Board of Education Adopts FY 2021 Operating and Capital Budgets

June 18th, 2020

The Howard County Board of Education unanimously adopted its Operating and Capital Budgets for the 2020-2021 school year (FY 2021) on Thursday, June 18, 2020. The operating budget totals $918.7 million, an increase of $17.3 million over FY 2020. The FY 2021 capital budget totals $102.4 million, an increase of $45.8 million over the prior year budget.

The $918.7 million operating budget includes $620.3 million in county funding – approximately $2.7 million above Maintenance of Effort, the minimum level of funding required by state law – $282.7 million from the state, and $7.7 million from federal and other sources. The budget also incorporates the use of $5 million of the Howard County Public School System (HCPSS) General Fund balance in order to fulfill obligations without requiring deeper impact to the classroom. In addition to grappling with millions in budget reductions, the Board had to plan for the uncertainties and budget impacts of the COVID-19 pandemic. The FY 2021 budget sets aside a $3 million Contingency Reserve, to allow HCPSS to quickly meet projected expenses related to recovery of learning and tentative school reopening in the fall.

“This budget is the outcome of the truly collaborative process with our County Executive and County Council, Board members, Superintendent, employee bargaining units and community members who worked together to hone a budget that is fiscal responsible while addressing our most critical priorities,” said Board Chair Mavis Ellis. “I am pleased that despite the difficult financial situation we were able to support our staff and avoid any layoffs or furloughs.”

“I greatly appreciate the support of our Board, County Council members and County Executive for their continued commitment to our students and staff amidst a very challenging financial climate,” said HCPSS Superintendent Dr. Michael J. Martirano. “I am pleased that despite the need to make difficult decisions, we are able to avoid any reduction in force, maintain our commitment to special education supports and accelerate our diversity, equity and inclusion work, while providing compensation increases for our excellent staff. I also want to thank our dedicated staff members and all bargaining units for working with us to collaboratively address the budget deficit”

The FY 2021 budget fulfills several of HCPSS’ highest priorities:

• Addresses a critical shortage in special education by adding 106.8 new positions.
• Increases employee compensation on average by 2% for employees represented by bargaining units, with a 1% increase for non-represented (AMT) staff
• Accelerates HCPSS’ Diversity, Equity and Inclusion work through the addition of three new positions
• Fully funds actuary projected employee health insurance costs, for the third consecutive year

Achieving these objectives required the Board to make difficult compromises to balance the FY 2021 operating budget within a tightened budget climate, which has been exacerbated by the unexpected costs to the County and school system associated with the pandemic response. Balancing the budget required the Board to make an additional $37.1 million in reductions – in addition to the $16 million the Board had already reduced from the Superintendent’s Proposed Budget – by increasing class sizes; reducing salary increases; making reductions to supplies, maintenance and other expenses. (A detailed list of reductions is provided below.) Notably, the adopted budget avoids any employee layoffs or furloughs.

The impact of the FY 2021 reductions is compounded by significant prior reductions taken during the last three fiscal years, which include eliminating many central office positions and services, scaling back academic programs, freezing instructional support positions and repurposing funds to support classroom needs.

The addition of new positions to serve students receiving special education services supports one of the school system’s top priorities. With the adoption of the FY 2021 Budget, HCPSS will have increased the Special Education budget by $23 million since FY 2019, working toward closing a longstanding gap in funding for special education, adding 239.5 new positions to support ages birth through 21.

The Board adopted a FY 2021 Capital Budget totaling $102.4 million, for costs associated with construction of a replacement Talbott Springs Elementary School, scheduled to open in fall 2022; construction of a new 13th county high school, targeted to open in fall 2023; and a renovation and addition to Hammond High School, scheduled for completion in fall 2023. Additional funding is allocated for systemic renovations, which include replacements and upgrade of rooftops and heating, ventilation and air conditioning (HVAC) systems at several schools.

Details of the budget decisions are available on the Board of Education BoardDocs website.

The Board’s operating budget decisions yielded approximately $37.1 in total savings:

• $12.8 million: Tentatively reduced salary increases by approximately one-half, resulting in an average compensation increase of 2% for most staff, and 1% for staff not represented by bargaining units (AMT)
• $6 million: Deferred County contribution for pay-down of health fund deficit $6M, as a result of unplanned costs incurred by the County associated with the COVID-19 pandemic
• $4.1 million: Updated actuarial cost estimates for health insurance FY 2021
• $2.8 million: Modified class sizes through adjusting middle and high school ratios by 0.6 teacher positions at each school, removing all high school media paraeducator positions, and reducing 14 pooled positions. No reductions will require layoffs or furloughs
• $1.4 million: Reduced estimate for transportation costs related to redistricting, as well as bus route efficiencies and lowered anticipated bus contract costs.
• $1.2 million: Increased savings target from a hiring freeze, as well as added benefit turnover savings
• $841 thousand: Reduced for custodial overtime and supplies costs
• $798 thousand: Discontinued parochial school busing services
• $1.3 million: Reduced training, supplies, contracted services, maintenance replacements, and other costs across all divisions