Section 5-202 - State financial assistance for public education.
§ 5-202. State financial assistance for public education.
(a) Definitions.-
(1) In this section the following words have the meanings indicated.
(2) "Annual per pupil foundation amount" means:
(i) For fiscal years 2004 through 2008, the sum, rounded to the nearest dollar, of:
1. The fiscal year 2002 per pupil foundation amount of $4,124; and
2. The product of the difference between the target per pupil foundation amount and $4,124 and:
A. 0.40 in fiscal year 2004;
B. 0.52 in fiscal year 2005;
C. 0.71 in fiscal year 2006; and
D. 0.83 in fiscal year 2007; and
(ii) For fiscal year 2008 and each fiscal year thereafter, the target per pupil foundation amount.
(3) "Assessed valuation of real property" means the most recent estimate made by the State Department of Assessments and Taxation before the annual State budget is submitted to the General Assembly, of the assessed value of real property for State purposes as of July 1 of the first completed fiscal year before the school year for which the calculation of State aid is made under this section.
(4) "Assessed value of personal property" means the most recent estimate by the State Department of Assessments and Taxation before the annual State budget is submitted to the General Assembly of the assessed value for county purposes of personal property as of July 1 of the first completed fiscal year before the school year for which the calculation is made under this section.
(5) "Foundation program" means the product of the annual per pupil foundation amount and a county's full-time equivalent enrollment.
(6) "Full-time equivalent enrollment" means the sum of:
(i) The number of students enrolled in grades 1 through 12 or their equivalent in regular day school programs on September 30 of the previous school year;
(ii) Except as provided in item (iii) of this paragraph, the product of the number of students enrolled in kindergarten programs on September 30 of the prior school year and:
1. 0.60 in fiscal year 2004;
2. 0.70 in fiscal year 2005;
3. 0.80 in fiscal year 2006;
4. 0.90 in fiscal year 2007; and
5. 1.00 in fiscal year 2008 and each fiscal year thereafter;
(iii) In Garrett County, the number of students enrolled in kindergarten programs on September 30 of the prior school year; and
(iv) The number of full-time equivalent students, as determined by a regulation of the Department, enrolled in evening high school programs during the previous school year.
(7) "Local contribution rate" means the figure that is calculated as follows:
(i) Multiply the statewide full-time equivalent enrollment by $624, and multiply this product by:
1. 0.46 in fiscal year 2004;
2. 0.47 in fiscal year 2005;
3. 0.48 in fiscal year 2006;
4. 0.49 in fiscal year 2007; and
5. 0.50 in fiscal year 2008 and each fiscal year thereafter;
(ii) Multiply the statewide full-time equivalent enrollment by the amount that the annual per pupil foundation amount exceeds $624, and multiply this product by 0.50;
(iii) Add the two products calculated in items (i) and (ii) of this paragraph, and divide the resulting sum by the sum of the wealth of all of the counties in this State; and
(iv) Round the result obtained in item (iii) of this paragraph to seven decimal places and express as a percent with five decimal places.
(8) "Local share of the foundation program" means the product of the local contribution rate and a county's wealth.
(9) "Net taxable income" means the amount certified by the State Comptroller for the second completed calendar year before the school year for which the calculation of State aid under this section is made, based on tax returns filed on or before September 1 after this calendar year.
(10) "Personal property" means all property classified as personal property under § 8-101(c) of the Tax - Property Article.
(11) "Real property" means all property classified as real property under § 8-101(b) of the Tax - Property Article.
(12) "State share of the foundation program" means the greater of:
(i) The difference between the foundation program and the local share of the foundation program; and
(ii) The result obtained by multiplying the annual per pupil foundation amount by the county's full-time equivalent enrollment, and multiplying this product by:
1. 0.25 in fiscal year 2004;
2. 0.24 in fiscal year 2005;
3. 0.22 in fiscal year 2006;
4. 0.19 in fiscal year 2007; and
5. 0.15 in fiscal year 2008 and each fiscal year thereafter.
(13) "Target per pupil foundation amount" means:
(i) In fiscal years 2008, 2009, and 2010, $6,694;
(ii) Except as provided in item (iii) of this paragraph, in subsequent fiscal years:
1. The target per pupil foundation amount for the prior fiscal year increased by the same percentage as the lesser of:
A. The increase in the implicit price deflator for State and local government expenditures for the second prior fiscal year;
B. The Consumer Price Index for all urban consumers for the Washington-Baltimore metropolitan area, or any successor index, for the second prior fiscal year; or
C. 5%; or
2. If there is no increase in the implicit price deflator for State and local government expenditures for the second prior fiscal year or in the Consumer Price Index for all urban consumers for the Washington-Baltimore metropolitan area, or any successor index, for the second prior fiscal year, the target per pupil foundation amount for the prior fiscal year; and
(iii) In each of fiscal years 2012 through 2015:
1. The target per pupil foundation amount for the prior fiscal year increased by the same percentage as the lesser of:
A. The increase in the implicit price deflator for State and local government expenditures for the second prior fiscal year;
B. The Consumer Price Index for all urban consumers for the Washington-Baltimore metropolitan area, or any successor index, for the second prior fiscal year; or
C. 1%; or
2. If there is no increase in the implicit price deflator for State and local government expenditures for the second prior fiscal year or in the Consumer Price Index for all urban consumers for the Washington-Baltimore metropolitan area, or any successor index, for the second prior fiscal year, the target per pupil foundation amount for the prior fiscal year.
