Tuesday, May 1, 2012 – Budget Hearings – afternoon & evening hearings

Tuesday, May 8, 2012 – Budget Deliberations – may be held in the morning and late afternoon – times to be determined.

Tuesday, May 22, 2012 -Enact Budget Ordinance

 I am writing to express my concerns about HB 1412.  I think you have probably already heard most of the reasons about why this is a problematic bill.  I think the Washington Post editorial yesterday best summarized the problems.  Everything they said about the effects in Montgomery Countyis also true for the other Maryland counties.  If passed, this bill will fundamentally alter the relationships between County governments and local school boards.  There is a healthy tension between the two now; the effects of this bill could make it toxically adversarial.  In the end, it cannot be healthy for the schools.

 The provision in the bill that would adjust local spending, over time, to the state average is mathematically perverse and unsustainable.  It will inexorably drive up the money spent in the schools — mostly salaries.  It ignores the different pay levels and costs in the urban versus rural communities.  While teachers in places like Montgomery Countymay be paid appropriately, given average pay levels in the County, paying teachers at this level in the rural counties would put them way out of line with what other professionals earn.  Will this create resentment and a possible backlash?  That may be another unintended consequence of forcing the rural counties to fund at the state average per-pupil levels.

 What most concerns us, is the unfair taxing effect you will create by pushing so much in costs and spending mandates down to the local level.  Unlike the state income tax system, the counties have a “flat” tax rate.  Any additional taxes at the county level will burden more heavily those least able to afford them.  Keep in mind that the median family income in Talbot County is significantly less than in Montgomery County, or even the state on average.

 Property taxes appear to be more progressive because they are based upon the value of property.  The underlying assumption is the wealthier the person, the higher the value of the property.  This assumption is flawed.  In Talbot County, many homeowners are retirees living on fixed incomes, young; two-earner families struggling in this economy; and those long-time Eastern shore watermen and farmers living in family homes.  While the dwindling number of wealthy residents with large water-front homes could afford higher property taxes without hardship.  That would not be the case with the great majority of the residents of Talbot County.  At the state level, taxation is more progressive and more fair.  What is proposed would increase local taxation in a way that would create severe hardship and significant unfairness. 

 Sincerely,

Ted Doyle, President

Talbot County Taxpayers Association

By Editorial Board,

SINCE THE TURN of this century, Montgomery County has exceeded state education funding guidelines, which set minimum per-pupil expenditures, by about half a billion dollars. That extraordinary commitment has helped make the county school system a national model.

Thanks to a radical rewrite of state laws driven by special interests in Annapolis, Montgomery is unlikely to do more than the minimum ever again.

As we wrote recently, state lawmakers are in the process of a sweeping and unwise overhaul of the way schools are funded. The intent is sound: to ensure that counties do not slack off as the state boosts its own school funding. But in the case of Montgomery, the state’s largest system, the effects could be extremely damaging.

The legislation would empower the state to claim local income-tax revenues and redirect them to schools if counties were deemed to have fallen behind on the education funding requirements. It allows for no flexibility — even during recessions, when every other agency of local government is slashed.

Since 90 percent of local education spending goes to personnel, it all but ensures that salaries and benefits for teachers, janitors and other school employees would hold steady or grow, even if thousands of other public employees made deeper sacrifices, as many have in recent years.

The measure, pushed hard by Sen. Richard S. Madaleno Jr. (D-Montgomery) and other lawmakers, as well as by teachers unions, injects steroids into the state’s “maintenance of effort” law. In Montgomery, some are referring to it as a “maintenance of salary” law. And with good reason.

It would neither credit the county with exceeding state minimums in the past, nor allow any realistic wiggle room in the future. The effect, Montgomery officials say, is to guarantee that the county will never again exceed funding minimums, for fear of locking in unaffordable levels.

The legislation could force sharply higher local taxes, even if it meant ignoring voter-approved local tax caps. It could also divert tax dollars away from police, fire, health, libraries, parks, recreation centers and other priorities. In Montgomery, schools already account for a little more than half of the county’s $4 billion in tax-supported spending.

Moreover, since cutting local education budgets in any way would violate state law, another effect of the law could be to enshrine bloat, waste and even fraud in school budgets. Talk about perverse incentives.

Simultaneously, the legislature is moving toward passage of another bill that would stick county councils with half the bill for teachers’ pensions, even though the salaries on which those pensions are based are set by local school boards.

