What is Maintenance of Effort (MOE)?

Maintenance of Effort (MOE) law states that each county must appropriate an amount equal to or greater than its prior year per pupil appropriation. This calculation does not address the cost of negotiated agreements, benefits, Pre-Kindergarten students, non-public placement students, inflation, and funding for quality improvement initiatives. The law ensures that additional state aid will not supplant local revenues.

In Maryland, public education is funded through the State School Fund based on major aid programs. For each major aid program there is a required state share and required local share, which establishes the minimum amount of school funding that must be provided. The amount of state and county funding for each major aid program is funded based on a statewide standard per pupil funding formula multiplied by applicable student enrollment counts. 

The result establishes the required minimum level of funding by the state and the county. The required level of funding per pupil must be maintained year-over-year. In other words, the amount of funding per student cannot decline year-over-year in Maryland. The minimum level of funding for each of the major aid programs is split between the state and the local government based on relative wealth and other factors. The Maryland State Department of Education (MSDE) calculates the required state share and required local share. The required state share becomes the revenues received from the state. The required local share is what the county must fund. However, a county can fund more than its required local share. 

When a county funds an amount greater than the local share, this increased amount of funding becomes the base that must be maintained each year. This is referred to as the required MOE that the county must fund. In addition to the required MOE, the school system can request the county to fund an amount above MOE. 

The required MOE and the above MOE amounts make up the recurring funding that the county provides. One year’s recurring funding becomes the basis for calculating the next year’s MOE. In addition, the school system can request non-recurring funding for qualifying one-time expenses. Non-recurring funding does not affect the subsequent year’s MOE.

Consistent with the high value placed on public education in Howard County, the county funding provided each year exceeds the required local share. To illustrate, in the FY 2024 Approved Budget, the required local share of funding was $415.4 million. The approved recurring county funding was $720.3 million—173 percent greater than the required funding. Therefore, in Howard County, the county level of funding is determined based on the Required MOE calculation.

To dive deeper into funding and funding formulas, read the Summary of FY 2025 Operating Budget Revenues under the Factors Influencing and Summary of the Budget section in the Superintendent’s FY 2025 Proposed Operating Budget book.