Senate Committee Hears Testimony on School Board Private Financing

Today Maryland’s Senate Budget and Taxation Committee heard testimony on a bill that would allow a school board to seek private financing for facility projects and capital leases without county government approval. SB 924 was presented by Senator Serafini, its sponsor, who stated that as a result of concerns expressed by education stakeholders, he wanted to ask MACo and the Maryland Association of Boards of Education to study the idea, rather than pass the bill as drafted.

In his testimony, Senator Serafini shared how alternative financing by county school boards could reduce overall costs of school construction projects in the western region of the state in his powerpoint.

A recent article in the Herald-Mail described,

With about three weeks left in the 2015 General Assembly session, chances of the measure making any progress are far from certain. The Maryland Association of Counties has not taken a position on the bill, in part, because the bill was introduced so late, said Michael Sanderson, executive director of the organization. “The bill would strike some new ground,” Sanderson said.

As described by the Department of Legislative Services,

This bill [as drafted] authorizes local school boards to seek and obtain private financing to cover all or part of the costs associated with any public school facility project or capital lease for equipment, without the approval of any State agency or entity or any other proceedings or conditions. The aggregate principal amount of private financing outstanding may not exceed 5.0% of the board’s annual operating budget, and projected annual debt service may not exceed 2.5% of its annual operating budget. The term of any private financing may not exceed 10 years.

For more information, view the powerpoint used by Senator Serafini here, information about the bill here and the full article from the Herald-Mail here.