A bill that would have provided lottery revenues to school construction projects in Montgomery, Baltimore, and Prince George’s counties has been amended into a bill to study school construction funding by the House Appropriations Committee.  The full House recently passed the bill in its amended form.

HB1323/SB927  would have provided Baltimore, Prince George’s and Montgomery counties with up to $20.0 million each annually in addition to other public school construction funding.  The amended bill removes that language, and instead requests a study of public school construction.

The amended bill, HB1323 – Public School Construction – Creative Financing Study requests the Interagency Committee on School Construction (IAC) to study public school construction, noting that,

• Despite the large infusions of State and local funding for capital improvements that have been invested since fiscal year 2006, the gap between Maryland’s public school facility needs and funding capacity remains large; and
• Rapid enrollment growth and maintenance or renovation needs in older schools continue to place enormous pressure on all school facilities; and
• If the State intends to continue to position itself as a global leader in education, the State and counties must collectively pursue a path forward by looking at all available options for meeting the financial demands of public school construction

The study will look at more creative and reliable financing mechanisms, including the use of lease payment for alternative financing methods. Under the legislation,

The Interagency Committee on School Construction shall conduct a study and make recommendations on:

1. developing creative means, financing or otherwise, to increase funding for public school construction;
2. creating more reliable revenue streams that could include leveraging funds by counties to meet public school construction needs; and
3. examining the use of lease payments for other alternative financing methods, as defined in § 4-126 of the Education Article, by local school systems for public school construction.

MACo supported HB 349 Education – Study of Alternative Financing Methods for the Purpose of School Construction, a bill which in its original form would have made private investment into school construction more accessible in all counties by clarifying that lease payments on privately constructed schools may be excluded from maintenance of effort like other debt service payment.  The amended bill will require the Department of Legislative Services to examine the use by local school systems of lease payments or certain other alternative financing methods for school construction.  HB 349 has passed the House and crossed over into the Senate.

For more information, see our previous posts on Conduit Street, Three Counties Work Together for School Construction Funding, Senate Committee Considers Public School Construction Capital Budget, Anne Arundel to Consider Creation of Special Fund for School Construction.