Howard County Executive Calvin Ball pre-filed a resolution amending the Howard County Board of Education (BOE) Operating Budget for fiscal 2020. The resolution allows the BOE to appropriate $7.2 million from its fiscal 2019 unassigned General Fund Balance to its fiscal 2020 Operating Budget Fixed Charges category to reduce the Howard County Public School System’s (HCPSS) $39.2 million Health and Dental Fund deficit.
“This is the first step in our collaborative, pragmatic plan to eliminate the Health Fund deficit,” said County Executive Calvin Ball. “I’m grateful to the County Council, Board of Education and Dr. Martirano for working with my administration, so that we can make significant and consistent progress each year until the deficit is fully resolved.”
Earlier this month, the BOE approved a collaborative plan with the County Government to reduce the HCPSS Health and Dental Fund deficit. The Health Fund deficit was accrued over several years, and this resolution is the first significant step to begin eliminating the debt. Sound fiscal management principles dictate that some level of unassigned fund balance be preserved to account for the risk of unforeseen expenditures or declines in revenue.
The modified plan outlines eliminating the debt over four years, through HCPSS year-end savings and one-time funds from the County. Each year the deficit would be reduced by $6 to $11 million until fiscal year 2024. The plan also introduced a mechanism for accountability from all parties. The County will contribute $13 million in total one-time funding, contingent upon HCPSS meeting established year-end savings targets and the State Department of Education excluding one-time funding from Maintenance-of-Efforts base calculation for future years.
The modified plan is sustainable within existing resources, avoids the unnecessary financial risk of operating without an unassigned fund balance, and adequately balances available resources and risks.