Leonardtown, MD — The new Commissioners of St. Mary’s County will be faced with a considerable challenge over what to fund for education as they begin budget deliberations. Education was listed as a priority in many of their campaigns.
As Interim School Superintendent Scott Smith told the school board Thursday, Jan. 22, “It all comes down to money.” In this particular case the money equals $7 million or the additional amount Smith is recommending the county pony up to fully fund his request.

According to Smith, new figures show that the county won’t be obligated by state law to fund anything additional to meet the so-called Maintenance of Effort requirement.

The problem for the county is, at this point, forecasts are showing only $4 million more in revenue available next year, although the commissioners are blessed with having a fat undesignated fund balance that they also can tap. They have been reluctant to do that in previous years because of the uncertain economic future.

The school board on Thursday held a short budget workshop in which the members expressed pleasure with the document they received from Smith and Assistant Superintendent of Fiscal Services and Human Resources Tammy McCourt. The school board members asked questions but made no suggestions for change. They will make a final decision after their budget public hearing sometime next month.

At the workshop Smith emphasized the three major components of the proposed $7 million budget increase:

• “Captain Walter Francis Duke Elementary School – recurring operating cost of $2 million;
• “Healthcare Costs – increase of $2 million; and
• “Negotiations – increase of $4 million.”

McCourt then gave board some more details about the three issues. For the new school opening it was explained that the previous estimate of a $3 million price tag was reduced by one million dollars by transferring a number of employees, including 23 classroom teachers, from other schools.

Smith said an effort would be made to have teachers follow their students who are being transferred to the new school.

School board member Cathy Allen wanted to know how the $1 million reduction came about. Smith said the additional $1 million would be difficult to sustain “considering the current revenues.” He added, “This is the most prudent way we can cut funding to open the school.” He said he didn’t want to have so much money assigned to cause a discussion about whether the school opening should be delayed.

McCourt noted that the Consumer Price Index is 1.7 percent so inflation is impacting employees. Recently federal retirees were given that increase and federal workers are getting a one-percent increase. Because of the school system’s budget crisis last year, the system employees got no STEP or Cost of Living Increases. The $4 million is intended to make up for the deficit of two STEP increases owed the employees on July 1.

The school system is still in negotiation with their three employee unions and the status of those negotiations is not known. The public hearing could give an indication whether the employees are satisfied with that proposal.

The extra monies for healthcare are intended to increase the reserve for those costs. That reserve is now at $3.3 million, up from this year’s budgeted $2.5 million, due to cost savings this year. A clearer picture on that will be available next month.

Smith said if the healthcare cost reserve ultimately isn’t needed it can be transferred to the reserve for retiree health costs, known as OPEB or Other Post-Employment Benefits.

New Board of Education President Karin Bailey, who herself is an accountant, expressed pleasure at the new formatting and additional budget details made available to them.  She said the budget was presented in a way that was consistent with an organization the size of the school system.

“We have done everything to be fiscally prudent,” said McCourt, who described herself as the ultimate fiscal conservative.

Copies of the budget are available on the school system’s website at www.smcps.org

It will be up to the commissioners to decide whether they believe that’s the case. The commissioners have their first budget workshop of the new year on Monday, Jan. 26 at 1:30 p.m.

Contact Dick Myers at news@thebaynet.com