Can a Maryland county pay its own money to top up the salaries of local social services employees who are technically state workers?

Plain-English summary

The Secretary of Human Resources asked the Attorney General about a practice the Legislative Auditor had flagged: several counties, including Baltimore City, Prince George's, Montgomery, Baltimore, Howard, Cecil, and Anne Arundel, were paying extra money directly to employees of their local departments of social services (LDSS), on top of the employees' regular state salaries. Local department employees are legally state employees, so the question was whether counties could legally do this, and whether the payments had to go through the State's own budget and appropriation process.

The opinion concluded that counties may make these supplemental payments. It traced the history of local funding for social services, which used to be mandatory under a cost-sharing formula but was phased out by the late 1970s, and found that current law still lets counties voluntarily appropriate money for LDSS costs, including salary supplements. Because the supplement money moves straight from the county treasury to the employee's paycheck, without passing through the local department or any state account, the opinion concluded that State appropriation and fiscal control rules simply do not apply to it.

Currency note

This opinion was issued in 1991 and analyzed a series of amendments to Article 88A of the Maryland Code running from 1967 through 1988. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis, including possible recodification of Article 88A's provisions governing local departments of social services. Treat this page as historical context, not current legal advice. Verify the current statutory framework for county funding of local social services employees before relying on any specific rule described here.

Common questions

Can a Maryland county pay its social services employees more than their state salary? According to this 1991 opinion, yes. The Attorney General concluded that county governments may supplement the salaries of local department of social services employees, since state law permits counties to appropriate additional funds for LDSS administrative costs and does not prohibit these direct salary supplements.

Does a county have to run these extra payments through the State budget process? No, according to the opinion. Because the supplement funds are county money paid directly to the employees rather than routed through the local department of social services, the opinion concluded that State appropriation and fiscal control procedures do not apply to them.

Would the answer change if the county gave the money to the department instead of the employees directly? The opinion noted that the result might well be different if a county transferred the funds to the local department of social services, which then paid them to the employees, but said the facts presented to it involved direct county-to-employee payments only.

Background and statutory framework

Local departments of social services are state agencies whose employees are State Merit System employees under Article 88A, §13(c)(3), but each local department is a separate entity with its own advisory board and local government participation in appointing its director under Article 88A, §§13(a) and (b) and §14(a) through (c). Local government funding of these departments was once mandatory: former §§18A, 56, and 60A of Article 88A required counties to contribute toward the cost of social services and public assistance programs under a formula (former Section 18A(c)) capped at ten cents per hundred dollars of assessable property, with the State covering any shortfall. Chapter 709 of the Laws of Maryland 1974 phased out these mandatory local contributions over three years, and Chapter 103 of the Laws of Maryland 1978 repealed the underlying sections entirely.

Chapter 6 of the Laws of Maryland 1988 later amended Article 88A, §13(d) to make clear that, while local contributions were no longer required, a county was not prohibited from appropriating additional funds for a local department's administrative costs. The opinion also pointed to Article 88A, §14A(9), unchanged through all of these amendments, which lists among a local department's duties taking active steps to secure local funding appropriations for needs not otherwise financed. Reading these provisions together, the opinion found that state law affirmatively authorizes counties to use their own appropriations to pay salary supplements to local department of social services employees, and that direct payments from a county to those employees fall outside the State's own appropriation and disbursement rules because the money never passes through anyone subject to those requirements. The opinion noted that Montgomery County's supplement arrangement traced back to a 1977 "Dual Merit System Agreement" among the county, the Department of Human Resources, and the Department of Personnel, and that Baltimore City's LDSS employees, unlike other counties' employees, were transferred into the state personnel system only in 1975 under Chapter 709 of the Laws of Maryland 1974.

Citations and references

Statutes:

• Article 88A, §13(c)(3), establishing that local department of social services employees are State Merit System employees
• Article 88A, §§13(a) and (b), providing for local advisory boards and local government participation in appointing a local department's director
• Article 88A, §14(a) through (c), further provisions on local department structure referenced alongside §13(a) and (b)
• Article 88A, §14A(9), directing local departments to seek local funding appropriations for needs not otherwise financed
• Chapter 148 of the Laws of Maryland 1967, the law that made most local department of social services employees state employees
• Chapter 709, Laws of Maryland 1974, transferring Baltimore City's local department employees into the state system in 1975 and later phasing out mandatory county funding contributions
• Former §§18A, 56, and 60A of Article 88A, the repealed provisions that once required county contributions to social services and public assistance costs
• Former Section 18A(c), setting the formula (up to ten cents per hundred dollars of assessable property) for mandatory county contributions
• Chapter 103 of the Laws of Maryland 1978, repealing former §§18A, 56, and 60A
• Chapter 6 of the Laws of Maryland 1988, the Annual Corrective Bill amending §13(b) and adding permissive language to §13(d) allowing counties to fund additional administrative costs
• Article 88A, §13(b), conformed by the 1988 Corrective Bill to remove references to the repealed mandatory local payments
• Article 88A, §13(d), the provision permitting, but not requiring, counties to appropriate additional administrative funds for a local department

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1991/Volume76_1991.pdf (this opinion appears at printed pages 366-370 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

SOCIAL SERVICES

Budgetary Administration - Salary Supplements By Counties

November 22, 1991

The Honorable Carolyn W. Colvin
Secretary of Human Resources

Mr. Mark Friedman
Acting Deputy Secretary for Operations
Department of Human Resources

You have requested our opinion concerning the legality of payments made by several counties to supplement the salaries of employees of the local department of social services ("LDSS"). Specifically, you ask whether these are payments authorized by law and are consistent with State appropriation requirements.

