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Marc Elrich on MCPS Funding: “I am concerned about the school board’s decision to solve the budget deficit by increasing class sizes.”

In his weekly message to the community, Montgomery County Executive Marc Elrich addressed funding for MCPS schools. Below is his full statement:

“Our Montgomery County public schools are among the best in the country and are a major reason why people want to live here. Funding for the schools is about half of the county’s operating budget (and a large portion of the county’s capital budget). The recently approved budget for Montgomery County Public Schools (MCPS) raises questions and concerns.

I am concerned about the school board’s decision to solve the budget deficit by increasing class sizes. My staff and I are in discussions with MCPS staff and County Council members about possible solutions. At least part of the problem is related to the rising costs of health care for MCPS employees and retirees. When I finalized my recommended budget in March, this wasn’t expected to be an issue. However, by the time the County Council passed the budget in May, there was a $22 million gap in FY 2024 and a $22 million gap for FY 25, and there could be more.

What caused this? From conversations with school district leaders, I understand that inaccurate financial forecasts and healthcare inflation costs are a big part of that. Actuaries looking at MCPS’s finances did not anticipate the amount currently being spent and what will need to be spent. We are working with MCPS employees to improve their cost forecasts for the coming years. In the meantime, these are real costs that need to be paid – these are health care costs for current employees and retirees. Therefore, I will advocate that we shift some of our “pre-funding dollars,” currently allocated to a fund for future retiree health care costs, to current health care costs. I explain this further in my newsletter from a few weeks ago.

This is a solution that would help close the cost gap without jeopardizing health care financing for current employees or current or future retirees.

We knew that if federal resources ran out, we would face the same demands without the additional resources we need. That’s why I proposed a property tax increase last year solely to fund education. While I appreciated that the County Council supported a tax increase, he supported too low an amount and instead directed the school system to use the last of the one-time federal funds to meet ongoing needs. The Council and I knew then that we would have to deal with this problem this year, and we will continue to do so in the future.

I am aware of minimizing the tax burden for our residents. Still, there is room to expand how much we collect from households that have the resources to pay more and from businesses that pay a lower share of taxes than what they pay in neighboring jurisdictions. Efforts to pass fair tax distribution legislation failed in the state Legislature earlier this year and were not supported by the Council. However, we will resume these efforts for the next session.

Other measures I support would help increase revenues in every Maryland county. It is long past time that we have the authority to generate meaningful revenue for our much-needed transportation projects, as has been done successfully in Northern Virginia. They have the authority to establish a different tax rate for commercial properties than for residential properties, so that commercial tax rates can be increased to support transit investments. The commercial property owners want the higher investments because they know the money will be used to support transportation infrastructure (like the Silver Line in Northern Virginia is supported by taxes there), and that infrastructure makes their projects more desirable. A similar system here would free up taxpayer money for other projects, including schools. You can read more about this idea in my newsletter of March 1.

Look around and you’ll see that neighboring jurisdictions in Maryland, Washington, DC, and Virginia are in the process of raising taxes to offset higher business costs. We have avoided that in this budget cycle, but we need to make sure we continue to invest in our province.

Our school system has an excellent reputation and has struggled to maintain high quality education since the last recession when we had to adjust spending. We have not yet reinvested in the same way as before. If we want to maintain the quality of our schools, we must invest in our schools, students and teachers.

Larger class sizes, as explained in a 2017 MCPS video, are a way to spend less money but place a burden on teachers. The pandemic has created a number of new problems and highlighted older ones. We need to support our teaching staff.

The school district is a textbook example of what happens due to inflation. Costs are rising beyond expectations, and we need to respond in real time. If this is the new normal when it comes to healthcare costs, we will have to adjust our way of thinking about school financing. The consequences of not addressing these costs will inevitably impact education in the province. Additionally, investing in our school district helps strengthen our home values ​​and quality of life for all. We cannot take an approach to offset rising health care costs by cutting back on investments in our classrooms.”