Final FY 2017 Budget Actions – Overview and Local Government Summary
The FY 2017 budget as passed by the General Assembly totals $42.2 billion, an increase of 4.9% over FY 2016. The operating budget, totals $17.4 billion, an increase of 3.5% from FY 2016, and leaves a projected general fund balance of over $400 million for FY 2017. The Rainy Day Fund balance exceeds $1 billion.
The budget as proposed fully funds every mandated program, some of which benefit local governments. Direct aid to local governments totals $6.5 billion an increase of 3.4% over FY 2016. When retirement payments are included, total aid to local governments for FY 2017 is $7.4 billion an increase of $261,235,302, or 3.7%. The largest dollar increase in funding is going towards education, $147 million.
A summary of final FY 2017 General Assembly budget actions affecting local governments is below. More detailed information of State Aid to Local Governments and a by county distribution can be found on the Department of Legislative Services website.
EDUCATION – Direct aid to education totals $5.57 billion, a 2.7% increase from FY 2016. The Foundation Program, the largest education funding component, is fully funded at $2.96 billion as is the Geographic Cost of Education Index at $136.9 million. The Foundation Program also includes special grants of $19.4 million for five jurisdictions that have lost enrollments and aid in recent years – Baltimore City and Calvert, Garrett, Carroll, and Kent Counties.
TEACHER RETIREMENT SPECIAL GRANT – An additional grant of approximately $19 million is being provided to fund the increase in teacher retirement costs associated with higher than expected normal costs. These funds just cover the increase due to the contribution rate. The school system is required to pay any increase tied to salary enhancements. These funds were provided by the General Assembly in the fiscal 2017 State budget; however funding is at the discretion of the Governor. MACo has submitted a letter to the Governor urging him to release these optional funds.
TRANSPORTATION – Local Highway User Revenues are funded at $177.4 million according to the current distribution formula – Baltimore receives 7.7%, counties receive 1.5% and municipalities receive .4%. The capital transportation grants totaling $53.6 million provided in the Governor’s proposed budget have been reduced to a one-time $25 million grant distributed $19 million to municipalities, $4 million to counties, and $2 million to Baltimore City — the same level of funding and distribution provided in FY 2016.
LIBRARIES – The libraries are fully funded at $53.4 million, a $2.3 million or 2.6% increase over FY 2016.
COMMUNITY COLLEGES – Community colleges are fully funded through the Cade formula at $234.4 million and an additional $16.6 million in unrestricted grants and special programs.
POLICE AID – Police Aid to counties and municipalities totals $73.7 million, a 9.6% increase over FY 2016.
LOCAL HEALTH DEPARTMENTS – Core funding to local health departments totals $49.5 million, an increase of $3.8 million or 8.4%.
DISPARITY GRANT – Disparity grant funding totals $136.7 million, an increase of $6.9 million or 5.3% over FY 2016.
PROGRAM OPEN SPACE – Funding for Program Open Space Local totals $27.2 million. This funding level includes transfer tax revenue totaling $21.7 million in POS Local and $5.5 million for two projects in Baltimore City.
SCHOOL CONSTRUCTION – A total of $334 million is being provided for school construction as follows – $280 million in the school construction program; $40 million for a newly launched program for public school districts with high enrollment growth ($20 million was provided in proposed budget, General Assembly increased by $20 million); $6.1 million for the Aging Schools Program (funded with PAYGO in operating budget); $4.6 million for federal Qualified Zone Academy Bond projects; and $3.5 million for improvements to aging non-public school facilities.