State To Hold Counties Harmless for School Construction Funding

After careful consideration, the Interagency Commission on School Construction (IAC) will hold counties harmless for school construction funding during FY 2021 and FY 2022.

Last year, the authority to grant funding for public school construction projects switched from the Board of Public Works (made up of the Governor, Comptroller, and Treasurer) to the IAC through the 21st Century School Facilities Act, which passed through the Maryland General Assembly in 2018. During the IAC’s September 12 meeting, the major topic was adoption of Fiscal Year 2021 and Fiscal Year 2022 State Cost Shares. The Commission discussed the table of comparisons for state cost share and there was agreement that this was not the appropriate time to be cutting funding for local LEAs. Maryland State Superintendent of Schools Karen Salmon suggested holding counties harmless and this motion was adopted by the Commission.

The proposed changes to state funding would have left several counties short in the coming years – the IAC’s vote keeps those jurisdictions “flat funded” for FY 21-22

The graphic above  was given to Commission in advance for their consideration. By holding counties harmless, the counties that would have had a negative “difference” (Carroll, Frederick, Harford, and Queen Anne’s) will retain their FY 2019/FY 2020 calculations of funding. Baltimore City was treated separately. While the City was not held harmless from a reduction in it’s state share, the Commission approved a motion to revise the State Cost Share formula to be consistent with the statutory change defining Tier 1 counties, to include a 24-month grace period to factor unemployment rate and income level. As a result of this motion, Baltimore City’s state share percent will actually increase by 3% over the prior year. Counties that were calculated to receive increased funding will still receive the allocated amount of new funding.

The IAC also adopted a common definition of pay-as-you-go funding as required by HB 1738. The need for this common definition is because some counties use sources of local revenue other than General Obligation bonds or traditional PAYGO, such as specific revenues from dedicated sources. To most effectively capture these various funding mechanisms, the IAC issued a letter to the LEAs with the following definition:

“Paygo” means actual project expenditures for capital projects or
maintenance capital projects from a local cash funding source other than
general obligation bonds with a construction value greater than $25,000
and a minimum useful life of 15 years. They must be bondable under the
same criteria that apply to capital projects supported by Maryland general
obligation bond proceeds (even if Paygo was actually used to pay for the
project).

Other topics addressed in the IAC meeting include Healthy School Facility Fund Project Approvals, Adoption of the FY 2019 Maintenance Report, and Approval to Utilize Emergency Funding for DGS Design Review Consultants.

See the Commission’s full agenda document.

Visit the IAC website for more details on the school construction process.

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