Taken together, the legislation would strip elected county officials of any real say over the half of their budgets devoted to education, and shift real authority to set pay, pensions and benefits to teachers unions, who already enjoy virtually unchecked power in Maryland government. The losers would be voters and taxpayers, who would be stripped of influence and a voice in determining how their money is spent.

The Washington Post

March 14, 2012

Dipping into the money set aside from sale of the Town’s electric utility several years ago, the Commissioners elected to pay off the remaining $5 million in bonds. The Town issued these bonds in 2006 in order to fund the street renovation program which is still going on in the Town. By doing this, the Commissioners will eliminate future debt service expenditures.

Through meticulous examination of expenditures and numerous, difficult planning discussions, the Commissioners established a tentative budget for FY 2012 that will permit them to pass back to taxpayers a large portion of the debt service savings.

The Commissioners voted to reduce the Town’s real property tax rate by 9.4%, to $.58 per hundred dollars of assessed value from $.64. For town businesses, they voted to reduce the personal property tax rate by 10.7%, to $.58 per hundred dollars of personal property value from $.65.

The Talbot County Taxpayers Association commends the Commissioners for their diligent work on the coming year’s budget and the high regard they have for the Town’s residential and commercial taxpayers who are struggling in this very difficult economic environment.

Ted Doyle
President
Talbot County Taxpayers Association

Dipping into the money set aside from sale of the Town’s electric utility several years ago, the Commissioners elected to pay off the remaining $5 million in bonds. The Town issued these bonds in 2006 in order to fund the street renovation program which is still going on in the Town. By doing this, the Commissioners will eliminate future debt service expenditures.

Through meticulous examination of expenditures and numerous, difficult planning discussions, the Commissioners established a tentative budget for FY 2012 that will permit them to pass back to taxpayers a large portion of the debt service savings.

The Commissioners voted to reduce the Town’s real property tax rate by 9.4%, to $.58 per hundred dollars of assessed value from $.64. For town businesses, they voted to reduce the personal property tax rate by 10.7%, to $.58 per hundred dollars of personal property value from $.65.

The Talbot County Taxpayers Association commends the Commissioners for their diligent work on the coming year’s budget and the high regard they have for the Town’s residential and commercial taxpayers who are struggling in this very difficult economic environment.

Ted Doyle
President
Talbot County Taxpayers Association

The Talbot County Taxpayers Association understands that taxation is necessary to fund government services that are appropriate for government and which are delivered efficiently and effectively.

This begs some questions.  What services and at what levels are appropriate for government and not the private sector to provide?  If the services are not provided by the private sector, should we automatically assume that they are appropriate for government to step in and provide?  In attempting to answer these questions, government and the public must distinguish between things they must have versus things they would like to have — necessities versus luxuries.  Politics and interest group pressures many times blur these distinctions.

Are the appropriate services being delivered in the most efficient and effective manner?  Vigorous competition is almost always the best way to obtain the most efficient and effective delivery of a service.  So wherever possible and practical, governments should look to outsource service delivery into a competitive environment.

Sometimes there are no competitive choices available or permitted, policing and public schooling are two examples.  In cases like this, the public and the government must be especially diligent in making sure that efficiency and effectiveness are not compromised over time.  Evidence of a problem here shows up when departments or agencies simply request funding for annual budgets that maintain the status quo, but at a higher delivery cost.  Many times more money is requested to add new service extensions — delivering services to more and different groups than originally intended, “empire building” and adding politically attractive “bells and whistles.”  Rarely is any critical examination ever made about whether types of services and the delivery methods are still appropriate and cost-effective.  Again, politics and interest group pressures work against taking a critical look.

REAL PROPERTY TAXES

Unfortunately, it is usually easier for politicians to raise taxes than to take on the politically difficult task of confronting interest groups and their sympathizers.  The only weapon the taxpayers have, and one that they have used effectively for almost 40 years in this country is to put a cap on the amount by which taxes can increase in any year.  This started famously with Proposition 13 in California.  The idea spread to other states in the late 1970s when property taxpayers were suffering from the extreme inflationary run up of housing prices.  The Talbot County Taxpayers Association began championing a charter amendment to impose a property tax cap about that time.  The Association gathered the thousands of signatures on a petition to put this amendment proposal on the ballot.  Voters approved the cap by an overwhelming majority.  The County Council later used its power to place it back on the ballot to be rescinded.  The voters made it crystal clear that they wanted the tax cap and overwhelmingly voted down the Council’s ballot measure.    Special interests challenged the tax cap in court.  This battle was fought in the 1990s and in the end resulted in the tax cap we now have in our Charter.

