This article is part of MACo’s Deep Dive series, where expert analysts explore and explain the top county issues of the day. A new article is added each week – read all of MACo’s Deep Dives.

For the 2024 legislative session, MACo leadership adopted four major policy priorities. One of those initiatives focused on increasing transparency in education spending and hinged on the belief that all education stakeholders benefit from a clear understanding of the sources and uses of public school funding. The primary goal of this effort was to ensure county governments, and other community stakeholders, receive more comprehensive and timely data about school system spending as all jurisdictions prepare for a sustained, multi-billion dollar new investment in education over the next decade.

To this end HB 1115/SB 1026 were the vehicles for making a handful of updates to the statute establishing the Blueprint for Maryland’s Future. With the 2024 session in the rearview mirror, and the cross-filed bills now passed and signed into law, this article will explore what changes materialized from this initiative at the conclusion of the General Assembly’s work.

What Were Counties Asking For?

Currently, county governments fund roughly half of all public education spending in Maryland. As primary funding agents, and direct beneficiaries of the envisioned success, counties have a lot at stake in the outcomes of the Blueprint. Having a clear sightline into the financial forecasts and projected outcomes helps build community trust in the process. Additionally, transparency establishes continuity with the procedures and requirements adhered to by all other local government agencies with regard to the local budget process.

Improvements to the Blueprint law to meet these goals were necessary and included:

• easier access to the existing required reports
• additional information about reserve and federal funds
• transfer approval for moving funds across categories
• public-facing documents with primary financial details

These were the four major elements of what counties were hoping to gain from the new legislation. The level of financial reporting required by the Blueprint is already historic and counties want to ensure that accountability and transparency is carried out across the board. County funding will bring the dreams of the Blueprint to life, and transparency in the process contributes to the public trust and assent that the system requires.

What Are the New Requirements?

HB 1115/SB 1026 passed during the 2024 legislative session and has been signed by Governor Moore. The bill comprises a few new requirements for the financial reports of local school boards including:

• requires statewide procedures for uniform budget reporting to local governments from local school boards
• mandates additional reporting of school system reserve funds and federal dollars as well as spending forecasts for those resources
• ensures public posting of required reports in an accessible manner on school board websites
• dictates the submission of reports to additional members of county leadership

Is Anything Missing That Counties Wanted?

One of the primary points of debate on HB 1115/SB 1026 was a section of new language around when and how funds can be transferred between spending categories. The bill as introduced mandated that transfers over 1 percent of the total funding in a major category would require prior approval from the local governing body unless the timing would result in a loss of opportunity (like receipt of federal grants). Transfers made without prior approval would still need to be reported after the fact.

This section of language was adjusted a number of times in both House and Senate deliberations to try and meet the concerns of various stakeholders, but was ultimately struck from the bill entirely, amidst a variety of complicating factors. There may be potential for such measures to be considered again in the future, guided by the feedback and adjustments made to these bills prior to the section being removed as a two-chamber compromise (with MACo’s agreement).

Why Not Full Line Item Control, Like We Have With County Agencies?

Discussions with county officials frequently pointed in this direction: “the school budget is the biggest thing we fund, and the thing we hear the least about.” Many county officials expressed interest in county control at the line item level, comparable to that wielded over the county’s internal agencies.

Maryland has crafted a balanced system, and has deliberately invested decision-making in the actual operations of the school systems — curriculum, detailed spending decisions, and the line — with the Boards of Education. The State Board of Education offers a variety of guidance and direction to its local boards, but Maryland has relied on substantial “local control” through these officials, and their Superintendents as chief executive officers of each system. Maintaining a space between the more directly political actors (the county governing bodies) and these operational decisions is a time-honored, and seemingly immutable, decision by Maryland policymakers.

Recognizing this careful equilibrium, MACo did not seek to upend any of this true “governance” structure, nor seek to gain operational control of the school systems’ budget – but rather to support legislation to create more transparency and objective analysis through the current school board processes.

What’s Ahead?

All the existing financial reporting deadlines required in statute remain the same. The provisions of the HB 1115/SB 1026 will simply be rolled into those timelines starting July 1, 2024 – and should take effect in practice when the FY 26 budget consideration starts next year. Several new components of the school boards budget request should be included in the submission to the county governing body at that time. In accordance with this timeline, and requirements of the new legislation, the State Board of Education shall establish a uniform process for the submission of all required budgetary information, which should yield more uniform and complete documentation for county governing bodies and other interested parties, as well. As of now, each jurisdiction has submitted an implementation plan to the Accountability and Implementation Board. Those reports can be found on the AIB website.