The Joint Legislative Work Group To Study State, County, and Municipal Fiscal Relationships held its final meeting of the year today, and reached consensus on several changes to the Maintenance of Effort law governing county funding for public schools, specifically the procedure for a county seeking a waiver of the MOE requirement for a given year. Co-Chair Senator Edward Kasemeyer opened the MOE conversation indicating there was “fundamental consensus” on several issues, and that the Work Group would plan to introduce legislation to effect the recommendations from their deliberations.

Prior to the meeting, MACo submitted its comments on the range of MOE options being discussed by the Work Group, in advance of its final meeting of the year.

Briefly, the Work Group included the following changes to the MOE waiver law in its recommendations:

– Retain the State Board of Education as the decision-making body for waivers, but codify the series of criteria that are to be considered

– Codify the four criteria currently adopted in regulations by the State Board for waiver consideration:

C. Standard for Granting a Waiver.

(1) The State Board’s decision on whether to approve or deny in whole or in part a waiver request shall be based on a determination that the county’s fiscal condition significantly impedes the county’s ability to fund the maintenance of effort requirement.

(2) The State Board may consider the following:

(a) External environmental factors such as a loss of a major business or industry;
(b) Tax bases;
(c) Rate of inflation relative to growth of student population; and
(d) Maintenance of effort requirement relative to the county’s statutory ability to raise revenues.

-Broaden the codified equivalent of item (a) above to include a “broad economic downturn” (and not just a one-county circumstance)

-Direct the State Board to also consider new conditions for a waiver:
The presence of an agreement between the county government and the board of education on the need for the requested waiver
Reductions in State aid to the county government
The county’s history of exceeding Maintenance of Effort levels

The Work Group contemplated an additional range of issues, including a MACo-supported proposal for a “legislative waiver” based on objective statutory criteria, but opted not to include that approach in its recommendations. They also discussed potentially creating an appeal procedure from the State Board’s decision, but on a close vote rejected taking any action on that element as well. (Following that vote, Delegate Anthony O’Donnell expressed he was “likely to put in that legislation” to allow an appeal to the Board of Public Works).

Among other items rejected by the Work group were some issues of concern to MACo. Among the staff-generated proposals was a change to the administration of the so-called “penalty” for a county missing the MOE funding target — the Work Group today did not choose to include any change to that section of law in its recommendations. Also, discussion of possibly “rebasing” the new MOE level in the wake of a granted waiver did not attract support at today’s meeting, and the proposed bill will not address that area (some had argued that the MOE requirement should be the highest previous appropriation preceding the waiver year). MACo had expressed concerns with both of these contemplated changes.