On Wednesday, MACo Executive Director Michael J. Sanderson and representatives from counties across the state testified in front of the Budget and Taxation Committee to propose an amendment to SB 159 Building Opportunity Act of 2019 and SB 731 Public School Construction – Maryland Stadium Authority – Supplemental Funds.

Overall, MACo supports these pieces of legislation as they provide a response to recommendations that Maryland counties have offered up to the State over the past several years. However, there are still concerns with these bills as the quick increase of funding could unintentionally disadvantage small and mid-size counties, who may be unable to readily gather the local funding match required to participate.

From the MACo Testimony:

• This Bill’s Funding Infusion Will Accelerate the State’s Recovery from a School Construction Backlog

Since 2009, the State has left—on average—more than $300 million in school construction requests without funding each year.

This legislation’s provision of up to $1.8 billion in additional school construction funding over five years is gauged to save these projects from further delay. The broad based nature of this program— available to all counties, and all types of projects, including renovation and updates to aging facilities, or new building to accommodate new growth—could be the providential intervention needed to provide safe and modern schools for students statewide.

• Project Management by the Maryland Stadium Authority Will Provide Technical Assistance and May Allow Better Balance of State and Local Funding

Under this legislation, the Maryland Stadium Authority would provide management and oversight of public school facility projects. The need for more technical assistance for school boards was a central theme of the 21st Century School Facilities Commission Report. While larger school systems with their own construction management staff may waive out of this requirement, centralized technical assistance may benefit smaller school systems and manifest school construction efficiencies statewide.

Employing the Maryland Stadium Authority to perform school construction projects may also create economies of scale that help re-balance State and county school construction efforts. For example, under this legislation, before any bonds are issued to finance improvement to a public school, the Authority may pay for any costs of start-up, administration, overhead, and operations of the Authority or costs of engineering, architectural, and other design professionals. Under current law, many of these costs would be considered ineligible for state school construction funding, leaving them the sole responsibility of county governments. Grouping these costs, perhaps into one contract for several schools, could create efficiencies, and right-side the state-local cost share.

• Allowing the State to Forward-Fund the Local Share for Two Years Could Help More Counties Participate in this Program

County governments would all seek to identify matching funds to allow them to take advantage of this legislation’s additional funding for school construction, however, it would be difficult for some to dramatically increase their spending within a year’s time. Local debt limits pose hurdles to doubling debt, while shifting capital projects could delay time-sensitive improvements already in the pipeline, such as road safety projects, police communications upgrades, and detention center repairs. Any additional debt may pressure operating budgets with additional debt service. This year, counties are especially mindful of their operating budgets as they anticipate new fiscal responsibilities stemming from the Commission on Innovation and Excellence in Education’s recommendations.

Counties request that this legislation clarify that memorandum of understanding with the Authority may allow the State to forward-fund the local share of a school construction project for up to two years. This allowance would parallel the inverse and relatively common practice, whereby county governments forward-fund the State share of projects when State funding is unavailable, and ensure greater accessibility to the program for all counties.

For more on 2019 MACo legislation, visit the Legislative Database.