Howard County Public School System staff told the Board of Education on Jan. 23 that preliminary state aid projections raised the system’s baseline state funding but that proposed legislative changes and updated guidance could reduce that gain or shift new costs to counties.

Chief Financial Officer Brian Hall and the budget team said staff’s December estimates initially projected about $24.8 million in increased state aid for FY26 (a projection that moved the system from $351.8 million to roughly $376.6 million in state aid). But the figures presented to the board after Maryland State Department of Education (MSDE) projections were delivered produced a net change that staff described as roughly $720,000 lower than their preliminary internal estimate. Hall emphasized the estimates are preliminary and depend on the legislative process.

Why the numbers shifted: MSDE guidance and enrollment counts
Hall told the board that updated MSDE guidance showed the “collaborative time per pupil” was already included in the foundation funding amount rather than listed as a separate line item, which required staff to remove that separate entry to avoid double counting. The board was told that if the collaborative time per pupil is later removed from the foundation by the legislature, the district could lose roughly $163 per pupil — a reduction the CFO estimated could mean a $4 million cut to the foundation and about $6 million in total revenue impact once related, index-linked aid programs are considered.

Potential expenditure shifts and other legislative proposals
Staff also advised the board that other proposed changes in the governor’s budget and draft legislation could increase local expenditures. Two examples the CFO highlighted:
- Pension cost shifts: Proposals under discussion could shift a larger portion of pension costs from the state to counties and school districts. The district estimated a potential increased local expenditure in the range of $6.8 million if those shifts proceed.
- Special education nonpublic tuition: Under current practice the state covers about 70% of nonpublic special education tuition; proposals in the legislature would reduce that share (to 60% and then 50% in subsequent years), increasing the county’s share and therefore local expenditures.

Board members pressed staff on calculations, sources and sensitivity of the numbers. Executive Director of Budget Darren Conforti and Hall acknowledged the state’s estimates are complex, driven by enrollment counts, relative wealth measures and legislative changes, and said final figures typically arrive in May. Board members asked for follow-up breakdowns (for example, rates of increase for health insurance, retirement and Social Security) and for historical comparisons between mid-January MSDE estimates and final May amounts.

What this means for the FY26 proposal
Hall said that if all currently proposed legislative reductions and cost shifts occurred, the district’s currently projected FY26 net revenue increase of roughly $24.1 million could shrink to about $18 million or less. Hall and Conforti told the board they will continue to analyze bills as they emerge and provide updated revenue estimates to the board as MSDE and the legislature finalize changes.

The board asked for additional detail on the state estimates, percentage changes in fixed charges (health insurance, retirement) and a clearer explanation of how MSDE’s enrollment and foundation adjustments produced the net differences between the superintendent’s initial proposal and state-provided figures. Staff agreed to provide those clarifications in follow-up materials.