Montgomery school budget solution could cost millions in fines

By Nelson Hernandez
Washington Post Staff Writer
Thursday, November 5, 2009

The Montgomery County school system could be forced to pay millions of dollars in penalties under an opinion Wednesday by Maryland's attorney general that its county government had "artificially" satisfied a state law that sets a minimum funding level for education.

The 21-page opinion issued by Attorney General Douglas F. Gansler could leave Montgomery County liable for $16 million to $64 million in penalties, county officials said. The state Board Of Education will decide whether to penalize the school systems.

"I'm disappointed but not surprised," Montgomery School Superintendent Jerry D. Weast said in a statement Wednesday night. "In the end, we had a solution pushed upon us that, it turns out, was illegal. I guess no good deed goes unpunished."

Gansler said Prince George's County committed the same violation, but School Superintendent William R. Hite Jr. said that, based on the formula used to calculate the penalty, he is unsure whether his school district will have to pay anything. "I don't know," said Hite, who had not seen Gansler's opinion. "I need to look at that just to make sure."

Both school systems, the largest in Maryland, have cut their budgets significantly. Prince George's eliminated hundreds of jobs over the summer, and any additional cuts would probably affect students, officials said.

"We may face a fine from the state, and the brunt of that burden will be felt by our students and teachers at a very critical time," Weast said of Montgomery's predicament.

The opinion is the latest development in a debate over the funding of schools that has raged since March, at times pitting county governments against school boards, and both against the Maryland State Board of Education.

The central issue has been the ability of local governments to comply with Maryland's "maintenance of effort" law, which sets minimum spending on education. During the economic recession, Montgomery and Prince George's have had trouble meeting the spending requirement.

Both counties, as well as Wicomico County on the Eastern Shore, asked for waivers from the state law so that they could reduce their education budgets. But in May, the State Board of Education denied all three requests, saying the counties had not shown that the recession had affected them any more than it had Maryland's 21 other county and city governments.

Montgomery and Prince George's governments scrambled to find alternative ways of reducing education spending. County governments and school systems argued their positions aggressively, with county officials saying that spending cuts would come at the cost of public services such as police, and educators arguing to protect student programs.

Montgomery and Prince George's county councils ordered their school systems to reimburse them for debt service on public school construction, an expense usually covered by the counties. The attorney general described that move as an "artificial" way of meeting the minimum requirement for education spending while actually decreasing the amount spent on education.

In Montgomery, the reimbursement was $79.5 million. In Prince George's, it was $11.8 million.

Both school systems asked State Superintendent of Schools Nancy S. Grasmick to review the counties plans. Grasmick asked Gansler for a legal opinion.

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