The Talbot County Council may not increase the amount it receives in property taxes on properties on the rolls at the beginning of the fiscal year by more than the lesser of 2% or the inflation rate.  It was this taxing limitation that, we believe, protected County taxpayers from an explosive increase in property taxes when property values increased dramatically from the mid-90s through about 2007.  How many residents on low or fixed incomes would have otherwise been put in jeopardy of losing their homes?

New Jersey finally discovered the benefits of capping real estate taxes after years of allowing special interests to prevent state and local governments from raising property taxes to pay for even more of their favored agencies and programs.  New Jerseyans now have the distinction of paying the highest property taxes in the nation.  Last year, Gov. Chris Christie pushed a hard tax cap through the New Jersey Legislature.  Interestingly, it limits property tax increases to the same 2% as ours.

Our Talbot County cap does not appear to be as strict as New Jersey’s.  Our tax levy limit is placed on properties on the rolls at the beginning of the year.  Properties that come on the rolls during the year are outside the tax cap limitation for that year, so their property taxes can be added to that year’s levy.  During the last 10 years, the average growth of Talbot County’s property tax receipts averaged 5.1%, well above the Charter’s 2% limit.  The additional 3.1% annual growth, for a 10-year total of $37,700,000, in property taxes above the Charter’s limit resulted from the new properties that came on the tax rolls during those years.  It is noteworthy that inflation was relatively tame during this 10-year period, averaging 2.4%.

There are some who say that Talbot County is very wealthy and its property owners are under taxed.  The State’s educational establishment takes this position.  For this reason they have chosen to give Talbot County Public Schools the lowest amount of support provided to any school system in the state.  Even so, Talbot County makes up for this shortfall by locally providing 66.5% of what the schools need.  This percentage is second in the state behind Worcester County, which has the enormous commercial property tax base in Ocean City providing it with extraordinary tax revenue.

The State’s educational establishment has accepted the fallacy that high property values equate to a healthy ability-to-pay.  It is true that Talbot County has a high real property tax base.  There are many very high income individuals with large estates in the County.  Their ability to pay cannot be questioned, but there are not that many of them.  The great majority of the property owners in Talbot County are middle to low income.  These are people, who are retirees living on fixed incomes, watermen, farm workers, construction workers, retail workers, and those working in the dining and hospitality industries.  Their homes have become accidentally very valuable because of the run-up in property values from the mid-1990s through 2007 driven by second home buyers and others speculating on the County’s historic housing and waterfront/water-view properties.  Easy credit and low interest rates fueled this bubble.

A house is an illiquid asset.  It cannot be quickly or easily converted to cash in order to provide the funds to pay for property taxes.  The rapidly increasing real property tax base can only be used to generate tax revenue if the owners have the ability to pay out of current income.  It does not appear that Talbot County citizens generally have a large amount of excess income.

The average annual pay in Talbot County was $36,046 in 2009, which are the latest data available.  This is only 71.3% of the state average.  Now one may ask, what about all of the retirement and investment income Talbot citizens receive?  Well, that’s not as much as one would think.  The median household income in the County is $59,633.  This measurement includes all sources of income, including wages, retirement income, investment income and other sources, received by all members of the household.  Talbot’s median household income ranks only 15th among the State’s 25 counties.  By these measures Talbot is hardly one of the state’s “wealthiest” counties.

Another element to consider is that the County must set a flat property tax rate.  This means that the same rate is applied to low-value properties as it is to high-value properties.  The County cannot direct its property tax burden mainly on the high-income individuals.  Any increase is going to hit everyone.  This raises serious fairness questions.

Even if the County Council wanted to increase property taxes beyond the existing cap, it does not have the legal authority to do it.  So, this avenue cannot be used to help close the coming year’s budget gap.

INCOME TAXES

Talbot County has an income tax rate of 2.25% of a tax filer’s Maryland taxable income.  The State of Maryland limits County income tax rates to a maximum of 3.2%.  So there is some, but not much, room for the County to increase its income tax revenue.

