No sooner had Anne Arundel County Executive John Leopold unveiled his proposed budget for next year than Superintendent Kevin Maxwell was complaining that the schools were being shortchanged by $12 million. It was the latest salvo in a long-running feud between the two men over what it really means for the county to maintain its state requirements for school funding. It's not entirely clear which one is right about the law. But what is clear is that the General Assembly was right to approve legislation this year adding specificity and teeth to its maintenance of effort law.
The argument between Messrs. Leopold and Maxwell goes back a year to the introduction of the executive's budget for fiscal 2012. Mr. Leopold, like many local leaders, was feeling the pinch of the recession, with the added pressure of Anne Arundel's strict voter-approved property tax cap. In March of 2011, he applied to the state for a waiver from maintenance of effort, arguing that the county should not have to meet the requirement to provide the same per pupil funding as the year before because it had exceeded that standard in the past. A decade before, schools had taken up 42 percent of the county budget, he said, but by then, they were up to 52 percent, squeezing out other essential county functions. The system, he said, needed to be reset.
But a month later, he withdrew his request, saying he would be able to meet the requirement. He hadn't found new money but instead a new way of accounting for what the county was spending. For the first time, Anne Arundel counted the value of debt service for school construction and renovation projects in its maintenance of effort calculations. Based on its interpretation of an opinion from Attorney GeneralDouglas F. Gansler's office, the Leopold administration calculated what its school spending from fiscal 2011 would have been with the debt service included, adjusted it for the number of students expected in fiscal 2012, and declared the law satisfied.
Mr. Maxwell argues that Mr. Leopold is misinterpreting the attorney general's opinion, and the matter is now before the State Board of Education for a decision. But this much is certain: The Anne Arundel County School System had $562,360,000 in county funds to cover the day-to-day costs of educating students in fiscal 2011, and despite an increase in enrollment, it had $556,105,600 for the same purpose in 2012. What Mr. Leopold did may have been legal, but it also shortchanged students.
The General Assembly clarified this issue for future budgets in its reform of the maintenance of effort law. It voted to forbid the use of debt service in maintenance of effort calculations, and Mr. Leopold didn't do so in the budget he unveiled this week.
But the effect of his accounting maneuver from last year, if it is allowed to stand, is to reduce the county's required per pupil spending for fiscal 2013 and hereafter. Two years ago, before Mr. Leopold brought debt service into the calculations, the county spent $7,712.59 per pupil. But in this year's budget, in an apples to apples comparison, he is proposing to spend $7,550.17 per pupil, a difference of about $162 apiece. Multiplied by the system's 74,300 students, that amounts to $12 million, roughly the same amount the school system lost last year because of Mr. Leopold's machinations.
If the board of education sides with him in his argument about the 2012 budget, he will have effectively reset his maintenance of effort amount without securing a waiver from the state or incurring any penalty in the process. Other counties have sought to get around maintenance of effort in recent years, but none have quite managed that trick.
If it the state board rules against Mr. Leopold, we could be in for a test of how well the new maintenance of effort law works to hold local officials to their obligations.
The purpose of maintenance of effort is to make sure that the state's decisions to increase spending on education actually have the desired effect. If county governments were not required to maintain per pupil spending from year to year, then increases in state aid for schools could, effectively, be substituted for local funding, thus negating state legislators' policy choices.
The problem under the old maintenance of effort law was that the penalty for non-compliance was the withholding of state school aid the next year — effectively, double-punishing students for county officials' decisions. Under the new law, the state can, instead, intercept county income tax revenue and send it straight to the school system. It also allows counties to break property tax caps if the money goes to meeting maintenance of effort. Mr. Leopold complains now that school funding is crowding out other services; he may like the alternatives even less.