| Superintendent Presents 2021–2022 Operating Budget Proposal|
Superintendent Michael J. Martirano presented his proposed operating budget for the Howard County Public School System fiscal year 2021–2022 (FY 2022) during a presentation to the Board of Education on Thursday, January 21, 2021. The Board will now hold a series of public hearings and work sessions before submitting the Board’s Requested Budget to the County Executive by March 1, 2021. The budget proposal requests the funding needed to maintain existing levels of services and supports for students, staff, and schools. The proposal accounts for enrollment growth, sustains the school system’s recent investments in technology and software, addresses critical shortages in special education, and enhances funding to support student mental health services and dyslexia and reading instruction. The FY 2022 Proposed Budget totals $932.4 million, representing an expenditure increase of $13.8 million, or 1.5%. If advanced by the Board of Education, the request to the county of $642.4 million represents $22.1 million, or 3.6% over FY 2021. Also included are $282.7 million in anticipated funding from the state, consistent with the FY2021 allocation; and $667,100 in federal and other funding support, representing an expected decrease of $375,000 compared to FY2021. The final amount of funding allocated to the school system is subject to change, based on state actions on MOE requirements, state funding levels, and county funding availability.
Some Retrospect and Prospect after HCPSS FY 2020-2021 Budget Vote
Some Retrospect and Prospect after HCPSS FY 2020-2021 Budget Vote
By Dr. Chao Wu,
Board Member, Howard County Board of Education
After the FY 2020-2021 budget vote, I reflected and wrote a short essay on this. Hopefully this will help and guide us for the next year’ HCPSS budget discussion. The article has the follow sections:
- FY 2020-2021 Operating Budget Snapshot
- Funding Increase Needed for FY 2021-2022
- Funding Category is Complicated
- More Communication to the community
- Future Budget Process Improvement
- County Tax and HCPSS Budget
I want to thank every teacher and staff members who have been working really hard during this unprecedented time. I want to give every teacher a raise, a competitive salary among neighboring counties. I want to raise our substitute teacher salaries to be competitive with other counties too.
Unfortunately, we have to make a budget based on how much money we have and what we can do. We are not laying off any staff. Job security for our staff is my number one priority in this challenging situation. We are still providing an average 2% salary raise for teachers and 1% for AMT staff. We are ramping up support for special education. We are fully funding the health care cost and gradually reducing the historical health fund deficit. We are able to continue on the equity path to provide quality education to all students. As an intermediate solution, we are seeing another class size increase for three consecutive years unfortunately.
I thank our staff, the superintendent, and all bargaining units, who have come together and make the budget happen.
After the vote, I have been self-reflecting on the budget process and where we can further change and continue to improve, especially for our future budget.
FY 2020-2021 Operating Budget Snapshot
The board unanimously adopted its FY 2020-2021 budget on Thursday, June 18,2020. The operating budget is 918.7 million, an increase of 17.2 million over FY 2020. We used a 5 million fund balance for FY 20-21 budget. Among the efforts:
- adding 106.8 new positions for special education
- increasing employee compensation on average by 2% in the bargaining units, with 1% increase for non-represented(AMT) staff
- accelerating HCPSS’ diversity, equity and inclusion work through addition of three new positions
- funding actuary projected employee health insurance cost fully, for three consecutive years
Unfortunately the class size will be increased for the third consecutive years. On average, elementary school will increase class size by one in FY 2020-FY 2021. Middle school and high school will increase class size by 1.25.
Funding Increase Needed for FY 2021-2022
I have been asking HCPSS staff to project our future funding needs. Instead, I created a short table as follows with explanations below. Please note this is not an extensive or complete or accurate list. This is a rough projection.
|Budget Increase Need Per Year||Amount|
|Student Growth Budget Need (800 new students)||10.22 million ***|
|Fully Fund Health Care||5 million|
|Possible COLA Salary/Step Increase for Our Workforce||6 million|
Student Growth Cost
Board Approved Tuition Rate: In-State Elementary/ Secondary in the amount of $10,650 and Special Education in the amount of $31,950.
Each year, the school has around 800 new students, where 10% are special education students. The total county cost for student growth is around 10650*720+31950*80 = 10.22 million.
So we need to invest extra 10.22 million dollars to catch up with the student growth each year. Please remember the county funding formula (MOE) for HCPSS is using the student population from the previous year such that this extra 800 new students are not funded in the formula. This is the common problem for many school systems which see a continuous student growth and the funding increase could not catch up with the increased need.
This section may be updated depending on how this calculation is revisited based on feedback from our staff and other people. Another calculation I am thinking is to use the average per student cost, which is around 16k. Then the total is 16k per student per year * 800= 12.8 million.
Health Care Cost Increase
On average, the health care cost increase is around 5 million dollars per year. In some years, it was an 11 million dollars increase.
In the past 10 years, our workforce has received a salary increase between 1% and 5%. That is the reason I am writing a possible 1% increase at least. The 6 million dollars is an estimate based on this year’s 2% salary increase (12 million dollars).