As with property taxes, the County must apply a flat rate to all taxpayers.  As noted above, County taxpayers generally do not have high incomes.  Nevertheless, there is still a small, dwindling group of very high-income taxpayers in the County.  The following statistics are revealing.

In 2009, 30% of the total taxable income in the County was on only194 of the 13,615 returns filed.  This small group’s average taxable income was $1,350,000.  The remaining 13,421 filers had an average taxable income of $47,000.  The bottom 50% of earners in the County had average taxable incomes of only $15,100.

Between 2007 and 2009, about 1500 filers, or almost 10%, fell off the County’s income tax rolls.  More importantly, the County lost 148, or over 43%, of its highest income taxpayers.  Certainly the recent recession and market collapse has moved some of these individuals out of this very high-income group.  Another, and possibly the main reason for the dramatic decline of high-income individuals residing in the County was the 32% increase in Maryland’s income rates on millionaires that became effective in 2008.  This is a highly mobile population who can choose to go elsewhere if the tax environment becomes too onerous.  If the new Maryland rates are the reason they left, we will not see them returning.  Regardless of the reason, they are gone.  Their loss accounted for almost 75% of the County’s lost income tax revenue since 2007.

To recover this large loss through an increase in income tax rates means putting the burden on the rest of the taxpayers in the County.  If the income tax rate were increased to the State limit of 3.2%, it would increase County collections from the top 194 individuals — probably fewer now — by about $2.5 million, only 30% of the increased collections.  But, because the County is not allowed to have a progressive rate that puts a greater burden on those high-income earners with the greater ability to pay, the other tax filers in the County would have to pay almost $6 million, 70% of the increased collections.  To recover the County’s income tax revenue losses since 2007, 75% of which came from a decline in the County’s very wealthiest citizens, a tax rate increase would direct 70% of the recovery amount to the other lower-income taxpayers. This highlights the significant fairness issue with raising the County’s flat income tax rate.

Individually, this would add $445 in taxes to the non-wealthiest average filer.  This doesn’t sound like much, but it will make a very big difference in a retiree’s or a working family’s budget.  In today’s environment of rising fuel and food costs, this group has little, if any, discretionary income.  Think of the lower-income half of the County’s taxpayers with only $15,100 of taxable income.  They would have to pay an additional $143 on average.  For this hand-to-mouth income group, this seemingly small amount can represent the tipping point.

Even so, if the County decided to increase its income tax rate, which we would not support, the soonest the new rate could be effective would be for calendar year 2012.  The County would not see the revenues until its FY 2013.  This is not a solution to closing the FY 2012 budget gap.

Recordation and transfer taxes

In FY 2010, about 11% of the County’s revenues came from “other local taxes,” which consisted mainly of recordation and transfer taxes on real estate transactions.  Since 2007, the value and number of real estate transactions, likewise the revenues from this source, have dropped by more than 45%.

The County’s recordation and transfer tax rates combined are much in line with the rest of the counties on the Eastern Shore.  Nonetheless, they are little low when compared to nearby counties such as Queen Anne’s, Dorchester and Caroline.  So, an increase in taxes on property transactions will help with the coming year’s budget gap, but not much because this is a relatively small source of income for the County.  Further, the value and number of property transactions may still be falling — certainly not increasing appreciably.

SUMMARY

Tax increases can play only a small part in closing Talbot County’s coming year budget gap.  The Charter limitation on property tax increases and the timing delay for income tax increases mean that these two major sources of revenue cannot be used to close that gap.  Other local tax rates can be increased, but these revenue sources are small and can only go a little way to closing the FY 2012 gap.

The County has some cash reserves that it built up when times were good two years ago.  It has drawn through most of those in order to balance the last two years’ budgets.  It has very little left that is not committed, such as for funding the pension plans of County employees.  While it may tap into these reserves again for this coming year, the County must preserve some of these in case of emergencies or further unexpected declines in revenues.

So there it is.  The County cannot increase tax revenues and it has insufficient reserves in order to balance the coming year’s budget.  All that is left is to drastically reduce expenses.  Public schools consume more than 50% of the County’s revenues.  For the last two years the County has focused its cuts on the other half of its budget.  There is no longer much room in those departments for further cuts.  Now, regardless of the State mandated Maintenance of Effort requirement, the County must take a very hard look at school funding.  We addressed this issue in our last article.

