Montgomery County: Education Costs Increasing

According to the Washington Post, Montgomery County spends roughly half of its $4 billion operating budget on K-12 education. But a County Council staff analysis found that state mandates created by the General Assembly in 2012 could turn education funding into what one council member called “a runaway train.”

The increasing costs are due to the teacher pension shift and maintenance of effort, according to the Post,

Last year, state lawmakers approved a proposal by Gov. Martin O’Malley that shifted part of teacher pension costs to the county level. Maryland is among the many states facing vast, unfunded liabilities in their employee retirement programs. A 2010 study by the Pew Center on the States estimated that states are at least $1.4 trillion short of meeting their commitments for retirement benefits. Montgomery’s required annual contribution to teacher pensions, $27.2 million in the current fiscal year, will grow to $44.3 million in fiscal 2016.

Legislators also tightened “maintenance of effort” rules, which mandate that schools receive, at a minimum, the same rate of per-pupil funding as in the previous year. The county spent a total of $576 million over the mandated minimum between 2001 and 2009, but continued extra support became more difficult with the recession.

For more information, see the full story from the Post.  For more information on the teacher pension shift and maintenance of effort, see our previous posts on Conduit Street:

Teacher Pension Shift and Its Effect on County Government

County Budget Officers Meet to Discuss New Maintenance of Effort Requirements