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Board hears budget update: federal ESSER III rescission, mixed state restoration and potential local shortfall
Summary
Finance staff warned the board on April 9 that federal and state changes are creating uncertainty for the FY26–FY27 funding picture: the U.S. Department of Education rescinded approved late‑liquidation of ESSER III funds statewide (effective March 28), St. Mary’s reports full expenditure of its ESSER III allocation, and the state conference committee restored some foundation funding for FY26 but only for one year.
District finance staff briefed the board on April 9 about federal, state and local budget developments that affect the FY26 budget outlook and longer‑term planning.
On federal pandemic funds, staff said the U.S. Department of Education rescinded approved late‑liquidation authority for ESSER III (ARP) funds effective March 28, 2025, meaning expenses incurred after that rescission date may not be reimbursed. St. Mary’s County Public Schools told the board it had fully expended and submitted reimbursement requests for its ESSER III allocation by the statutory deadline and did not request a late liquidation; district officials said they believe MSDE has already received full reimbursement on behalf of the county but are supporting MSDE as it gathers documentation for LEAs statewide.
On state…
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