increased his recommended budget by $4.6 million to account for an increase in state aid. Dr. Starr is also recommending that funds be realigned within the budget to:

- Support two middle schools that must develop alternative governance plans under the federal No Child Left Behind Act (learn more);
- Create three additional prekindergarten classes for low income students;
- Work with Gallup Consulting on a more robust staff engagement survey; and
- Add three consulting teachers who will work with new and/or underperforming teachers through the Peer Assistance and Review (PAR) program.

The Board approved Dr. Starr’s recommendation that money be set aside for possible salary and longevity increases for MCPS staff. The exact amount of those increases has not been determined, as the district is still negotiating with its employee unions.

“Our employees have helped us weather these difficult economic times by giving up their salary increases and, in many cases, doing more with fewer resources,” Board President Brandman said. “It is important that we recognize their hard work and commitment and acknowledge their excellence.”

Dr. Starr had put $170,000 in his budget recommendation to expand hours-based staffing in three middle schools. Currently, 31 of the 38 MCPS middle schools use this effective method of planning for and delivering special education services.

The Board of Education voted on Tuesday to instead expand hours-based staffing to all remaining middle schools, which will cost an additional $603,000. The money will be allocated from increased state aid.

The Board’s budget request does include a $6.1 million reduction to Central Services, including the elimination of nearly 18 positions, as well as $3.2 million in reductions to school-based support and services. However, the Board’s request does not call for any reduction in teachers or other school-based staff.

Keeping up with Growth

Over the past five years, the student population in MCPS has grown and changed.

Since 2007, MCPS has added about 9,000 students and the district is projected to add another 9,000 students by 2017. Much of the recent enrollment growth has occurred in elementary schools, and these students are coming to the district with more needs, such as Free and Reduced-price Meals (FARMS) and English for Speakers of Other Languages (ESOL) services.

For instance, approximately 13.1 percent of MCPS students require ESOL services systemwide, but in the elementary schools that rate increases to 22.5 percent. And since 2007, the number of students eligible for FARMS has increased by 11,785 children systemwide, much of this growth occurring in elementary schools. MCPS now has 47,365 students receiving FARMS—more than the total number of students in District of Columbia Public Schools.

Governor Martin O’Malley has recommended full funding of mandated state aid for FY 2013, which would increase state revenue for MCPS by $28.5 million over this year.

MCPS Budget Website

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