MSDE Releases 5-year Report on Maintenance of Effort Exclusions

A report sought by MACo and required by the General Assembly has shed more light on the “nonrecurring costs” element of the state’s Maintenance of Effort (MOE) law. This provision, used intermittently by numerous counties, allows one-time funds above the MOE requirement to be excluded from the subsequent year’s MOE base allowing counties to make such one-time investments without becoming trapped into a perpetual funding mandate.

Read the full report online.

Under the current MOE law, counties are required by the State to maintain the same amount of funding for education per pupil each year.  While the law intends some flexibility for one-time costs and times of economic distress, these provisions are only sporadically used by Maryland’s 24 local jurisdictions.  MACo has advocated that part of the reason why is the process constraining the way local jurisdictions may apply for exclusions and the laws requiring State Board of Education approval for waivers.

As described in budget language from last year’s Maryland legislature, “Greater transparency in the costs that are considered nonrecurring, and thus may be excluded from the required maintenance of effort amount that counties must provide to their local school systems, may incentive counties to provide more local funding to public schools.”

The Maryland Department of Education recently delivered the report required by the Budget Committees last year on nonrecurring cost approvals and denials over the past five years.  MACo sought improvements to the nonrecurring cost process that would allow counties the chance to have meaningful conversations about costs during local budget negotiations before the door closes on applications to the State for nonrecurring costs.

Counties are the principal unit of local government in Maryland, and, unlike in many states, counties in Maryland are responsible for funding public schools, libraries, and local community colleges. While local boards of education develop local school budgets and oversee education-related spending, they are dependent on financing from county governments. In fiscal 2014, local governments provided 46% of total revenues for local school systems, according to the Maryland Department of Legislative Services.

For more information, read the Report to the Budget Committees and see our previous posts, Budget Will Require MSDE Report on “Nonrecurring Costs”Delegates Show Support for Nonrecurring Cost Legislation, and Early Deadline for Submitting School Costs as “One Time”.