Cuts Likely for Arundel Schools in 2012: County Budget Shortfall of $75 Million Responsible

An anticipated shortfall of up to $75 million in Anne Arundel County’s fiscal 2012 budget could mean significant cuts for its public school system.

In a March 17 meeting with Schools Superintendent Kevin Maxwell, Anne Arundel County Executive John Leopold acknowledged that the county will likely fail to meet state-mandated Maintenance of Effort (MOE) requirements by $15 million. (According to the Maryland Association of Boards of Education, state law requires local governments to maintain their education funding effort from year to year on a per-pupil basis, but has allowed the state Board of Education to grant waivers since 1996.)

With the county’s 2012 MOE figure amounting to approximately $5.7 million, its schools will have to make do with approximately $10 million fewer dollars than they received in fiscal 2011.

Earlier this year, the Anne Arundel County school board submitted a $968.6 million operating budget request for fiscal 2012, $37.4 million above its 2011 operating budget.

“If the county executive’s numbers hold true, we must find more than $47 million in cuts to our current proposal,” Maxwell said in a memo to President Patricia Nally and other members of the Board of Education. “Such cuts will have catastrophic effects to our school system and, frankly, put in peril the progress we have made in the last five years.”

Two Choices

The county executive was counting on the Anne Arundel County Council to take up his request last month to seek an MOE waiver from the Maryland State Board of Education, but the resolution failed to make the council’s March agenda.

That seemingly leaves Leopold with two choices.

“Our office of law is looking into the legality of whether we could request a waiver independently, without the council’s support,” he said. “Otherwise, the budget package will be presented to the council in its current state,” leaving the council to decide whether to fund the difference.

If not, the county could be penalized by losing its eligibility for an increase in state funding for education next year, forcing onto the county Board of Education the responsibility of asking the state to waive those penalties.

This is the second year in which the county administration has considered seeking an MOE waiver. Prior to announcing his fiscal 2010 operating budget, Leopold and the council requested that $9 million be waived from the amount required under the Education Article.

That request was later withdrawn after the state of Maryland adopted its own fiscal 2010 budget, with fewer reductions in state aid to local governments than originally anticipated.

Consequences

In his memo to school board members, Maxwell painted a bleak picture.

“Even with a budget that only meets Maintenance of Effort, we would most likely be unable to provide compensation increases to our employees,” he wrote. “Because of the savings we have accrued through sound business decisions, however, we would still stand a chance of avoiding furloughs and layoffs.”

But a cut of the magnitude suggested by the county executive makes furloughs and layoffs a real possibility, Maxwell said.

“Approximately 83% of our budget is made up of salaries, health care and other benefits for employees,” he said, making an impact on present employees “all but unavoidable.”

He further warned that such cuts could adversely impact magnet programs and charter schools.

“We would have to re-examine every available option and no discussion would be off the table,” Maxwell said.

But county Budget Officer John Hammond cast doubt on the need for layoffs or furloughs.

“The school board asked for incremental pay raises for employees in excess of $34 million in the budget request they submitted to us,” he said. “But all other county employees, including our police and firefighters, are taking a 4.6% pay cut for the second year in a row. [Layoffs] aren’t what has to happen; they don’t have to give the pay increase.”

Blame Generosity?

According to Leopold, education accounts for nearly 53% of the county’s total operating budget. The problem, as he sees it, is that the county’s earlier generosity is now seen as an entitlement because of the MOE requirement.

In his fiscal 2010 waiver request, Leopold noted that the county far exceeded its MOE requirement in each of the previous years with the exception of 1992, when Maryland permitted a state-wide waiver of MOE requirements.

“In the last decade we have increased the contribution to K–12 education by more than $263 million,” he said. “That’s a 91.3% increase in county funding and an average increase of more than 6.7% during a time when enrollment declined by .2%.”

That’s fine in good years, but the county doesn’t get a credit in lean years, Hammond said. “The problem with the MOE rule is that each [previous] year establishes a new level … that you’re committed to.”

The county executive will present his budget to the county council, with or without a MOE waiver request for education, on April 15.