Council Must Cut Waste from the Budget to Fund Strategies that Work

Montgomery County Taxpayers League, 4/17/26

Ever wonder why MCPS is such a tough nut to crack?  Why can’t you find anything in the budget to explain why interventions are focused on elementary school kids, while struggling middle and high school kids are left largely to fend for themselves?

Strategic budgeting and appropriations are key to MCPS success- The Taxpayers League thinks that a strategic approach to budgeting works better for outcomes than the state’s line-item approach because it’s how successful organizations are managed and governed.  We start by asking what we get for nearly $4 billion?  Almost half of our kids come from low-income households, most aren’t proficient in reading or math, and year over year improvements are pitiful.  At the same time parents are challenging school consolidation, program expansion, and deferred HVAC replacement plans that may have poor returns on investment or weak links to strategic plan objectives. On top of this, taxpayers are fed up with the structural deficit MCPS is driving with poorly designed and executed strategies.

Council Spending Affordability Controls Reinforce Waste- These controls rely on the state’s Maintenance of Effort law which doesn’t differentiate instruction from excessive overhead spending (45% vs. 37% in Fairfax schools), and is divorced from proficiency gains.  But, holding to a Maintenance of Effort budget is a starting point to reign in this budget, and requires strategic budget cuts to reduce the Executive’s budget recommendation by $203 million (see note 1 in below for our recommended budget cuts).  New strategy funding can come from smarter compensation, reductions of non-strategic overhead costs, and elimination of old academic programs that aren’t as effective as intervention strategies.

Warehouse Waste is a New Example- The Parents Coalition just broke a story about potentially $17 million in overhead waste - <see below>.  Previously they doggedly pursued bus camera and electric bus contract fraud that contributed to a Council OIG investigation, and ultimately a decision by the state Board that the electric bus contract is illegal.  The Parents Coalition found that potential warehouse facilities spending includes outrageous $3 million in architecture fees for two warehouses already built, with $3.7 million in annual lease fees (both warehouses are in the inventory system), and another $13 million for building out the second warehouse- maybe to save money by consolidating office space, but will this offset the up-front costs?

Call to Council Action- Waste is different from fraud, and has much greater savings potential. The Council needs to act immediately during this budget review cycle to require the Supt to justify all spending with a cross-walk to the Board approved strategic plan.  There will be many gaps where spending doesn’t match objectives in the plan, or objectives are unfunded.  For example, the warehouses don’t fit with  Strategic plan Goal 3 for “positive climate and effective operations”, objective 8, since facilities maintenance performance metrics that could link to the value of warehouses are too broad, and baseline performance objectives are “in development.”  It is also notable that objective 12: “operate with efficiency and transparency, ensuring responsive and accountable use of public resources”, doesn’t have an associated performance objective for this waste, with new performance audit objectives and accountability standards “in development”.  Also, it’s time to give our school Board a dedicated OIG who will use GAO standards to provide continuous information about internal controls over instruction and overhead operations, independent of management.

Bonus Homework- While you’re at it, ask the Supt if:

1. Internal controls in any of his overhead functions are documented and reviewed annually to see if they are working? The annual financial audit doesn’t do this
2. Return on investment analyses were done for the warehouses and can be made public for comparison to alternatives and competing capital projects like school consolidation?
3. In-house overhead function spending achieves strategic objectives, and is cost-effective compared to alternatives like shared services with the county, or outsourcing. The Board has noted that outsourcing is a way to take advantage of best practices.  In house practices aren’t necessarily efficient or effective.  More importantly, outsourcing can be tied to contracts that require desired outcomes for payment.

Background- We were engaged by the Supt last year to recommend spending controls by strategy to supplement state mandated line-item controls, built up from school improvement plans. We didn’t get far, but learned that tying Council appropriations to a strategic budget is how the Council can make a difference in outcomes.  Talking about non-instruction overhead, the Supt said in last year’s budget request that central office employment has grown 24% since 2019, while enrollment has decreased. Our analysis showed that over the last 10 years, nearly ½ overhead FTE was added for every new student.  Conclusion: the budget process is broken, largely ignores base spending, and tries- but fails- to justify new costs as either discretionary or not, rather than by strategic accomplishments. Challenge: Use the Board approved strategic plan to allocate resources. 