For the reasons stated below, we conclude that county governments may supplement the salaries of LDSS employees. Because these funds, derived from county appropriations, are paid directly to the employees, they are not subject to the State appropriation process or State fiscal control procedures.

I

Background

You have advised that, as a part of a recent audit of the Social Services Administration, the Legislative Auditor has questioned the payment by several counties of supplements to salaries of employees of local departments of social services.

Currently, Baltimore City and six other counties (Prince George's, Montgomery, Baltimore, Howard, Cecil, and Anne Arundel) make separate salary payments to LDSS employees. In some cases, only a few employees are involved; in only one county, Montgomery, are the payments universally applied.1 As the legislative audit report notes, the counties have elected to supplement the salaries of these State employees, who primarily serve the citizens in their subdivisions, because the employees' State salaries are less than the salaries of county employees whom they may supervise or who perform similar duties.

II

Statutory Basis for Local Government Contributions

Local departments of social services are State agencies, and their functions are State functions. 67 Opinions of the Attorney General 356 (1982); 61 Opinions of the Attorney General 786 (1976). Local department employees are State Merit System employees. Article 88A, §13(c)(3) of the Maryland Code.2 Nonetheless, these departments are separate entities in each county, each with its own local advisory board and with local government participation in the appointment of the local director. See Article 88A, §§13(a) and (b) and 14(a) through (c).

The local government's role in funding the operation of local departments of social services, although greatly reduced from what it once was, has not been eliminated. Former §§18A, 56, and 60A of Article 88A required local government contributions to pay for the cost of social services and public assistance programs. These local contributions were based on the total value of assessable property in each subdivision, to a maximum of ten cents on each hundred dollars of assessable property (the so-called "James Formula"). This same statute provided that any amounts needed to operate these programs in any county that were in excess of county contributions had to be made up through State appropriations.3

Section 18A was amended by Chapter 709 of the Laws of Maryland 1974 to provide for a three-year phaseout of these local contributions, so that by fiscal year 1977 no such local contributions would be required from Baltimore City and the counties. In Chapter 103 of the Laws of Maryland 1978, the General Assembly repealed not only §18A but also §§56 and 60A, which referred to the phaseout requirement.

In Chapter 6 of the Laws of Maryland 1988, the Annual Corrective Bill, the General Assembly amended §13(b) to conform to the earlier legislative changes by eliminating references to required local payments. However, this statute also amended §13(d) so as to permit, but not require, a county to appropriate funds to pay for the administrative costs of its LDSS: "This subsection does not prohibit any county from appropriating additional funds for administrative costs of the local department." Article 88A, §14A(9), which also addresses county supplementation of an LDSS' costs, was unchanged by any of the amendments discussed above:

The board of each local department of social services in the counties and the local commission of the Department of Social
Services in Baltimore City has the following duties and functions (specifically, by way of example and not in limitation):

(9) To take active steps to secure the appropriation of local funds by the local governing authority to meet needs not financed by or available through any other federal, State or local plan, project or program, and which are not in conflict with the State plan.

Thus, State law plainly authorizes payments out of county appropriations to defray administrative and program costs of an LDSS. A county is free to use this authority to pay salary supplements to LDSS employees.

III

Fiscal Procedures

If, as we understand is the case, the salary supplements in question are paid by the counties directly to the employees, the requirements of State law governing the appropriation and disbursement of State funds are simply inapplicable. The money in question is never in the hands of anyone subject to those requirements. The result might well be different if a county transferred the funds to the local DSS, which in turn paid them to the employees. But the facts, we are told, are otherwise, and State law does not prescribe procedures for direct payments from counties to LDSS employees.

IV

Conclusion

In summary, it is our opinion that direct salary supplements by certain counties to local department of social services employees are proper, and State fiscal procedures are inapplicable to the transfer of these funds.

J. Joseph Curran, Jr.
Attorney General

Sherry L. Kendall
Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions and Advice

1
Officials of Montgomery County, the Department of Human Resources, and the Department of Personnel in 1977 executed a "Dual Merit System Agreement" specifically governing the administration of personnel procedures for Montgomery County DSS employees. The provision regarding supplements, a part of §3, reads as follows:

The decision to provide a salary supplement is a County decision. The County will unilaterally continue a policy of paying a salary differential on a class-by-class basis. All positions within a classification will be treated uniformly in the County's supplementation process. Salary supplements will be based on determinations made through job analysis performed by the County. The differentials paid to State classifications shall be consistent with the concept of "equal pay for equal work" and in accordance with classification procedures established in Chapter 33, Montgomery County Code, 1972, as amended. (The County agrees to indemnify the State and save it harmless from and against any and all claims, actions, damages, liability and expenses in connection with payment of any salary supplement.)

2
Except for Baltimore City DSS employees, local department employees became State employees as a result of Chapter 148 of the Laws of Maryland 1967. Baltimore City DSS employees were transferred into the State system in 1975. Chapter 709, Laws of Maryland 1974.

3
Former Section 18A(c) provided:

The State Department shall compute regularly the aggregate tax rates imposed and probably necessary to be imposed by Baltimore City and each of the counties for the several programs and activities listed in subsection (b), and shall notify the Governor thereof.
A monetary sum representing any portion of this aggregate for any such political subdivision which would exceed a maximum as specified in subsection (a) shall be included by the State Department in its request for appropriations from State and federal funds; and the several sections of the Code specified in subsection (b) are modified from time to time to cover this possibility.