Have we come to the end of an era of generous school funding in Talbot County? Statistically it looks like the era ended with the housing and financial collapses 2 to 3 years ago.

County revenues from all sources peaked in 2008. Since then the changes have been dramatic. Revenues have dropped about 30%. However, so far, the County has only reduced spending by about 16%. It has made up the difference by drawing down its reserves to where now they are almost exhausted.

During this three-year period when the bottom fell out of County revenues, the County Council cut funding for non-educational services by 30%. While funding for these departments was being painfully squeezed, funding for the County’s public schools was increasing — by more than 8%. This increase was funded by the drawdown of cash reserves.

For the last 10 years, the County has increased funding for its public schools at an average rate of about 4% per year. This may not sound like much but it represented a total increase of school funding of almost 50% over that 10-year period. Incidentally, inflation during that period was relatively tame, averaging about 2.35% annually.

During the last decade, the added spending was not driven by an increase in school enrollment. The student population was essentially flat during those 10 years, staying very close to 4500 students each year. Because personnel costs represent almost 90% of the school’s budget, budget growth must be due in large measure to increases in these costs — the number of teachers and other employees, wage increases and benefit cost increases.

Now we need to look forward. Things certainly don’t look good for the coming year. The County Council has to find a way to close a $10 million gap between projected revenues and the estimated cost of government. For the most part, funding for public safety services must continue. If funding for public schools is not touched and police, fire, and emergency services are mostly protected, what is left to cut are services like libraries, parks, recreation, road maintenance, mosquito control, social services, offices of economic development and tourism, and county administration. The concentration of budget cuts into such a small portion of the total budget will mean the virtual elimination of many of these services for next year.

Into this equation the Board of Education has submitted a request for an additional $2.74 million for the public schools. This is a bump of 8%. They are not going to get this. If they are lucky, the schools will be funded on a per-student basis at an amount equal to last year. That would mean no raises again this year for teachers — they haven’t seen them for the last two years of their present four-year contract either. And, the school system will have to find a way to fund an additional $1.7 million it needs to pay the 12% increase in employee health insurance premiums and employment taxes. This money will have to come from reducing funding in other areas of the school budget.

Given the enormity of the gap the County Council must fill, it would not be a surprise if they decided to cut the school budget below its last year amount. This may be the year for other reasons to violate the state Maintenance of Effort mandate, because the penalties would be minor.

So the current dire situation for public school funding will be getting worse in the near future. Looking out a little further, the situation may not improve for many years. The State has cut almost all of its support to the County and proposes moving a multimillion dollar teacher pension cost to the County sometime in the future. So even if the County starts to see revenues pick up, it will still not get back to where it was until the State sorts out its own finances. Further, as revenue picks up, the County is probably going to direct more funds initially to those services that have been so drastically cut before it looks at the school budget.

With what is likely to be a flat or declining school budget for the foreseeable future, it is time for the Board of Education to get to work. It must start looking at its own policies and practices that are driving the school budget. Dr. Karen Salmon, the schools’ superintendent, is not responsible for policies. It is time for the Board to step up to their responsibilities — do the studies, evaluations and make the hard choices.

The ones being hurt most by this deteriorating situation are our teachers. Unless the Board of Education can develop and institute a plan for sustainable teacher pay and benefit support, teachers are going to face a pretty gloomy future. This is not right! Our teachers deserve to know the truth. If changes of pay, benefits and staffing structures are in the offing, they must be informed and involved from the start. An answer must be found before negotiations for a new contract start with the Teachers Association next year.

In a previous ad we talked about looking at contracting out the student transportation services. Other counties on the Eastern Shore contract out all or virtually all of these services for an average cost savings compared to Talbot County of 30%. This represents close to $1 million.

The number of classroom instructors increased 10% over the last 10 years, but there was no increase in enrollment. The way in which employees can get sustainable pay increases is through increases in productivity. An increase in classroom instructors with no increase in students is negative productivity. It is time for the Board to take a very hard look at its staffing, both in the classroom and elsewhere. To maintain the present staffing levels is to harbor unfounded hope that things will improve. This is a luxury the Board can no longer afford.

The Board needs to take a good hard look at its student levels in each school and classroom. To a great extent this issue is related to the one above. We may have to forgo the benefit of a very low student-to-teacher ratio because the costs are just too high. Let’s see if we can’t leverage our classroom teachers through the use of technology. And, we may have to forgo the luxury of keeping schools like Tilghman Elementary open.

