Montgomery County’s delegation in Annapolis will introduce a bill to the General Assembly to exempt the county’s mandatory education funding for the current fiscal year, Sen. Richard S. Madaleno Jr. said Monday.

Under the so-called maintenance of effort law, local governments are required to fund their school systems at the same level as the previous fiscal year.

If they fail to do so, local governments face a reduction in state aid for its school systems. For Montgomery County, that could mean as much as $46 million lost for the school system.

Montgomery County has exceeded its maintenan ce of effort funding requirement for years, but when the recession zapped tax collections, the county sought a one-year exemption. The state school board said no.

County Executive Isiah Leggett (D) said Monday that maintenance of effort is a "stupid law."

"It is well-intended, but has a consequence that is unbelievable," Leggett told a crowd of 500 county and state leaders at the Committee for Montgomery legislative breakfast in North Bethesda.

After the state board denied the county’s request, the county government approved a plan for the current fiscal year to lend $79.5 million to the school system by selling bonds. In June, Schools Superintendent Jerry D. Weast wrote a letter to State Superintendent Nancy S. Grasmick questioning whether the county’s loan proposal was legal.

The Attorney General’s Office issued an opinion Nov. 4 saying Montgomery’s plan did not satisfy the maintenance of effort requirement, setting the county up to be fined by the State Board of Education for its failure to live up to the law.

The delegation’s bill will not address the fiscal 2011 operating budget, Madaleno (D-Dist. 18) of Kensington said.

On Monday, House Speaker Michael E. Busch said lawmakers plan to consider ways to rework the maintenance of effort law and the criteria for getting a waiver from payment.

"That’ll be one of the undertakings that we take up during the General Assembly session," said Busch (D-Dist. 30) of Annapolis.

Although the waiver process needs reform, lawmakers must consider the implications before waiving the funding requirement, school board President Patricia B. O’Neill said.

"I think maintenance of effort is filled with good intent, to make sure that adequate funds are spent on public education," said O’Neill (Dist. 3) of Bethesda. "And we don’t want to lose sight of that."

The maintenance of effort law needs to be changed, Madaleno said. Under current practice, waivers are granted to a county if it has "extraordinary economic circumstances," such as a major employer leaving the jurisdiction, he said.

But the state board won’t grant a waiver for circumstances affecting every county, like the national recession, Madaleno said.

Last week, Weast proposed a $2.26 billion operating budget for fiscal 2011, which is $25 million — or about 1 percent — more than the current budget. His 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 provide that money, then the superintendent could cut $43 million from the system, including 240 classroom teacher and 30 central office administrator positions, and curtail the purchase of textbooks and instructional materials.

On Tuesday, schools budget director Marshall C. Spatz said the system might have to identify more cuts if it doesn’t get the full $79.5 million from the county.

Due to the complexity of the maintenance of effort law, it is still uncertain how much more money the system would have to cut, Spatz said.

"We’re trying to find the amount of the fine so that they can start the process," Weast said after Monday’s breakfast.

Once the board imposes the fine, the county would "probably stop paying the bonds" that are part of the debt service plan for the school system to pay off a loan from the county government, Weast said.

Leggett tied support for the waiver to a call for state support for education and for transportation, which he said are necessary in order for Montgomery County to remain the state’s economic engine.

He also renewed calls for a gasoline tax increase and for the state to continue to cover teacher pension costs.

In recent years, state legislative leaders have threatened to shift pension costs to county governments, something Busch on Monday said would not happen in 2010.

Timothy Firestine, Leggett’s chief administrative officer, objected to Weast’s comment.

"We don’t see any circumstance where the county would not pay the debt service on its bonds. In fact, the county charter requires us to pay for debt service first before any other thing in the government is paid," Firestine said. "It doesn’t even require an appropriation by the county council."

"We need support from the state," Leggett said. "We demand it as a county, because what is good for Montgomery County is good for the state of Maryland. And we simply want to make good on that pledge."

Staff Writer Sean R. Sedam contributed to this report.