Maryland State Board of Education Reviews Local Funding Requirements

At the December 16, 2014 meeting of the State Board of Education, the Board heard a presentation on state-imposed local education funding requirements – called maintenance of effort – and the process for waivers from those requirements.

The memo gives an historical perspective of the maintenance of effort (MOE) law,

In 1996 the MOE law was amended to allow local jurisdictions to apply to the State Board of Education for a one-year waiver form MOE. However, that process was not tested until 2009 when three counties applied for waivers from the fiscal year 2010 MOE requirement. The State Board denied all three waiver requests.

Two counties applied for a waiver in fiscal year 2011 and both were granted.  The State Board did not receive any waiver requests for fiscal year 2012, yet seven counties were identified by MSDE as not complying with the MOE requirement. On May 25, 2011 the State Board issues an opinion stating that the MOE statute does not require a county government to request a waiver.  As such, counties were able to rebase their MOE requirement at a lower level without State Board approval.  As a result, the General Assembly decided to conduct a comprehensive review of the MOE law. Legislation was adopted during the 2012 session that requires counties to apply for a waiver, alters the MOE penalty, refines the entire MOE process, and sets procedures for counties that want to rebase the required MOE amounts.

In the memo, Education Secretary Lillian Lowery also describes the relatively new funding escalator in the maintenance on effort law,

Beginning in Fiscal Year 2015, counties with an education effort below the statewide five-year moving average education effort must increase the per pupil MOE amounts by the lesser of:

  1. Increase in local wealth per pupil
  2. Statewide average increase in local wealth per pupil
  3. 2.5 percent

For more information, read the SBE Meeting agenda, Maintenance of Effort memo and presentation, the State Board of Education, our recent post, MOE “Escalator” Could Affect 9 Counties in FY16, and our past posts, MOE Bill Approved By House Subcommittee, Untouched, MOE Legislation Will Bring Major Changes To County/School Relationships.