Budget Freeze Implemented as Precaution Against Funding Shortfall

October 19, 2001
A partial freeze has been implemented on certain expenditures as a precaution against the expected loss of significant tax revenue this year and reduced funding for next year’s operating budget for the Montgomery County Public Schools.

The school system has received information from county and state agencies that national and regional economic conditions have significantly worsened, prompting immediate cutbacks in state governmental expenditures. The downturn in the economy is expected to last through at least next year.

The partial freeze being implemented by the school system will have limited effect on school-based programs and services [see details in PDF file at link below]. The freeze specifically exempts hiring for all school-based professional positions (teachers and administrators), bus operators and attendants, building service positions, secretarial positions, and security staff. In some instances, however, certain school-based vacancies will be filled with temporary employees or substitutes.

The freeze primarily impacts central offices, halting the hiring of new staff and limiting access to certain budget funds for non-position expenditures, such as salaries for overtime and part-time positions, contractual services, travel, and equipment purchases. An exception process for emergency expenditures and other unavoidable costs is being implemented on a limited basis.

The freeze is intended help the school system prepare for the expected loss in funding for next year’s operating budget. Concerns also are being raised about the school system’s capital budget for construction projects next year and beyond.

“It is necessary to take steps now to cushion the impact on schools of future budget reductions,” said Superintendent Jerry D. Weast in a report to the Board of Education. He said, however, that the “this action should be seen as precautionary only” and not as an indication of any concerns about the current budget.

Already, the state’s general fund revenues are $53.7 million (or 3.5 percent) below for the same time period last year, and the loss is having a ripple effect throughout the state. Montgomery County’s Office of Management and Budget has reported that the county faces a substantial budget gap for fiscal year 2003.

Given the “pessimistic outlook” of the state’s economy, the school system’s chief operating officer, Larry Bowers, informed senior staff and principals that “the expenditure restrictions are absolutely essential” to prepare for next year’s budget.

Details about the budget freeze and the superintendent’s statement to the Board of Education are available in a PDF file on the school system’s website at the link below.

In addition, a statement by Dr. Weast on the impact of current economic conditions affecting the Montgomery County Public Schools is in the school system's newsletter The Bulletin, which is available on the web as a PDF file at the second link below.

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