By Adam Pagnucco.
In Part Two, we found out that MCPS’s actual spending on instructional salaries regularly falls short of its appropriations. What happens to this money?
It turns out that some of it is diverted to other categories of school system spending. And that diversion is approved by the county council almost every year.
Under state law, public school systems must receive permission from their county councils or county commissioners before moving money between state categories of spending. In Montgomery County, this takes the form of transfer requests sent by MCPS to the county council during the fiscal year, after the council and school board approve MCPS’s budget. I could be wrong, but I am unaware of an instance in which the council said no to a transfer request.
A search through council resolutions finds 24 MCPS transfer resolutions approved by the council from FY05 through FY22. Those transfers totaled $151.7 million. Money was transferred out of instructional salaries 24 times for a total of $109.5 million. Money was transferred into instructional salaries 4 times for a total of $2,480,000. That’s a net transfer out equaling $107 million over the period.
Which state categories of spending had net gains from transfers? That varies by year. Over the entire period, the biggest net gainers were fixed charges (+$52.3 million), textbooks and instructional supplies (+$40.3 million) and special education (+$10.7 million). Fixed charges include employee benefits.
Net transfers vary a lot. The chart below shows net transfers out of instructional salaries by year. Negative values represent net transfers into instructional salaries.
The spike in FY21 arose from Resolution 19-1017, which the council passed on October 12, 2021. That resolution transferred $62.3 million out of instructional salaries. The largest net beneficiaries were textbooks and instructional supplies (+$35.4 million) and fixed charges (+$25.8 million). This was part of MCPS’s response to the pandemic. The school system used instructional salary money to pay for COVID-related costs as well as employee benefits. Let’s acknowledge that the pandemic was an extremely unusual event. That said, MCPS has diverted instructional salary money in 15 of the last 18 fiscal years.
The FY21 MCPS transfer resolution, approved by the county council, transferring $62.3 million in instructional salaries.
One more transfer deserves attention: a request by MCPS to transfer $1.97 million out of instructional salaries towards other purposes in September 2022. At that time, Superintendent Monifa McKnight told the school board that there was a “projected surplus” in instructional salaries of $15.9 million. She attributed most of this surplus to “savings in position salaries due to salary lapse from positions not filled during the year.” In other words, MCPS was saving money by not hiring teachers and six months later, they want more money to hire teachers. The council approved the transfer on September 30, 2022.
Overall, MCPS shows a sustained pattern of diverting money budgeted for instructional salaries towards other spending. The county council has approved these diversions over and over again. Now taxpayers are asked to pay more for the express purpose of hiring teachers and improving their pay. MCPS may well need more resources due to its ever-mounting needs, but it must answer questions about how it uses teacher salary money first.
That’s not all. There is another destination for diverted teacher salary funds that warrants exploration. More to come in Part Four.