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The administration's proposed budget, which is $48 million under the school system's record high request of $856 million and includes a $18 million increase in county funds over last year, will result in tough budgetary decisions ahead, officials said.

Howard County Executive Allan Kittleman's $808 million proposal fully funds negotiated salary increases, special education and 56 new teacher positions. The most significant cut from the Board of Education's request removes $39 million requested for fixed charges, a category that includes but is not limited to employee benefits and insurance. Compared to last year, the budget increases fixed charges funding by 3 percent.

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The cut will deepen a projected deficit in the school system's health fund, which could end in a deficit of $8 to $12 million, said Beverly Davis, the school system's budget director. Although the school system projected a health fund deficit in fiscal year 2015 and warned of a looming deficit in the last two budget cycles, the fund ended with a $1.6 million balance last year.

Davis said, this year, the deficit is especially concerning.

"It's a politician's move. [The county executive] wants to be able to say 'I've funded the raises,' " said Davis. "If the county wants the board to have a huge deficit and have to borrow money to pay its bills, that's the only way ... this works."

Kittleman said his proposal, which includes $18 million more from the county than the 2016 budget, lays budgetary priorities that align with taxpayers' concerns.

The County Council will hold a public hearing on the operating and capital budgets for education at 7 p.m Monday at the George Howard building.

"I'm sure [the health fund] got into a deficit over time. You can't fix that problem right away and again the county has not put them in that situation. We're doing the best we can and they'll have to decide what their priorities are. My priorities are teacher salaries, special education and making sure our students and teachers have what they need to be able to succeed," Kittleman said.

Paul Lemle, president of the Howard County Education Association, doubted the health fund will run into a deficit, citing historical "multi-million dollar surpluses" because "educators are, on average, very healthy."

In recent years, the health and dental fund has had strong ending fund balances between $21.6 million in 2011 and $13 million in 2014. In 2015, the health fund dipped to $1.6 million, records show.

"HCEA is working with the [board] to keep costs as low as possible. We have requested competitive bids for medical and prescription coverage in 2017," Lemle said.

But this year, the school budget must absorb last year's salary increase of $12.7 million, a $6.8 million increase in teacher pension costs and $24.9 million for employee benefits, Davis said.

The additional costs will force the board to make painful cuts to preserve salary increases for next year within the administration's proposal, Davis said. Examples include three staff furlough days in 2017, cutting 192 positions from the budget and increasing class sizes by three students across all levels, except kindergarten, Davis said.

"When 95 percent of your budget is people, you cut people costs," she said.

Davis said the fund's deficit would be reduced — not eliminated — even if the administration fully funded the board's request.

"If they have a deficit, it wasn't because of the county's management. They managed it. If it's something that's been happening over time, it's going to take some time to fix it," said Kittleman.

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Ellen Flynn-Giles, vice chairwoman of the board of education, said she was concerned the budget does not cover all aspects of the negotiated agreements with teachers, like health care benefits, along with new positions required to meet the needs of next year's new students.

The association is concerned about potential impacts on students and class sizes, given an expected enrollment growth of more than 1,000 students a year, Lemle said.

Overall, Kittleman said he was concerned about the increase in the board's requested operating budget, which increased dramatically over last year's.

In the fiscal year 2015 and 2016 budget, the board forecasted a $793.4 million request for fiscal year 2017, a number in line with roughly $20 million year-by-year increases in previous years. This year's request, however, jumped to $856.4 million, with projections from 2018 to 2020 leveling back to relatively stable yearly increases. Giles said the jump is primarily the result of costs added to cover negotiated salary increases and fast-growing health costs.

Overall, the increased request, Kittleman said, begs the question: "Are you trying to fix it all at one time?"

In a measure pre-filed Thursday, the board is seeking a transfers between major categories of the fiscal year 2016 operating budget, including a $7.2 million transfer to the fixed charges category. The measure is a routine way to shuffle balances from between funds, if approved by the County Council, Giles said.

To sign up to testify at tonight's budget public hearing, go to https://apps.howardcountymd.gov/otestimony.

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