SNOW HILL – Penalties for funding less than a Maryland-mandated maintenance of effort (MOE) budget could vary widely depending on interpretation of the untested law.
A budget that falls short of MOE would prompt the state to withdraw some funds from that school system, but a successful waiver would allow the local jurisdiction to fund the lower level and retain all state funding.
The school budget waiver request filed by Worcester County last week could, if successful, protect at minimum $250,000 additional state funding for county schools or much more.
“Right now, it’s not clear how much state aid would be at risk,” said Worcester County Board of Education Finance Officer Vince Tolbert.
Part of the MOE law seems to indicate that a county that does not meet MOE levels would be docked any additional monies for that fiscal year, in this case $250,000, but another part of the law implies that the state could penalize the county by docking a higher sum.
“It’s never really been put to the test,” Tolbert said.
Worcester County schools are slated to receive $16.7 million total in Maryland state aid next year.
The Maryland MOE law requires local governments to maintain funding per student at the same level from year to year.
If a county transgresses this law and reduces school spending below MOE, resulting in less money being spent per student than in the previous year, that county could lose some state funding.
Eight counties, including Worcester, have filed for a waiver of the MOE standard: Anne Arundel County, Charles County, Frederick County, Garrett County, Montgomery County, Prince George’s County and Wicomico County.
Maryland encompasses 24 school systems, the 23 counties and Baltimore City. One-third of those jurisdictions have asked to fund their school systems at less than MOE, reflecting the general decrease in revenue across the state.
No one knows what will happen when the Maryland State Department of Education (MSDE) considers the multiple MOE waiver requests it received at the beginning of April.
“The law hasn’t been invoked in a long, long time,” said Bill Reinhard, a spokesman for MSDE. “The state will look at each one on a case-by-case basis.”
The number of counties asking for MOE relief should ensure that the requests are taken seriously.
“With eight counties, it’s going to be more than ‘no and go home,’” said Commissioner Virgil Shockley. “They’re going to have to look at it.”
Shockley said he would not be surprised to see three or four more waiver requests come in.
The Maryland General Assembly has worked on but not yet approved an extension of the MOE waiver request deadline to May 1.
“It wouldn’t surprise me if the governor steps in and grants a blanket waiver,” Shockley said.
In 1992, Maryland’s local governments received a blanket MOE waiver for fiscal year 1993.
Worcester’s MOE waiver request packet to MDSE details the county’s straits, providing a disturbing snapshot of Worcester County’s financial condition.
The recession has hit Worcester hard, according to the application materials, making Worcester County one of two Maryland counties with decreased real property assessments.
The assessable base in Worcester County has also gone down by 2.15 percent, or $433 million. The state assessment office predicts that these numbers will not recover until 2013, the packet cites.
As of April 1, the county was expecting a revenue shortfall for the next fiscal year of $13.9 million.
Millions more in county allocations could be cut by the state as the Maryland General Assembly finishes putting together the Maryland state budget over the next several days.
County Commission President Louise Gulyas confirmed Wednesday during a work session that Worcester County lost $4.5 million in House of Representatives cuts last week.
“The Senate version is going to be more,” Gulyas said.
The latest state budget cuts to county revenue may force Worcester County to fund a smaller schools budget, depending on the state’s waiver decision.
“That last round of cuts, that killed everybody. There’s nowhere to go,” said Shockley.
The Worcester County Board of Education opposes the MOE waiver and has called for the County Commissioners to take money from county departments and retirement accounts to pay for the MOE budget.
MSDE’s waiver decisions will be made by May 15.