reach and will jeopardize future funding.”
The Senate committee passed a budget package that includes broad state income-tax increases and the shifting of $68 million in teacherpension costs onto counties. The full Senate is expected to vote on the proposal this week.
The package would also close loopholes in the state’s maintenance-of-effort (MOE) law, which mandates that counties at least match their previous year’s per-pupil education funding.
Counties that violate the law are penalized in the next fiscal year, receiving flat state education funding rather than a scheduled increase.
The new MOE law — proposed by Sen. Nancy J. King, Montgomery Democrat — would allow counties to raise property taxes above existing local caps to help meet minimum educationfunding requirements.
If counties still fail to provide minimum funding, the state would be able to seize local incometax revenue and give it directly to the county’s school board.
“The state is stepping in and substituting its own judgment,” said Michael Sanderson, executive director of the Maryland Association of Counties. “The idea of the state saying, ‘Keep feeding the beast and tax yourself as much as you have to’ is an unfair expectation on county governments.”
Many county executives and local lawmakers have argued that meeting the MOE law has been nearly impossible since the economic downturn.
They say that bad times have forced counties to neglect other parts of their budgets — making deep cuts to employment, health and public safety — because they weren’t able to touch education, which in some instances accounts for as much as half of their spending.
Smaller, poorer counties say they have been hit especially hard — and larger, more affluent counties say they are struggling to match funding levels that skyrocketed during happier economic times, and that state penalties only put them in a deeper hole.
County officials have been locked in a continual battle against local school boards and many state lawmakers who have heralded the quality of Maryland schools and say a stronger MOE law is crucial to protecting teachers and students.
“It’s the one service that is a constitutional mandate in Maryland,” said Sean Johnson, director of legislative affairs for the Maryland State Education Association. “I don’t think it’s a sacred cow as much as it is viewed as the right type of investment. You need the state to ensure greater accountability at the local level.”
Counties that violate maintenance of effort may currently request a hardship waiver that, if granted, absolves them of the penalty.
However, they must still come back the next year and match the previous funding level that was deemed too high to reach, essentially putting them right back where they started.
Looking for long-term relief from the MOE requirement, several counties have found an effective loophole by slashing education funding and simply not requesting a waiver. The counties take a one-time hit in state funding, but are then allowed to reset their allowable future minimum at that year’s lower level.
Last year, Montgomery County was one of seven counties that missed its requirement, funding education at $127 million below the MOE minimum. The county faces a potential $26.2 million penalty this year from the state — a small price, officials say, for the hundreds of millions they could save by funding schools at a lower level in future years.
The new MOE law would close the loophole, requiring violating counties to meet the higher minimum that they had sought to avoid.
However, it would allow waivers or reductions for some counties that have long-term economic difficulties or have frequently exceeded MOE in the past.
Mr. Sanderson said counties are “on red alert” and have turned much their lobbying effort toward the House, even though lawmakers there are considering a similar proposal to strengthen maintenance of effort.
“The money isn’t there, and holding us to that standard is unreasonable,” he said. “What I think it’s going to do is tell counties: ‘Don’t put more money into your schools than you have to, because you’re never going to get out of that commitment.”