MOE “Escalator” Could Affect 9 Counties in FY16

A provision of the 2012 legislation greatly expanding the state’s “maintenance of effort” law requiring county school funding may trigger direct increases in nine county school requirements for the coming year. For counties funding below a rolling state average of education effort (as calculated by law), a wealth-based escalator clause could mandate not simply maintaining per-pupil school funding, but increasing it.

In Maryland, county governments partner with the state to fund k-12 education. According to the Maryland Department of Legislative Services, in fiscal 2009, county governments were the source of 48% of all funding for public education in Maryland and provided $5.5 billion to their schools in fiscal 2013.  Recently passed state laws altered the amount of funding that counties are required to pay toward education, often employing some complicated formulas to determine funding levels from year-to-year.

The Maryland State Department of Education recently released a memo  indicating that by its calculations, nine counties in Maryland could be caught by a relatively new provision requiring them to increase their funding for k-12 education in FY2016.  As described in the memo,

According to Chapter 6 of the 2012 Legislative Session, counties below the statewide five-year moving average education effort level are required to increase their annual per pupil maintenance of effort (MOE) amounts.  Nine counties are subject to the increase in MOE in FY 2016.

The increase in MOE will be the lesser of: the county’s increase in local wealth per pupil; the statewide average increase in local wealth per pupil; or 2.5 percent.  Data is not available at this time to calculate the additional MOE requirements.  MSDE will provide this information as soon as it is available.

If this happens, FY 2016 will be the first year that the escalator clause is implemented.  The clause was in effect last year, but because the statewide average local wealth per pupil was decreasing last year, no county was forced to increase its MOE payment.  The same could be true this year, however the wealth per pupil calculations are not yet available.

The nine counties subject to the increase, according to MSDE include,

  • Allegany
  • Baltimore City
  • Caroline
  • Dorchester
  • Garrett
  • Kent
  • Talbot
  • Wicomico
  • Worcester

For more information, see the memo from MSDE and our previous posts, County Budget Officers Meet to Discuss New Maintenance of Effort RequirementsMOE Bill Escalates School Funding, Needed or Not.