Schuh Transfers $5M to Keep Health Care Fund Afloat

Anne Arundel County Executive Steve Schuh announced Thursday a plan to transfer $5 million to Anne Arundel County Public Schools’ health care fund, to save the school system from resorting to more drastic measures like furloughs and layoffs to pay its medical bills.

According to The Capital Gazette,

The school system ran out of money in its health care fund in February and transferred $2 million from a surplus fund to pay for health care. The system will rely on the $5 million from Schuh as well as about $1.3 million from other parts of the school budget to pay its bills until the end of June.

“We committed last June to doing what we could to assist the school system if needed, and this is the next piece in a multistep plan to ensure we can fix the school health care funding crisis once and for all,” said Schuh in a statement.

The health care fund has faced deficits in the past two years, with expenses exceeding revenue by about $20 million each year.

Health care expenses have risen with medical costs. And as school officials hire more staff to teach a growing student population, they put more people on their insurance.

To fix the funding problem, the school board is renegotiating its health care insurance plans with unions to shift more costs to employees.

The county board is also asking the State Board of Education to allow the county government to make a one-time allocation of $22.5 million for school health care costs for the fiscal year beginning July 1. This would exempt the system from the state law that requires the level of per-pupil funding in one year to be matched in all subsequent years.

Last year, the state board allowed Schuh to put $10 million into the health care fund without counting it toward that recurring cost requirement. But it also asked county and school officials to come up with a plan to curb long-term costs.

County and school officials say the $22.5 million allocation, renegotiated health care plans and increased school health care funding will bring revenue in line with expenses in the next two years.

“This is not a place in which any of us wanted to find ourselves, but it is unfortunately the place where we are,” schools Superintendent George Arlotto said in a statement.

“We have scrimped and saved money throughout the year to try to be able to keep our health care fund solvent through June. Despite those efforts, it now appears we will not be able to do so. We appreciate the county executive fulfilling his promise to work with us and bridge the gap if necessary.”

The school system signed a contract with the health insurance provider CareFirst earlier this year that is expected to save $16.9 million from 2018 to 2020.

Bill Jones, the director of the Teachers Association of Anne Arundel County, said the deficit resulted not just from increased expenses but also from insufficient funding and decisions by county officials to take money from the health care reserve fund to pay for other things.

The teachers union is expected to vote on its proposal to increase co-pays April 5.

The County Council will introduce a resolution Monday to support the school system and Schuh’s request to the state Board of Education.

Councilman Chris Trumbauer, D-Annapolis, said fixing the schools’ health care fund is the most important item in the budget. The problem is a “shared responsibility” for all the county’s leadership, he said.

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