Cumberland Times-News

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March 27, 2013

Disparity grants leaves pension holes

CUMBERLAND — Last year’s shift of teacher pension costs from the state to counties is leaving a budget hole for local governments to fill, despite state disparity grants to Allegany and Garrett counties. The disparity grants don’t cover the full costs of teacher pensions.

In Allegany County, the disparity grant was just over $9 million, according to Delegate Wendell Beitzel. In Garrett County, the grant was more than $2.5 million, said County Administrator Monty Pagenhardt.

Both grants were what county officials expected.

“The grant for fiscal year 2014 is currently estimated to be exactly the same as last year at $8,930,611 — this total is inclusive of the supplemental amount for teachers pensions of $1,632,106, the same as last year. Technically, this money is Allegany County’s, but the supplemental amount goes towards the cost of the teacher’s pension shift,” said Jason Bennett, Allegany County finance director.

The Garrett County grant includes $406,000 for teacher pension supplemental grants, the same amount as 2013, said Pagenhardt.

Because of the way Maryland education funding is set up, all the money must come first through the county. And the counties must now make up the difference after legislation passed last year.

“The supplemental disparity grant does not cover the full cost of teachers pensions this year. The amount identified for teacher pensions ... is $1,885,754... leaving the county to come up with more than $250,000,” Bennett said.

“Disparity grants go to county government. From an educational standpoint, we know that county government is receiving $1,632,106 in a supplemental disparity grant for teacher pensions. My understanding is the ‘regular’ disparity grant that county government receives can be used for anything they please,” said Randall Bittinger, chief business officer for the Allegany County Board of Education.

Last year, in Allegany County, the board of education and county officials had a war of numbers about the actual financial impact of the disparity grants and the teacher pension shift. It became part of the continuing battle over funding and control between commissioners and school officials that has continued since the current Allegany County commissioners took office in 2010.

Garrett County commissioners have already told their county board of education that their overall funding for fiscal 2014 will be the same as in 2013, Pagenhardt said.

For fiscal 2013, the teacher pension obligation of $664,714 and supplemental grant of $406,400 made for a difference of $258,314. The county had funded or appropriated an additional $258,314 to the board of education, Pagenhardt said.

“The county did not have to fund this amount but did. For fiscal year 2014 this same formula from the state shows $842,544 in teacher pension obligation with supplemental grant again at $406,400. The additional cost difference from 2013 to 2014 is $178,830. It is yet to be determined how much of the difference the county will fund,” Pagenhardt said.

Unlike some states that provide school systems with the ability to fund their schools through taxation via school levies or other procedures and through direct budgeting by the board of education, Maryland gives counties control over the school board’s finances. On the other hand, counties are locked into a maintenence of effort formula that requires them to fund the educational system at a certain level each year.

Contact Matthew Bieniek at mbieniek@times-news.com.

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