(14) "Wealth" means the sum of:
(i) Net taxable income;
(ii) 100 percent of the assessed value of the operating real property of public utilities;
(iii) 40 percent of the assessed valuation of all other real property; and
(iv) 50 percent of assessed value of personal property.
(b) Distribution of State share of foundation program funds.- Subject to the other provisions of this section, each year the State shall distribute the State share of the foundation program to each county board.
(c) Repealed by Acts 2005, ch. 444, § 8, approved May 26, 2005 and effective pursuant to Article III, § 31 of the Maryland Constitution.
(d) Distribution of State share of foundation program funds - Eligibility.-
(1) To be eligible to receive the State share of the foundation program:
(i) The county governing body shall levy an annual tax sufficient to provide an amount of revenue for elementary and secondary public education purposes equal to the local share of the foundation program; and
(ii) The county governing body shall appropriate local funds to the school operating budget in an amount no less than the product of the county's full-time equivalent enrollment for the current fiscal year and the local appropriation on a per pupil basis for the prior fiscal year.
(2) Except as provided in paragraph (3) of this subsection, for purposes of this subsection, the local appropriation on a per pupil basis for the prior fiscal year for a county is derived by dividing the county's highest local appropriation to its school operating budget for the prior fiscal year by the county's full-time equivalent enrollment for the prior fiscal year. For example, the calculation of the foundation aid for fiscal year 2003 shall be based on the highest local appropriation for the school operating budget for a county for fiscal year 2002. Program shifts between a county operating budget and a county school operating budget may not be used to artificially satisfy the requirements of this paragraph.
(3) For purposes of this subsection, for fiscal year 1997 and each subsequent fiscal year, the calculation of the county's highest local appropriation to its school operating budget for the prior fiscal year shall exclude:
(i) A nonrecurring cost that is supplemental to the regular school operating budget, if the exclusion qualifies under regulations adopted by the State Board; and
(ii) A cost of a program that has been shifted from the county school operating budget to the county operating budget.
(4) The county board must present satisfactory evidence to the county government that any appropriation under paragraph (3)(i) of this subsection is used only for the purpose designated by the county government in its request for approval.
(5) Any appropriation that is not excluded under paragraph (3)(i) of this subsection as a qualifying nonrecurring cost shall be included in calculating the county's highest local appropriation to its school operating budget.
(6) Qualifying nonrecurring costs, as defined in regulations adopted by the State Board, shall include but are not limited to:
(i) Computer laboratories;
(ii) Technology enhancement;
(iii) New instructional program start-up costs; and
(iv) Books other than classroom textbooks.
(7) (i) The provisions of this subsection do not apply to a county if the county is granted a temporary waiver or partial waiver from the provisions by the State Board of Education based on a determination that the county's fiscal condition significantly impedes the county's ability to fund the maintenance of effort requirement.
(ii) After a public hearing, the State Board of Education may grant a waiver under this paragraph in accordance with its regulations.
(iii) In order to qualify for the waiver under this paragraph for a fiscal year, a county shall make a request for a waiver to the State Board of Education by April 1 of the prior fiscal year.
(iv) The State Board of Education shall inform the county whether the waiver for a fiscal year is approved or denied in whole or in part by May 15 of the prior fiscal year.
(v) If the State Board of Education grants a county a temporary waiver or partial waiver from the provisions of this subsection for any fiscal year, the minimum appropriation of local funds required under this subsection for the county to be eligible to receive the State share of the foundation program for the next fiscal year shall be calculated based on the per pupil local appropriation for the prior fiscal year or the second prior fiscal year, whichever is greater.
(e) Funding under miscellaneous programs.-
(1) In this subsection, "State financial assistance for public education" means the total financial assistance provided by the State to a county board under the following programs:
(i) Funding for the foundation program under this section;
(ii) In fiscal year 2009, 50% of the funding received under the GCEI adjustment grant program under subsection (f) of this section and in fiscal year 2010, 60% of the funding received under the GCEI adjustment grant program under subsection (f) of this section;
(iii) Transportation aid under § 5-205 of this subtitle;
(iv) Funding for compensatory education under § 5-207 of this subtitle;
(v) Funding for students with limited English proficiency under § 5-208 of this subtitle;
(vi) Funding for special education students under § 5-209 of this subtitle;
(vii) Funding for the guaranteed tax base program under § 5-210 of this subtitle;
(viii) 50% of the State payments for retirement contributions for employees of a local school system in accordance with the provisions of Division II of the State Personnel and Pensions Article; and
(ix) Funding for supplemental grants under this subsection.
