DLS On Education Aid: MOE Fix Needed, Kirwan Follow-up Coming

Multiple issues arise in the Department of Legislative Services’ Analysis of the Aid to Education budget. They recommend a “fix” to the troubling Maintenance of Effort effects from this year’s proposed hold harmless grant/mandate combination. And, they suggest that a follow-up bill (as yet undrafted as the Kirwan bill has yet to be codified) will be introduced and considered this session.

Each year, the nonpartisan staff agency to the General Assembly develops its professional analysis of each component of the proposed budget. These documents guide the legislative review of that agency budget – but also typically highlight policy issues of importance for stakeholders in the agency’s services, or in the funding trends behind the bottom line.

This year’s Aid to Education report is deep with substance, and is a must-read for those following school funding through this unusual pandemic cycle, and outward through the phase-in of the newly passed Kirwan education plan. We’ll highlight a few things here.

DLS Agrees Maintenance of Effort Needs a Fix

Reinforcing a perspective shared at MACo meeting dating back to the fall (following the September student counts, unsurprisingly down in most jurisdictions), DLS argues that a one-time adjustment to avoid an enrollment-driven “glitch” in funding formulas is appropriate and warranted. Especially given the Governor’s budget approach to the FY22 funding challenge – which essentially includes State grants to “hold harmless” each school system, and an obligation that each county increase its total funding in order to receive that add-on State funding.

The DLS analysis concludes:

To address this issue, DLS recommends that the required MOE funding for fiscal 2023 be based on the fiscal 2021 per pupil local appropriation, which would be calculated using the greater of September 30, 2021,or the three-year average count excluding September 30, 2020 enrollment. This would eliminate the unusually low enrollment count and resulting unusually high local appropriation per pupil for some counties in fiscal 2022. DLS also recommends that the September 2020 enrollment count be excluded from every three-year average count used in the new funding formulas including the MOE under Chapter 36.

There’s Another Bill Coming

First, DLS offers their insight that legislation to attend to dates, timetables, and effects of the just-overidden Kirwan bill will indeed be forthcoming this session. The bill has been delayed because HB 1300 from 2020 (now enacted as Chapter 36 of the Laws of 2021, also known as the “Blueprint for Maryland’s Future” legislation, and arising from the Kirwan Commission) was only recently overridden and put into effect, and has not yet been codified to provide the platform for amendments to its contents.

However, DLS has made it clear that a clean-up bill is indeed coming:

These changes [to the Maintenance of Effort law] can be made in legislation expected to be introduced this session to address technical and other changes needed to Chapter 36,due to the delayed enactment of the bill.

Expect a bill introduction in the days ahead, with both technical and potentially substantive matters embedded.

Federal Fund Uses Should Be Clearer

DLS also reviews the substantial federal funds distributed, in waves, to school systems for coronavirus response and recovery, and identifies shortfalls in the transparency in the accounting for these funds. Their analysis recommends that the State Department of Education, presumably with input from each system, provide detailed accounting of federal funds, uses, and the like – to be required by “budget narrative” attached to the annual budget bill:

Read the Report, and Watch the Hearing

For more information, tune in to the legislative hearing on the Aid to Education Budget:

House Appropriations and Senate Budget and Taxation: Monday March 1 at 3pm

And, of course, read the full Department of Legislative Services budget analysis, with a broad review of school funding, coronavirus issues and effects, and the machinations of the Blueprint legislation already making waves.

Michael Sanderson

Executive Director Maryland Association of Counties
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