Look Ahead: Non-Recurring School Cost Entries Are Due March 31

A method in state law for identifying one-time school costs ensures that long-term funding mandates remain unaffected by short-term budget bumps, but approval for nonrecurring costs requires application to the State Department of Education, by March 31. 

Maryland’s “maintenance of effort” school funding law, enacted by the General Assembly, requires that counties maintain the same amount of funding for education per pupil each year. The maintenance of effort name derives from the concept that a county is maintaining a level effort towards education funding from year-to-year.

Some education costs are excluded from the maintenance of effort calculation, including:

  • nonrecurring costs that are supplemental to the regular school budget;
  • costs of programs that have been shifted from the school budget to the county budget; and
  • debt service on school construction projects.

For a county to exclude a nonrecurring cost from its maintenance of effort calculation, it must be approved by the State Board according to regulations promulgated by the Maryland State Department of Education (MSDE). Nonrecurring costs that represent funding above the county’s maintenance of effort payment may be removed from the school budget by the county.

Has Your County Submitted Its One-Time Costs to MSDE?

While annual recurring operating expenses of the school system are by law included in the maintenance of effort formula for county education funding, one-time investments are by law excluded, through their designation and approval as nonrecurring costs. This distinction – between nonrecurring and recurring costs – is essential to the balance of the maintenance of effort law which serves to provide budgeting stability and security for county governments and county school boards.

State “maintenance of effort” laws require a county to provide the same amount of education funding or more on a per-pupil basis each year. As such, maintenance of effort can discourage additional investment, especially during a faltering economic recovery, when future revenues are uncertain.

A legal provision called nonrecurring costs, however, allow county governments provide one-time school funding for one-time education costs without triggering perpetual mandates. The hitch is: the deadline for submitting nonrecurring costs is next month – before many counties even begin budget negotiations. Perhaps as a result of this process, relatively few counties take advantage of this education budgeting tool.

If Not, Now Is The Time To Speak With Your School Board About Non-Recurring Costs

Not all education costs are annually recurring per-student costs. Conversations with your school board may help to identify certain costs as a result of short-term programmatic or facility needs.

One-time education expenses might include costs to:

  • build new computer laboratories;
  • make technology enhancements;
  • start-up new instructional programs; or
  • purchase books for a school library

The mechanism for appropriately excluding these one-time education costs from the maintenance of effort calculation requires special approval. A county may apply to the Maryland State Department of Education (MSDE) for approval of a nonrecurring cost at any time throughout the year for additional budget appropriations. However, to receive approval of a nonrecurring cost in the next fiscal year’s budget, nonrecurring cost applications must be submitted to MSDE between January 1 and March 31
each year.

Data from the Maryland State Department of Education (MSDE) in 2014 revealed that on average fewer than eight counties per year take advantage of this budgeting tool. Learning this, MACo developed Non-Recurring Costs For County School Budgeting: A County Official’s Guide to the Process and Laws Behind the System.

Check Out MACo’s Non-Recurring Cost Guide For More Details

In the Guide, MACo aims to improve the accessibility and use of the nonrecurring cost exclusion, covering:

  • How does a county apply to have nonrecurring costs approved?
  • What categories of costs can be considered as nonrecurring?
  • When does the school board need to agree with the request?
  • What requests have been approved and denied in recent years?

All the submission forms, statutes, regulations, and guideline documents relevant to this process are provided in appendices to the Guide. (Please note that the guide has not yet been updated to reflect any change of provision location in state code, but an updated guide is forthcoming).

For more information, read the guide here.

Stay tuned to Conduit Street for the latest.

Useful Links:

Guide: Non-Recurring Costs For County School Budgeting: A County Official’s Guide to the Process and Laws Behind the System

Previous Conduit Street Coverage: Q&A on the Maintenance of Effort: Waiver Process, Escalator Effect