We have suggested only three obvious structural cost issues, but we are sure the Board and the school administration can find many others. These will be very difficult and politically-challenging issues, but the Board of Education must tackle them and support the efforts of Dr. Salmon, her staff and the teachers.

Tax increases seem like an obvious solution, but there are many problems here. Because of charter limitations and collection timing, there can be no increases in property or income taxes that will provide additional money to close next year’s budget gap. There are also issues that will work against using taxes for a long-term solution. The Talbot County Taxpayers Association will talk about these in our next article.

What you think? Do you believe this crisis is real and that Board of Education can step up to this challenge? We would like to know your thoughts.

Recently the Talbot County Public Schools published its 2010 Annual Report. This was sent to all County residents. It was a very informative and well-produced document.

It was very gratifying to see that our school system is one of the top performers in the State — in a state where schools are ranked among the best in the country. The Fact Book for 2009-2010 published by the Maryland State Department of Education lists many important instances where the State’s public schools are number one in the country.

The 2010 Annual Report shows Talbot County’s public schools performing at or better than state averages on the Maryland State Assessment tests. The number of Advanced Placement Scholars is high and growing each year. The Report notes that Easton and St. Michaels High Schools were cited by Jay Mathews of the Washington Post and Newsweek as two of the nation’s top high schools with challenging programs. They were in the top 5% of the nation’s 27,000 public high schools.

The really good thing about this outstanding performance is that the TCPS achieved it with costs 15%, or $2,063 per pupil, less than the average county school system in the State. Only two other county systems have lower costs per pupil.

Leveraging performance of highly qualified teachers through technology is almost certainly one of the important factors in the system’s efficiency and effectiveness. The Report shows that the TCPS well exceeds the State average in its percentage of “Highly Qualified Teachers.” The recently completed Johns Hopkins University study confirms the value of the high school one-to-one laptop program. Dr. Karen Salmon, Superintendent of Talbot County Public Schools, in her presentation of the 2010 Annual Report to the County Council talked of even more technology improvements in the classrooms.

A fair interpretation of this information would be that it demonstrates the efficiency and effectiveness of our public school system. The system is producing above-average results with far-below-average costs. This is a testament to the outstanding performance of the system’s superintendent, administrators and teachers. But, we are perplexed that TCPS is not touting this as a major accomplishment. The report seems to put a negative spin on its having the next-to-the-lowest funding in the state. We suspect it does this to bolster its case for $2.8 million in additional funding from the County in FY 2012, mainly for the purpose of providing raises for teachers and other employees. In our view, this effort is misdirected at the County.

During the current fiscal year, TCPS represent almost 53% of all County spending. The County Council is working on its budget for next fiscal year. Because of substantially reduced revenues, which we discussed in an earlier report, it is looking to dramatically reduce expenditures. Due to the State’s Maintenance of Effort mandate, the County cannot reduce spending per pupil below its current level. That means any reductions must come from other County services. The TCPS’ share of County spending could, therefore, increase up to 59%. TCPS is effectively squeezing out all other important County services.

By any measure the County is not underfunding the schools. It ranks fifth in the State for per-pupil funding of it schools. The problem is that Talbot County receives the lowest amount of combined Federal and State support of any county. TCPS should be directing its efforts at increasing the portion of funding the County receives from the State.

It must also direct its efforts internally. We are sure there are many ways it could find savings that over time could fund the raises it wishes to provide its teachers. One place to search for cost-savings for example would be transportation. According to The Fact Book, TCPS spends the fourth highest amount in the State per pupil for transportation. It spends 15% higher than the state average. More striking is that TCPS has the highest transportation cost on the Shore. It spends almost 30% more per pupil than the average of all school systems on the Maryland Eastern Shore. That difference amounts to almost $1 million. A possible reason for this might be that TCPS is the only system on the Shore that does not contract out all or almost all of its transportation requirements. Whatever the reason, this would be a good place to go next to look for efficiencies.

In summary, Talbot County Public School systems are performing very well and we should be proud of the job that they are doing with our students. The County by law must continue to fund its schools at per-pupil rate equal to prior year’s budget, even though its income tax revenues have dropped from $32 million to $19 million. All County departments and agencies have been asked to look for ways to cut costs. The Talbot County Public School system should be no exception.