This week, County Executive Ball pre-filed a resolution amending the Howard County Board of Education (BOE) Operating Budget for FY2020. The resolution allows the BOE to appropriate $7.2 million from its FY2019 unassigned General Fund Balance to its FY2020 Operating Budget Fixed Charges category to reduce the Howard County Public School System’s (HCPSS) $39.2 million Health and Dental Fund deficit.

“This is the first step in our collaborative, pragmatic plan to eliminate the Health Fund deficit,” said County Executive Calvin Ball. “I’m grateful to the County Council, Board of Education and Dr. Martirano for working with my administration, so that we can make significant and consistent progress each year until the deficit is fully resolved.”

Earlier this month, the BOE approved a collaborative plan with the County Government to reduce the HCPSS Health and Dental Fund deficit. The Health Fund deficit was accrued over several years, and this resolution is the first significant step to begin eliminating the debt. Sound fiscal management principles dictate that some level of unassigned fund balance be preserved to account for the risk of unforeseen expenditures or declines in revenue.

The modified plan outlines eliminating the debt over four years, through HCPSS year-end savings and one-time funds from the County. Each year the deficit would be reduced by $6 to $11 million until fiscal year 2024. The plan also introduced a mechanism for accountability from all parties. The County will contribute $13 million in total one-time funding, contingent upon HCPSS meeting established year-end savings targets and the State Department of Education excluding one-time funding from Maintenance-of-Efforts base calculation for future years.

The modified plan is sustainable within existing resources, avoids the unnecessary financial risk of operating without an unassigned fund balance, and adequately balances available resources and risks.

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This is one of those stories you want to be super positive about when writing it early in the morning. But I kind of feel like we have watched this play out…back in 2018…when CE Kittleman gave a “one time” $10 million amount of money that was supposed to start us down this road.

Maybe this time everyone is really on the same page to address this problem and fix the deficit that exists within the school system with the health fund.

According to the modified plan the school system is going to get a whole bunch of “one time funding” from the county…in the amount of $13 million over 4 years (2021 – 2024). Not sure I would personally categorize all of that money as “one time funding”…but ok.

Getting it all right this time is critical…the school system has made that clear and the county has made that clear. Because of that, we should hold those in charge responsible if this plan does not work going forward.

I seriously do not want to hear that the counties AAA bond rating is in trouble again because of this issue….the school and the county have a plan to deal with this and fix it…that is what we have all been told…so everyone involved get it done and put this issue behind us.

I would also tell people now as they watch the HCPSS budget cycles over the next few years…you have to add this money into the final amount:

  • FY2021 one-time funding (Howard County) $6 million*
  • FY2022 one-time funding (Howard County) $3 million*
  • FY2023 one-time funding (Howard County) $2 million*
  • FY2024 one-time funding (Howard County) $2 million*

When the school system starts saying (because I think it may be coming in the future) we are getting less increases than we have received in previous years…we should all note that this money has to be added to the total amount the school system is getting from the county. While it is designated as “one-time funding”…it is actually an annual amount for the next four years of ADDITIONAL funding from the county to the school system to address this issue.

Also watch this item noted above “contingent upon HCPSS meeting established year-end savings targets”…so what happens when / if HCPSS does not meet those savings requirements. Could this whole plan blow up in everyones face. The Howard County Board of Education members need to be on top of this issue from jump…and this will be a great question for the candidates running this election cycle.

Stay positive and see this as a win….because it can be for the school system and the county if it works and does what the plan intends and gets rid of the Health and Dental Fund deficit.

Scott E

1 COMMENT

  1. Scott,

    I would be curious have you or anyone else ever looked into the County Operating Budget for various departments and seen if there have been major increases in spending, or increases that vary from historical funding for different departments. For instance is the Office of Law or Department of Planning and Zoning (Just Examples) running at similar costs as it has historically, or has there been major increases in funding with the new administration. Have they added people or reduced staff?

    It would be interesting to see a YOY chart of the amount of funding for the major departments within the County for comparison.

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