‘Rough seas’ ahead as MCPS budget could take $101M hit next fiscal year

‘Rough seas’ ahead as MCPS budget could take $101M hit next fiscal year

Total could approach $155M if county government seeks funding waiver

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Montgomery County Public Schools leaders are anticipating that COVID-19 will cause a “dire” budget situation in the next fiscal year, with projected revenue losses of about $101 million.

The cut would equate to a roughly 3.6% decrease in the school district’s $2.8 billion budget.

During a meeting of the school board’s Fiscal Management Committee on Monday, MCPS staff members said the county government also could seek a waiver to the state’s maintenance of effort law, resulting in up to another $52.6 million reduction. The maintenance of effort law requires county governments to fund the school district at least at the same level per pupil as the previous year.

MCPS Associate Superintendent of Finance Dan Marella said he does not know whether the county will pursue a maintenance of effort waiver, but the school district needs to prepare, just in case.

A spokesman for County Executive Marc Elrich did not respond to a request for comment on Monday.

County officials have projected losing around $192 million in tax revenue in the next fiscal year, Marella said on Monday. Following the 2007 recession, the county’s tax revenue decreased $188.2 million, he said, so “the current FY22 estimate already exceeds that reduction … which is very concerning for all involved.”

MCPS is projecting the following reductions in its budget for Fiscal Year 2022:

• $38.4 million in state aid

• $27.4 million in Kirwan Commission funding

• $36 million attributed to lower enrollment (through the first week of school, the district’s enrollment was about 2,400 fewer students than the previous academic year)

• Up to $52.6 million if the county pursues and obtains a maintenance of effort waiver

“All of that creates really rough seas going forward,” said Pat O’Neill, who’s been a school board member for 20 years. “… This is probably going to be the most difficult budget cycle in my time on the board.”

Fellow board member and committee chair Jeanette Dixon said she is glad MCPS has not furloughed or laid off any employees as a result of the pandemic. But she suggested that the district explore opportunities to combine positions left vacant by staff members who have retired.

Marella said MCPS is being “as careful as we can be right now with filling positions.” He top administrators often discuss whether a vacant position should be filled, “knowing we’d have to make cuts in other staffing areas.”

School board members said MCPS must evaluate whether the central office is overstaffed.

“Central office positions are going to have to be barebones and they’re going to have to take a scalpel to every one of those offices,” O’Neill said. “There’s no way we’re going to be able to maintain things centrally the way they are right now.”

MCPS Superintendent Jack Smith is expected to present his recommended budget for the next fiscal year on Dec. 3. The school board will hold public hearings about the proposed budget on Jan. 11 and 19, then send the budget to the county council for consideration in February. The school board will give final approval to the budget on June 10.

Caitlynn Peetz can be reached at caitlynn.peetz@bethesdamagazine.com

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