Does No MOE Waivers Mean No County Worries? (Spoiler: Nope)

Counties probably don’t have the data to ask for a Maintenance of Effort waiver by next week, the state deadline. Don’t interpret that to mean “this is fine.”

ThisIsFine
Definitely not your county budget officer

State law allows one window for counties to request a waiver from Maintenance of Effort of school funding – it’s right now, ending Monday April 20. With profound uncertainty about county economies, most (or all) counties will sit out this process, with no formal data or firm projections on which to base their FY 2021 concerns. One potential interpretation of this likely outcome would be: counties are planning to fund their schools at the required level, or higher, so there must not be any fiscal problem there.

MACo sees this as an issue of timing, and a letter this week to the State Board of Education explains the apparent mismatch in today’s actions versus tomorrow’s deep uncertainty. From the letter:

Local elected officials are facing considerable uncertainty as they seek to maintain balanced budgets in the current fiscal year—and develop budgets for the next one. The Maintenance of Effort waiver process, established in § 5-202 of the education article to create momentary flexibility in state funding requirements, is particularly ill-suited for a dramatic and unpredictable economic shock like the current health crisis.

The timing of the waiver request, the nature of the material supplied to the State Board to support such a request, and the built-in supposition that the financial challenge will be predictable and fleeting are all testament to this mismatch.

As we sit in April of 2020, amidst an unprecedented public health crisis with profound economic implications, no county government could possibly be prepared to develop and present a thorough and confident fiscal analysis for the next fiscal year. Fiscal staff from each county surely recognize the unique spike in jobless claims in recent weeks as one obvious and alarming indicator of uncertainty. There is no clear path forward. There is no way to predict whether these figures will continue for weeks or months. There is no way to know when or if or by how much these jobless residents may regain their prior economic station. If they can even get close to “whole,” there is no way of knowing whether that recovery could happen in the space of a fiscal quarter or a year or—more likely—longer.

Read MACo’s full 2020 Maintenance of Effort Waiver Letter

 

Michael Sanderson

Executive Director Maryland Association of Counties
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