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Board adopts FY2026 operating, capital budgets as staff warn of special-education funding gap
Summary
The Board approved the county councils FY2026 operating and capital budgets; staff warned of large gaps between special-education expenditures and state revenues and outlined a state-driven minimum-school-funding compliance schedule that will require school-level budget adjustments.
The Anne Arundel County Board of Education voted unanimously Wednesday to adopt the FY2026 operating and capital budgets as approved by the county council, while Chief Financial Officer Matt Stanski told trustees the district faces a structural mismatch between special-education costs and state revenue that will force school-level reallocation in the near term.
Stanski briefed the board on the districts work to tag and allocate roughly $1.3 billion in Blueprint-related revenue and about $284 million in non‑Blueprint general‑fund items. He described a multi-step process the finance team has completed to align budget accounts with the states reporting templates and methodologies and to move centrally budgeted, school-based expenses (utilities, maintenance, technology and CTE center costs) into school-level budgets where MSDE and the AIB require school-level allocation.
The CFO provided the following fiscal details during the meeting: - The district reported fiscal-year trends showing growing expenditures for transportation, nonpublic tuition and special education while state revenue increases for those categories have been comparatively small. - For FY24, Stanski said special-education revenue was about $33.44 million versus almost $170 million in special-education expenses (excluding related employee benefits); including benefits, he said the expense approaches $200 million. - Under the states minimum‑school‑funding (student-weighted) rules, Stanski said the district must supply school-level budgets and expenditure reports to the state: an early July expenditure report, school-level FY26 budget data in August, final audited FY25 data by Oct. 15, and a midyear report on Jan. 1.
Stanski outlined the AIB compliance timeline the district expects to follow: reduce gaps in compliance by 50% in FY26 for affected schools, and reach full compliance for all schools by FY27 unless the district pursues and qualifies for a statutory waiver. He advised that waiver requests require a plan, timeline, public engagement and supporting data.
Board members pressed staff on consequences and remedies. Board member Dana Shelheim said rising class sizes in her district are a visible consequence of reallocations intended to meet the student‑weighted formula: "This is the pillar that has resulted in the ballooning of class sizes in my district," she said, and asked staff to explain what can be done. Stanski and Superintendent Dr. Bedell told trustees they will provide school-level data and monthly updates and reiterated that the state formula is redistributing existing funds and that the "pie is not big enough," Stanski said.
Why it matters: The boards adoption of the FY26 budgets makes the county councils funding decisions official for AACPS. At the same time, the district faces a major implementation challenge: state formulas and reporting rules require school-by-school redistribution of staff and budgets and will highlight gaps between state funding levels and actual local special-education costs.
Board action: The board adopted the FY2026 operating budget and capital budget as submitted by the county council. Votes were unanimous (8–0). Staff said they will return with school‑by‑school minimum-funding analyses, proposed allocations and monthly progress reports.