(2) (i) For fiscal years 2009 and 2010 only, the State shall provide a supplemental grant to a county board that does not receive at least a 1% increase in State financial assistance for public education over the amount received by the county board in the previous fiscal year.
(ii) The supplemental grant under this paragraph shall be the amount necessary to increase a county board's State financial assistance for public education by 1% over the amount received by the county board in the previous fiscal year.
(3) For fiscal year 2011, and each fiscal year thereafter, a county board shall receive a supplemental grant equal to the amount the county board received under paragraph (2) of this subsection in the prior fiscal year.
(f) Adjustments for regional differences.-
(1) In this subsection, "GCEI adjustment" means the foundation program for each county multiplied by:
(i) 0.000 in Allegany;
(ii) 0.018 in Anne Arundel;
(iii) 0.042 in Baltimore City;
(iv) 0.008 in Baltimore;
(v) 0.021 in Calvert;
(vi) 0.000 in Caroline;
(vii) 0.014 in Carroll;
(viii) 0.000 in Cecil;
(ix) 0.020 in Charles;
(x) 0.000 in Dorchester;
(xi) 0.024 in Frederick;
(xii) 0.000 in Garrett;
(xiii) 0.000 in Harford;
(xiv) 0.015 in Howard;
(xv) 0.010 in Kent;
(xvi) 0.034 in Montgomery;
(xvii) 0.048 in Prince George's;
(xviii) 0.011 in Queen Anne's;
(xix) 0.002 in St. Mary's;
(xx) 0.000 in Somerset;
(xxi) 0.000 in Talbot;
(xxii) 0.000 in Washington;
(xxiii) 0.000 in Wicomico; and
(xxiv) 0.000 in Worcester.
(2) To the extent funds are provided in the State budget for the grants under this subsection, in addition to the State share of the foundation program, each county board may receive a grant to reflect regional differences in the cost of education that are due to factors outside of the control of the local jurisdiction.
(3) Subject to paragraph (4) of this subsection, the amount of the grant to each county board under this subsection shall equal the GCEI adjustment for the county board multiplied times:
(i) 0.50 in fiscal year 2006;
(ii) 0.62 in fiscal year 2007;
(iii) 0.74 in fiscal year 2008;
(iv) 0.86 in fiscal year 2009; and
(v) 1.00 in fiscal year 2010 and each fiscal year thereafter.
(4) For any fiscal year, if sufficient funds are not provided in the State budget to fully fund the grants provided under this subsection, the grant to each county board under this subsection shall equal the amount determined under paragraph (3) of this subsection multiplied by a fraction:
(i) The numerator of which is the amount provided in the State budget to fund the grants; and
(ii) The denominator of which is the sum of the amounts calculated under paragraph (3) of this subsection for all the county boards.
(g) Social Security contributions for county board or local school system employees.- Any employer Social Security contributions required by federal law for any employee of a county board or local school system shall remain the obligation of the employer.
(h) Supplemental retirement allowance in Montgomery County.-
(1) The Montgomery County Board shall provide from the Montgomery County Public Schools Employees' Pension System Trust the supplemental retirement allowance required under paragraph (2) of this subsection.
(2) (i) The Montgomery County Board, through the Montgomery County Public Schools Employees' Pension System Trust, shall pay a supplemental retirement allowance to an employee of the county board who retires on or after July 1, 1999, as a member of the Teachers' Pension System of the State of Maryland.
(ii) The supplemental retirement allowance shall equal the product of the member's years of creditable service earned in the Montgomery County Public Schools Employees' Pension System times the sum of:
1. 0.08% of the retiree's average final compensation that does not exceed the Social Security integration level; and
2. 0.15% of the retiree's average final compensation that exceeds the Social Security integration level.
[An. Code 1957, art. 77, §§ 128A, 128B; 1978, ch. 22, § 2; chs. 419, 420; 1979, ch. 407; ch. 423, § 1; 1980, ch. 531; 1981, ch. 2, § 3; ch. 114; ch. 774, § 1; 1982, ch. 17, § 7; chs. 693, 746, 806, 888; 1983, ch. 69; 1984, ch. 85, § 1; 1985, chs. 122, 223; 1986, chs. 123, 484, 580; 1987, ch. 11, § 1; ch. 277; 1988, ch. 6, § 1; 1989, ch. 5, § 1; 1990, ch. 217; 1992, 1st Sp. Sess., ch. 1, § 7; 1992, 2nd Sp. Sess., ch. 1; 1993, ch. 5, § 1; 1994, ch. 606; 1995, ch. 3, § 1; 1996, ch. 77; ch. 175, § 1; 1997, ch. 635, § 9; ch. 636, § 9; 1999, ch. 632; 2000, ch. 61, § 1; ch. 80, § 2; 2002, ch. 121; ch. 288, § 2; 2003, ch. 21, § 1; 2004, ch. 430, § 1; 2005, ch. 444, § 8; 2007 Sp. Sess., ch. 2, § 2; 2009, ch. 487, § 1; 2010, ch. 484, § 3.]