Historical Health fund deficit
We have a historical 32 million dollars health fund deficit inherited from former superintendents’ era, which has to be paid down over the years. With the plan worked out with the county government, we need to pay around 8 million dollars per year to pay it down. The original deficit was 50 million dollars.
Funding Category is Complicated
During the discussion, we heard the teacher salary (State Category 2) increase was fully funded. In reality, when there is an increase of salary, other expenses (benefits, retirement) will go up as well. We will not be able to give a teacher salary increase, but not give them the associated benefit increase. So unless everything associated with a full compensation package for an employee is fully funded, we could not call the salary increase fully funded.
Second, many teachers’ salaries are not funded in State Category 2. For example, there are more than 1200 special education teachers whose salaries are not funded in Category 2.
Third, the health care cost keeps increasing at a faster pace than anything else. In order to avoid the health fund deficit issue that happened before ( with an accumulated deficit of 32 million now), we need to fully fund the health care cost. The school system cannot run at a deficit by law.
It is a little complicated and I want to make it easier for the general public to understand it.
More Communication to the community
During the last two weeks of the budget discussion, we received thousands of emails asking the board not to cut the budget. In reality, the board is not generating money ourselves. We fully rely on the funding from the county and the state to operate. They give us money and we make a budget and balance the budget.
Furthermore, when the board was in negotiation with the unions, we were not allowed by law to discuss anything about employee salary and benefit publicly. We were not able to comment on the negotiations publicly. The public and our workforce definitely felt the frustration because of the communication restriction on these topics. We had to rely on the union leadership to relay the message back to union members.
Future Budget Process Improvement
For the school budget, if we don’t ask for it, we don’t get it from the county government and the county council. At the same time, we know the county has so much need and we will not get the full amount we ask. So we have a very delicate balance here since we want to present a fair and reasonable budget for discussion.
Furthermore, the county executive and the county council can claim they fully fund something by State Category. However, all categories are interconnected when our staff is preparing for the budget. In general, we are not able to separate one category totally from other categories while considering funding.
Realizing our funding will be short for the near future, I have been advocating for a change in the budget process to avoid the last minute change and uncertainty which is painful and hurts the morale of our workforce.
We could consider a budget into two parts.
- The first (basic) part is the Maintenance of Effort (MOE) budget which the county and the state are bound legally to fund the school. At the MOE level, we can check to see:
- whether the class size will increase or not,
- whether our workforce will be surplused or not,
- where the special education will be fully funded or not,
- whether the health fund is fully funded or not,
- whether the instruction materials are fully funded or not
- The second part is the add-on above MOE part. Based on our need and priority, how much extra money we need to fully fund the school system.
- whether/how we can decrease class-size.
- whether /how we can add/change programs.
- whether/how much we can give our teacher a salary increase.
- Whether/how we can renovate school service without increasing budget
- whether we can launch any new initiative to improve mental health service, further close the student achievement gap, and many others.
County Tax and HCPSS Budget
Many people are now realizing that HCPSS is facing a structural deficit issue. The funding increase could not catch up with the student population growth and other increasing needs.
In reality, the share of the county funding into HCPSS is swinging up and down. HCPSS budget was previously mismanaged and underfunded such that we are facing such a difficult situation now.
We hear there are people calling for higher tax. However, tax for our county residents is very high already. Our tax rate is top 3 in Maryland. Raising tax may have a detrimental effect on our economy and in the end it may hurt our tax base in the long run.
Furthermore, additional tax revenue does not mean it will be provided to HCPSS. I want to avoid the failed promise and fiasco that Maryland state gambling money would go into education when some people promoted the gambling industry. Yes, some gambling money went into education, but original money was diverted away.
The county may receive 20 million dollar additional revenue by increasing some tax rate, but the county may give only 1 or 2 millions to HCPSS. I have been advocating for HCPSS to receive a larger share (percentage) of the county revenue.
There are many “wants” in the county budget and we may need to shrink those “wants” and redirect the money to HCPSS. Our excellent school system is one of the most important reasons that many families come here and 90% of county revenue comes from property tax and income tax.
We need to cherish the support and trust from families who live here and HCPSS must provide an excellent, equitable and individualized education for our students.
Thanks for reading this.
Update on HCPSS FY 2021 operating budget
Here are the materials we discussed tonight.
Funded by State Category
Timeline for the County Council
2021 HCPSS 30.9 million dollar budget gap
We are grateful that the county executive Dr. Ball recommended a funding level of $620.3 million, which is 2.7 million above the MOE formula and another 6 million dollar one time funding to reduce the health fund deficit. The total increase of funding is 13.1 million more than FY 2020 approved budget. Note the MOE is using last year’s student enrollment number, which is around 800-1000 students less than the real student number. This translates to 10.8-16 million MOE funding shortage (assuming per student spending 16k a year).
So there is a gap of 30.9 million dollars between the board approved 2021 operating budget and the county executive proposed funding, while assuming the state funding will not decrease.
As quoted in Baltimore Sun article, I said:
with such a dramatic gap between the need and the reality, all stakeholders, including the school, the county government, the county council and the community, need to prioritize our spending and change our spending habit.