Board Adopts $2.39 Billion FY 2016 Operating Budget

February 10, 2015

Board Cuts $10 Million Due to Reduction in State Funding; More Reductions Possible 

The Montgomery County Board of Education Tuesday unanimously adopted a $2.39 billion operating budget request for Fiscal Year (FY) 2016, which includes a $93.4 million increase in spending—about 4.1 percent—that will be needed by the district to keep up with its growing enrollment and manage ongoing operational, salary, and benefit costs. The Board deferred most planned budget enhancements due to a $10 million cut in state funding.

The Board’s budget request also assumes that the county will provide $23.3 million needed to restore one-time funding used last year to fund the current FY 2015 budget.

The budget passed by the Board is $10.2 million lower than the budget recommended by Superintendent Joshua Starr in December, due to lower-than-expected funding from the state of Maryland. State education funding for MCPS is more than $10 million lower than anticipated in Governor Lawrence J. Hogan, Jr.’s recommended budget for the next fiscal year.

While state funding levels are clearer than they were in December, Montgomery County’s fiscal outlook remains unsettled. County Executive Isiah Leggett has indicated the county is facing a projected budget shortfall that will impact funding levels for MCPS and all departments and agencies that the county funds.

“The Board’s operating budget request doesn’t fund everything we need. However, given the current economic climate, it is a reasonable request that will allow us to serve more students and meet their increasing needs,” said Board of Education President Patricia B. O’Neill. “We didn’t want to have to make these cuts, but given the reduction in state aid, we have to do it. We will need to work with our community, state, and local leaders to ask our legislators in Annapolis to restore the state aid we have lost and to provide the resources at the local level our kids need.”

The Board’s budget request already includes reductions and efficiencies beyond what was included in the superintendent’s recommendation. This includes the elimination of 29 positions, including 17 building service workers who clean and maintain schools. Expenditure and hiring restrictions imposed in November have nearly doubled the district’s projected end-of-year fund balance to about $33 million, which will be used to help fund the FY 2016 budget.

Also, the Board’s budget request eliminates more than two-thirds of the $8.2 million in strategic priority enhancements the superintendent included in his December recommendation.  (Read the Board of Education report.)

However, MCPS must begin planning staff allocations for next school year in early March, and it is not expected that the county’s financial picture will be any clearer by that time. Therefore, MCPS will not allocate to schools nearly 350 positions, mostly teachers, which are included in the budget. This could result in class size increases in most schools.

“More than 90 percent of our budget is spent on our people, so any significant spending cuts will have to include a reduction in staff,” said Larry A. Bowers, chief operating officer for MCPS, who will serve as interim superintendent of schools beginning on February 16. “We are hopeful the County Council will find a way to fully fund the Board’s budget request and, if they do, we will allocate these positions. But we must plan based on what we know at this time.”

The Board of Education held two budget public hearings on January 8 and January 15 and received input from staff, students, parents, and community members throughout Montgomery County. The Board also held an all-day work session on January 20 and, throughout the review process, asked more than 65 specific questions about the budget that were answered by staff (see the questions and answers).

The Board will submit its budget request to the Montgomery County executive and Montgomery County Council by March 1. County Executive Leggett is expected to release his budget recommendation by March 15. The Montgomery County Council will hold public hearings on the county budget in April before passing a final budget in May.

“The Board of Education understands the difficult job the County Council has in balancing all the needs of our community in its budget,” Mrs. O’Neill said. “However, our schools are a big part of what makes Montgomery County a great place to live and we must continue to invest in our students if we want a bright future for our children, our families, and our community.”

Managing Growth and Costs

Most of the increase in the Board’s budget will be used to provide the same services to a growing number of students; manage increased business costs; and meet salary and benefit obligations.

Enrollment in MCPS this school year is 153,852 students, an increase of more than 2,500 students compared with last year and more than 12,000 students over the past six years. The growth is expected to continue in the coming years, with enrollment next school year projected to be 156,514 students—an increase of more than 2,600.

The number of students needing services to ensure their success—such as free and reduced-price meals (FARMS) and English for Speakers of Other Languages (ESOL) services—is growing even faster than overall enrollment. Since FY 2009, overall enrollment has grown by 8.5 percent, but during the same time period the number of students receiving FARMS has increased by 43.5 percent and ESOL enrollment has grown by 32 percent.

In order to manage the projected growth in FY 2016, the Board’s budget request includes $18.9 million to add more than 275 positions, including 111.4 general elementary/secondary positions, 96.3 positions for special education services, 41.5 positions for ESOL instruction, and 25.3 positions for student transportation.

The budget request also includes a $59.5 million increase for continuing salaries, which funds a 2 percent general wage increase for MCPS employees and step or longevity increases for qualifying employees. The Board’s budget request also includes $39 million for increased benefits costs, which is partly offset by savings generated by an increase in the amount that employees contribute to their health benefits. The budget request also includes a $4.4 million increase in operational costs, such as supplies and materials, utilities, and inflation.

The increase in the budget is offset by $7.6 million in efficiencies and reductions—$2 million more than in the superintendent’s original recommendation.

Strategic Priority Enhancements

Dr. Starr’s recommended budget included $8.2 million and nearly 78 positions for strategic investments that would help MCPS narrow achievement gaps and prepare students for success in the 21st century. These enhancements were part of a multiyear budget strategy to improve student performance and therefore built on investments that were made in the FY 2014 and FY 2015 operating budgets.

However, due to fiscal constraints, the Board’s budget pulls back significantly on those recommendations to maximize the dollars needed to manage growth and ongoing costs—delaying the enhancements to FY 2017 or beyond. The Board’s budget request includes about $2.5 million and about 20 positions for strategic enhancements.

Among the enhancements included in the Board’s budget request are:

  • 6.5 elementary school counselors, school psychologists, and pupil personnel workers;
  • 5.0 math content coaches to improve elementary school math performance;
  • Funds for athletic trainers in all high schools;
  • Funds to enhance county and community partnerships that serve children and support their academic success;
  • 2.0 positions to increase equity training and support across the district;
  • Funding for an effort to diversify the teacher workforce;
  • 6.0 positions to increase services to students who receive Interim Instructional Services outside of the school; and
  • Enhanced training for staff to better serve students who receive ESOL services.

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