CUMBERLAND — Local governments face battles in Annapolis over school funding and other issues that hold the potential to financially devastate counties, Michael Sanderson, the executive director of the Maryland Association of Counties told Allegany County commissioners Tuesday.
“This session has the potential to be the most difficult and challenging ... we’ve ever seen,” Sanderson said. Many of the issues on the table could cause “hard feelings,” he said. Much of the trouble is that the state’s budget has enough of a gap that either Gov. Martin O’Malley’s plan to raise taxes will have to be approved or legislators will have to come up with some other kind of budget fix.
The single proposal with the greatest impact on counties would be a shift of teacher pension costs to county governments, Sanderson said.
“We think this is a bad idea,” Sanderson said. “This is enormous ... the numbers grow dramatically (after the first year of the shift),” Sanderson said.
Estimates project counties statewide would need to come up with $300 million in fiscal year 2014 with another $60 million on top of that each year going forward, Commissioner Bill Valentine has said.
School funding in general is a difficult situation for counties, which must meet maintenence of effort requirements. That law requires counties to keep per pupil funding the same as the previous year. Allegany County has been able to do that and, in fact, in fiscal year 2010 ranked seventh of all counties in the state in maintenence of effort funding. Tough economic times though, led several counties to fail to meet the requirement last year.
And while Sanderson thinks the general idea of maintenence of effort is a good one, he’d like to see more flexibility in the process, especially with the cash crunch most county governments are experiencing. Most counties are facing declining property tax assessments and therefore have less money coming in, Sanderson said.
Counties that don’t meet maintenence of effort requirements face a penalty from the state. The penalty though, is delayed a year, for instance, if a county did not meet maintenence of effort requirements in fiscal year 2012, the penalty would be assessed in 2013.
“It makes for a tough situation ... when part of the budget is off limits,” Sanderson said. Counties can request waivers, but those waivers are typically denied, Sanderson said.
“The waiver system certainly does not work,” Sanderson said. Sanderson believes there may be some changes to the maintenence of effort requirements made in the current General Assembly session.
MACo also hopes that some transportation funding will be restored.
“By most people’s reckoning, we have been undefunding for several years. The biggest victim has been local government,” Sanderson said. Local transportation funds have been raided over the years. O’Malley has proposed adding the state’s sales tax to gasoline. That would amount to about 18 cents a gallon, Sanderson said.
“This has the potential to be another contentious issue,” he said.
Sanderson spoke at the commissioner’s work session Tuesday. There is no public business meeting set for this week.
Contact Matthew Bieniek at mbieniek@times-news.com.
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