Maintenance of Effort Legislation Introduced

Several bills addressing maintenance of effort (MOE) have been introduced this Session.  Reforming the MOE waiver process is a Maryland Association of Counties’ legislative initiative.

House Bill 304 and Senate Bill 310 are identical bills that seek to codify the MOE recommendations of the Joint Legislative Workgroup to  Study State, County, and Municipal Fiscal Relationships.  The bills are emergency bills that would extend the deadline for when a county may request a waiver to May 1 and require the State Board of Education (SBE) to decide whether to grant a waiver no late than 45 days after a county makes a request or June 1, whichever is earlier.  The bills also require SBE to consider a variety of factors when determining whether to grant a waiver, including:  (1) external environmental factors, such as the loss of a major employer or industry; (2) the county’s tax base; (3) the rate of inflation relative to the growth of student population; (4) the county’s statutory ability to raise revenues; (5) the county’s history of exceeding MOE; (6) agreement between the county government and school board on the waiver; (7) if there is a broad economic downturn; and (8) if there is signficant reduction in State Aid to the county.

House Bill 410 is an emergency bill that would grant counties a “blanket” waiver from meeting MOE for FY 2011, similar to the waiver granted back in the early 1990s.

House Bill 223 is an emergency bill that would retroactively exempt Montgomery County from meeting MOE for FY 2010,. 

Finally, Senate Bill 403 does not address the MOE waiver issue, but would alter the withholding of State Aid that occurs when a county fails to meet MOE.  The bill would require the State Comptroller to withhold an amount of State Aid to the counties equal to the increase in State Aid that would go to county school board.  The school board’s funding would be held harmless.

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