The proposed budget, scheduled to be released today to the county school board, is $25 million, or 1 percent, more than the current budget, but does not offer any new programs or initiatives for next school year.

If the budget is fully funded by the County Council, it allows the school system to operate with the same programs and "go as is," Weast said. "If we go below that, there begins to be problems."

If the budget is not fully funded, parents and students could be forced to deal with major cuts throughout the county's 200 schools, including reductions in its teacher ranks and reduced stipends for elementary school activity buses and extracurricular activities, according to a summary of potential budget reductions provided by the school system.

Weast's proposal relies heavily on the county's decision to fund its maintenance-of-effort requirement, which has caused a rift between some county politicians and the school system.

Last April, the county sought a waiver from the state school board on its maintenance-of-effort requirement, which, under state law, requires local governments to fund its school systems at the same level as the previous year.

County government leaders told the state school board that the recession made it difficult for them to fully fund the school system.

The state board denied the county's waiver request in May.

Soon after, the county government approved a plan to loan the school system $79.5 million toward the budget through a debt service option.

In June, Weast wrote a letter to state Superintendent Nancy S. Grasmick questioning whether the county's funding plan was legal.

In an opinion issued Nov. 4, Attorney General Douglas F. Gansler, Assistant Attorney General Elizabeth M. Kameen and Chief Counsel Robert N. McDonald said that the funding plan proposed by Montgomery was "not a permissible means" of satisfying their maintenance-of-effort requirement.

It is still possible that the county could be fined as much as $46 million, which would mean that the school system would lose funding from the county and a portion of its state aid.

Weast's budget proposal assumes that the County Council will give $79.5 million to the school system for maintenance of effort. If the council does not give that money, then the superintendent has identified $43 million in potential cuts, including a reduction of 240 classroom teacher and 30 central office administrator positions. The school system also would purchase fewer textbooks and instructional materials.

The budget proposal includes $23 million for step increases for the school system's 22,000 employees, but does not include money for cost-of-living raises.

The school system's unions currently are negotiating a new contract. Last year, employees gave up their COLAs, which saved the school system $89 million.

Weast and the county school board are scheduled to hold public hearings on the budget Jan. 13 and 20. Work sessions are planned for Jan. 27 and 28.

The school board will vote on the budget proposal during its Feb. 9 meeting, then send it to County Executive Isiah Leggett (D) for review. The County Council has the final say.

"We can't pay the fine and cut the budget again midyear," Weast said of the potential maintenance-of-effort penalty.

A ‘crazy' law

Montgomery County Council members criticized the state's maintenance-of-effort law Monday and said some decision-making power should be transferred from the state school board to ensure a fairer process.

Under the law, the state board may exclude a county from maintenance-of-effort requirements in times of significant financial duress.

Until 1996, the General Assembly made decisions about when maintenance of effort could be suspended. This week, county officials suggested that lawmakers in Annapolis will need to get involved again next year to avoid penalties for Montgomery and other counties.

"Is the state board the right place to be advocating to in the first place?" asked Councilman Michael J. Knapp (D-Dist. 2) of Germantown during an Education Committee meeting Monday.

Council members and staff said they would work with the county delegation on securing a waiver. Staff discussed a draft of a bill expected to be introduced during the 2010 session.

"The state board is the education entity and, honestly, the General Assembly would also just as soon not have this responsibility," said Melanie Wenger, a lobbyist for Montgomery County. "The General Assembly might be reluctant to remove the state board from [being responsible]."

The state's maintenance-of-effort requirement and the unwillingness of the state board to grant a waiver will lead more counties to do just the bare minimum in funding education, said Councilman Philip M. Andrews (D-Dist. 3) of Gaithersburg.

Council Vice President Valerie Ervin (D-Dist. 5) of Silver Spring took a potshot at the law.

"Here we are going over and above what we have to do, and we're going to get hit not once but twice" with penalties, said Ervin, chairwoman of the Education Committee. "What a crazy law."