Board of Education Approves FY 2013 Budget, Agreements with Employees

June 14, 2012

The Montgomery County Board of Education approved a $2.16 billion Fiscal Year (FY) 2013 operating budget for Montgomery County Public Schools (MCPS) on Thursday (June 14, 2012). The budget represents the minimum increase in local funding allowed by state law.

The FY 2013 operating budget allows MCPS to keep up with its continued growth but includes no major new initiatives or programs. The budget also allows MCPS to provide a compensation increase to its employees—most of whom have not received an increase in two or three years—while asking them to pay more out-of-pocket expenses for health care services.

“This is a fiscally appropriate budget given the current economic realities. This budget will allow us to hold the line on spending while sustaining the current level of services to a growing number of students and acknowledging the dedication of our employees,” said Shirley Brandman, president of the Montgomery County Board of Education.

The $2.16 billion budget is a $73.2 million increase from the current year’s operating budget, a growth of about 3.5 percent. However, $27.2 million of that increase is for state teacher pension costs that were shifted to local school boards. Additional revenue approved by the state legislature will fully offset the added pension costs for FY 2013. If the money for the pension shift is excluded, the operating budget increases by $46 million, or 2.2 percent, over this fiscal year.

In the fall, the Montgomery County Council had asked the Board of Education to submit a FY 2013 operating budget that was no higher than the Maintenance of Effort (MOE) level—meaning the county would provide local funds at the same per student level next year as it does this year. The Board of Education honored that request when it submitted its budget proposal to the County Executive and the County Council in March with a 2 percent increase. It was the smallest percentage increase requested by the Board in more than 10 years. On May 24, the Council approved a budget for MCPS that, aside from the pension shift, is virtually unchanged from the Board’s request.

With enrollment expected to grow 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 MOE. This is about $1,490 less per student than the county provided in local funding in FY 2009.

Over the past three years, MCPS has saved $400 million through budget reductions and efficiencies including the elimination of more than 1,300 positions and a reduction in central services by more than 20 percent. Also among the reductions, MCPS employees have not received cost-of-living increases for three consecutive years and have given up step increases for the past two years, saving $144 million.

“This budget is not only an investment in our students, it is an investment in sustaining the future of Montgomery County as a great place to live and work,” said Superintendent of Schools Joshua P. Starr. “MCPS has a national reputation for excellence and if we are going to sustain that excellence, we must reward and retain the employees who are doing such tremendous work.”

On Thursday, the Board of Education approved agreements for FY 2013 with its three employee associations—the Montgomery County Education Association (MCEA), the Service Employees International Union Local 500 (SEIU) and the Montgomery County Association of Administrators and Principals (MCAAP). Under the agreement, all employees hired before February 1, 2012 will receive a compensation increase in FY 2013. The increase averages out to 3.4 percent per employee. Employees are also being asked to pay higher out-of-pocket copayments for prescription drugs and doctor visits.

The increase in compensation will cost about $47 million but about $27 million of that cost is offset by savings realized from higher-than-expected turnover—mostly retirements—and the ability to hire new employees at lower-than-expected salary levels.

State revenue for the budget will increase by $28.5 million compared to the current fiscal year under a budget passed by the Maryland State Legislature in May.

Board resolution on FY 2013 operating budget

Learn more about the agreement with employees

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