Maintenance of Effort Waiver Legislation Heading to Conference Committee

Yet another issue affecting county governments is likely to go “down to the wire” in the remaining days of the legislative session is the process for Maintenance of Effort Waivers for counties unable to reach their funding target. This topic, one of MACo’s legislative initiatives for 2010, has seen two bills pass to address the waiver process. However, since SB 310 and HB 304 are not identical, the differences are likely to be worked out in a conference committee in the coming days.

Five counties have already submitted requests for FY 2011 waivers from Maintenance of Effort funding requirements, and the State Board of Education has indicated that passage of legislation this year would move them to submit amended guidelines for county submissions for this year and beyond.

For more detail on the differences between the two bills, see previous Conduit Street coverage. The House bill contains additional provisions not included in the Senate Bill:

MACo had sought an independent, expedited appeal process from a waiver denial by the State Board of Education. Instead, the W&M bill will provide the first level of waiver claim be made to the Superintendent of Schools, with an appeal then following to the State Board of Education, whose decision is final. Currently, the waiver request is direct to the State Board of Education — who rendered the perplexing denial judgments for FY 2010 that have led directly to the wide consensus on the need for remedial legislation.

The W&M bill will also alter the mechanism for assessing the “penalty” on a jurisdiction failing to reach its MOE target, and being denied a waiver through this process. Under the amended bill, the State would withhold funding to that county’s Board of Education in the following fiscal year, rather than the year in which the funding was deemed to have been below MOE. For example, if a county fails to make its MOE target in the coming year’s budget (FY 2011), the State would apply the appropriate reduction of funding in its FY 2012 budget, rather than withhold funds already appropriated for FY 2011.

The bill also creates a new timeline for filing and considering the waiver requests. As an emergency bill, the legislation would be in effect upon its date of passage — meaning these rules would apply to any waiver requests to be filed for the coming year, FY 2011.

These changes are added to those proposed in the original bill, drafted to codify and expand the list of “considerations” for a county requesting a waiver. MACo had agreed with those inclusions, but had sought more substantive additions to the process.

MACo remains hopeful that the final version of this legislation to come from the conference committee will better reflect the troubling decisions from last year, and the need for a more expedited and balanced process for counties facing these most difficult situations.

Michael Sanderson

Executive Director Maryland Association of Counties

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