St. Mary's County Board of Education previews $294 million FY2026 budget amid state funding uncertainty

The St. Mary's County Board of Education received a preview of Superintendent Dr. Smith's proposed fiscal year 2026 budget during its Jan. 22 meeting and held a public hearing before closing public comment. The recommended budget totals about $294 million and includes pay-step increases, a 2% cost-of-living adjustment for teachers and smaller COLAs for support staff and administrators; presenters warned that changes in the governor's proposal and pending state legislation could reduce state aid and shift retirement costs to local governments.

Board members were given a line-by-line summary of the superintendent's recommended budget and recent state aid estimates from the Maryland State Department of Education. The presentation by Ms. McCormick and Dr. Smith outlined recurring and nonrecurring revenue differences from the current year, reductions requested to align staffing with declining enrollment, and the potential local cost if state funding is reduced. Dr. Smith and Ms. McCormick repeatedly urged vigilance as the legislature and state agencies finalize numbers in Annapolis in the coming months.

School officials said the superintendent's recommended budget, as originally presented, called for roughly a $5.3 million (4%) increase in local funding and increases in state and federal aid, producing an initial recommended total near $293.2 million; updated state figures and other adjustments raised the recommended total to about $294 million, a roughly 1.7–1.76% net recurring increase. Ms. McCormick told the board the recommended budget includes funding to meet negotiated agreements — including a 2% COLA for teachers and a 1% COLA for support staff and administrators — plus funding for health insurance, pension contributions, transportation contract and bus-driver retention stipends. The budget also proposes 10 position reductions to align with declining enrollment.

Ms. McCormick said the district overlaid MSDE's state-aid release with the comptroller's net taxable income figures and recent teacher certification changes to refine the estimated state contribution to FY2026. "The numbers that were released by MSDE ... reflected $147,400,000 in state aid projected for fiscal 2026 for Saint Mary's County Public Schools as compared to the current budget of $143,300,000," she said, noting that the updated figures are approximately $173,000 lower than earlier projections.

Board members heard that the governor's proposed budget and related draft legislation would reduce several foundation and formula-driven amounts, and could delay implementation or lower per-pupil foundation amounts used across multiple state funding formulas. Ms. McCormick said the governor's proposal includes a contingent reduction that would delay implementation of the collaborative planning time per-pupil amount and that statewide adjustments would change compensatory education and limited-English-proficiency funding because those are tied to the foundation amount.

Dr. Smith framed the potential local impact in stark terms. "But just for St. Mary's County, from now until 2033, we're talking about a $100,000,000 worth of cut funding that we were supposed to ... that we anticipated receiving from the state based on the law that is currently passed," he said, adding that the district is monitoring the legislative process and cannot rely on the preliminary MSDE numbers as final. He said local officials expect to press the county commissioners for a 4% local funding increase (about $5.4 million) to align with county precedents and that, if state reductions occur as proposed, the system could face an additional $3.8 million local shortfall.

Presenters also described two additional portfolio impacts: a proposed reduction in the state's special-education share for some nonpublic placements (changing the state share from 70% to 60% over a threshold, a statewide $25 million reduction) and a pension-buffer proposal that would pass roughly half of a statewide retirement-cost increase to local governments (a statewide $92 million shift; locally estimated at about $1.5 million). Ms. McCormick summarized the district's local calculations, saying the combined effect of the proposed state legislation and other shifts would be an estimated $2.2 million reduction in state-aid for FY2026 and an added $1.5 million pension cost to the county.

Board members were shown a Department of Legislative Services ranking that placed St. Mary's County near the lower end of state per-pupil funding (20th of 24 systems in the most recent DLS ranking), which Dr. Smith used to illustrate long-term funding disparities tied to the Kirwan Commission and the Blueprint for Maryland's Future. Dr. Smith said the district's per-pupil shortfall compared with the highest-funded jurisdiction would amount to tens of millions annually when multiplied by the district's enrollment.

During the public hearing portion of the meeting one resident spoke in favor of the superintendent's proposed budget, praising the system's staff and student achievements and urging the board and community to support the proposal. "This budget ensures our continued attracting and retaining of employees that support our students every day," the commenter said.

The board did not take final action on the superintendent's recommended budget at the Jan. 22 meeting; members were reminded the board is scheduled to consider approval of the recommended budget at the board's Feb. 5 meeting. The county commissioners' recommended budget hearing is scheduled for April 22, and the commissioners are expected to provide final direction on their operating budget on May 20; the board expects to adopt the school budget on May 20.

Votes at a glance: two routine motions were approved without recorded roll-call tallies. At the start of the meeting the board approved the meeting agenda as presented. Later the board approved the consent agenda, which included personnel items, two sets of minutes and a request for an FY25 threshold increase to an indefinite-quantity contract for building commissioning services (RFP SMCPS 2023-3 DSSDC). Both motions were made and seconded on the record and passed by voice vote.

The board closed the public hearing on the FY2026 proposed budget and invited written comments to boe@smcps.org. The board also noted there were no additional action or informational items on the Jan. 22 agenda and adjourned.