Long-Awaited MOE Bill Suddenly On “Fast Track”

Following weeks of broad speculation about private negotiations and agreements, a bill to dramatically reform the state’s Maintenance of Effort (MOE) law for county school funding has been introduced, with a leadership-heavy House sponsor line. Informal word has indicated that both the Senate and House plan to hear testimony on the substance of the freshly-introduced 17-page bill HB 1412 as part pf their testimony on the Budget Reconciliation and Financing Act legislation, scheduled for Wednesday and Thursday of this week.

Click here to see bill information
Click here to read the bill text as introduced

In brief, the bill would make numerous changes to the MOE system, described below:

Establishes MOE as an absolute requirement for county funding – any county missing MOE and not receiving a state waiver would see its county-set income taxes withheld and diverted to the board of education budget

-For counties missing MOE in FY 2012, denies ability to “rebase” and sets FY 13 MOE amount based on prior year funding levels

Allows a county to exceed current tax limits to meet MOE – authorizes counties to follow process to raise property tax rates above current charter limitations, or to raise income tax rates above the current state limit

-Beginning in FY 2015, for counties with lower than state average “education effort” (defined in the bill), the MOE funding requirement would be escalated each year by a wealth-based growth factor

Creates a new scheme for a “rebasing waiver” process for counties facing long term financial distress (many details in the bill text on this) but already making a greater than average “education effort” (this process appears to be specifically available for the counties missing MOE in FY12)

-Creates a new system for identifying reductions in recurring costs, by county/school board agreement, and to reduce part of those savings from MOE base

-Adds a range of procedural and timing issues to the waiver process, largely similar to those contemplated in 2010 and 2011 legislation (MACo had sought stronger changes here, but supported the process bills in 2010 and 2011)

MACo will continue to add details on the bill provisions as our analysis of the newly-minted bill evolves.

Michael Sanderson

Executive Director Maryland Association of Counties

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