Local Aid Percentages Still Undecided in Quirky Year for School Construction

The State has yet to commit to its share of school construction projects for fiscal year 2020, even though deadlines have passed for local governments to submit projects for funding consideration.

This year marks a transition in school construction funding – from a system where the Governor, Comptroller, and Treasurer, as the panel that makes up the Board of Public Works, granted funding for public school construction projects – to a new process that empowers the Interagency Commission on School Construction with school construction funding decisions. The General Assembly overrode the Governor’s veto to pass this change into law in the spring of 2018.

In the shuffle of responsibilities from the Board of Public Works to the Interagency Commission on School Construction, one bit seems to have been left up in the air. And that is the State’s share for school construction projects in the coming year – fiscal 2020.

The draft 2020 cost shares were released in June 2018, along with the instruction for local governments to submit their school construction projects for funding consideration. However, the Interagency Commission on School Construction has not yet adopted them.

State shares of school construction vary by county, with the State providing a larger share of school construction project costs to counties that the State determines to be less wealthy based on a complicated formula in state regulations. In the past, these percentages have been certified for three year periods, providing advance notice to jurisdictions.

The same legislation that created the new Commission on School Construction also requires that the Commission update the State and local cost-share percentages every two years. However, MACo has heard from the Public School Construction Program that while the cost-share will be every two years, they will recalculate the numbers annually, and if they see a more than 5% decrease in what the state cost share should be for the current year, they will phase-in that increase. This policy is based on pre-existing regulations.

Therefore, for this coming year, while the cost-shares will not be updated from the numbers calculated last year, they may change. For several counties, that could be bad news. Last year, an action by the Board of Public Works held harmless counties that would have seen a decline in state share amounts. According to the draft percentages released by the Public School Construction program, that protection may be pulled back in FY 2020.

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Several counties would experience a decrease in state funding levels if the FY 2020 draft calculations are approved. While some of these funding levels may appear high, the cuts are deeper than they appear, as state funding only applies to certain project costs. This dynamic means that even with a state cost share of more than 90%, the State may ultimately only cover half of the total costs of a school construction project. For more on that topics, see previous Conduit Street coverage, It’s Not Apples-to-Apples in School Construction Funding.

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Those negatively affected by the draft state share changes could experience deeper declines as state funding only covers certain project costs.

According to the staff to the Commission, the Commission may adopt the draft cost shares in their January meeting. For those counties that will see a decline in their State share, the delay in the Commission’s certification may be an opportunity to reach out to them or the Public School Construction Program with concerns.

The Interagency Commission on School Construction accepts public comment at each meeting. Registration for public comment opens one week before a scheduled meeting, to register for public comment, call (410) 767-0617 or submit this Google form, or contact Commission staff.

For more information, see:

House Bill 1783, The 21st Century School Facilities Act

State Local Cost Share Formulas for FY2016-FY2020 (draft)

Revised Instructions for Submission of the FY 2020 Capital Improvement Program

Regulations on the state cost share including the wealth calculation

 

 

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