Note 1- Recommended MCPS budget cuts- use MCPS Budget Table 1A for new spending as a starting point:

1. Eliminate the general wage increases of $105 million since employees will get generous step increases, and because our teachers make on average $107K vs. $95K for Fairfax, for 10 months of work. Pay raises need to be targeted at low-income schools, and overhead employees have been over paid for the last 4 years.
2. Eliminate $40 million for health trust interim funding by increasing employee contributions which are well below national norms.
3. Drop $28 million for discretionary spending increases since there’s no evidence that high priority academic strategies are fully funded.
4. Reduce base overhead (non-instruction) spending which is full of potential savings. This will be evident as strategy gaps once MCPS cross-walks all spending to the strategic plan, and does a competitive salary comparison to Fairfax schools.  Low hanging fruit include excessive warehouse operating cost spending noted above, and electric bus waste.  Our recent opinion piece about out of control electric bus spending showed the contracts don’t cross-walk to the strategic plan environmental objectives which are for buildings, not buses, steal $30 million a year from student reading and math proficiency strategies, and should be cancelled due to fraud in compliance with the State Board’s finding.

Parents Coalition Findings

Taylor's Fake Warehouse Emergency. McKnight had already leased a New MCPS Warehouse.

MCPS Board of Education President Karla Silvestre and Superintendent Monifa B. McKnight signed a 15-year lease for a new MCPS warehouse in 2023.

Parents' Coalition (MD)

Apr 13, 2026

October 23, 2025 MyMCMedia reported:

…Superintendent Thomas Taylor, Ed.D., said he believes it is time to look for a different warehouse location. MCM joined a tour of the current facility Tuesday evening with Taylor and other MCPS officials…

But MCPS had already looked for a new warehouse.

MCPS had already hired an architect to help build out the new warehouse.

And Superintendent Monifa B. McKnight and Board of Education President Karla Silvestre had already SIGNED A 15 YEAR LEASE for a new MCPS warehouse.

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March 7, 2023, the Board of Education approves a lease for a new MCPS warehouse at 301 North Stonestreet, Rockville. The lease starts out at $65,567.25 a month and increases each year.

April 18, 2023, Board of Education President Karla Silvestre and Superintendent Monifa B. McKnight sign the 15 year lease for the new MCPS warehouse at 301 North Stonestreet in Rockville (read the lease at this link).

July 1, 2023, the Board of Education and County Council approve $2,500,000 to hire an architect to build out and supervise the new warehouse at 301 North Stonestreet.

June 24, 2024, the Board of Education hires Superintendent Thomas W. Taylor.

October 22, 2025, Superintendent Thomas W. Taylor holds a closed Capital Budget presentation for 7 people. Superintendent Taylor claims MCPS needs a new warehouse.

October 30, 2025, the Board of Education approves Superintendent Taylor’s surprise “new” warehouse lease. The monthly payments on this lease will be $245,614.

November 25, 2025, Board of Education President Julie Yang writes a letter to the County Executive and County Council asking for funding for a “new” warehouse, omitting any mention of the new MCPS warehouse obtained under the 2023 lease.

…Materials Management Warehouse: this request will move multiple outdated, crumbling, and inefficient warehouse facilities from the Stonestreet location in Rockville…(Page 3 of CIP)

The Board of Education now wants an additional $13,000,000 to build out this “new” warehouse space on top of the $245,614 monthly lease. The County Council is set to vote on the $13,000,000 in Capital Budget funds in the next few weeks.

January 22, 2026, the Board of Education approves $441,380 for an architecture firm for the “new” new warehouse. Superintendent Taylor tells the Board of Education that these funds were already approved in the FY 2024 Capital Budget. That’s true that the funds had previously been approved, but not for this project. The funds were approved to support the warehouse lease signed by Board President Karla Silvestre and Superintendent Monifa B. McKnight.

April 2026: The Board of Education now has 2 new warehouses, both on leased commercial properties with monthly payments of over $300,000 a month and climbing. Instead of MCPS utilizing Board of Education owned land and paid for buildings, MCPS is now incurring ongoing monthly debt that ties up Operating Budget and Capital Budget funds.

There is no explanation for why MCPS Superintendent Taylor ignored the new warehouse lease that had already been signed by Board of Education President Karla Silvestre and Superintendent Monifa B. McKnight.

More on Superintendent Thomas W. Taylor’s fake MCPS warehouse emergency at this link.