With the 2022 Legislative Session rapidly approaching, MACo is profiling some major issues that stand to gather attention in the General Assembly’s work. Here, we preview school construction and capital projects.
In the 2021 legislative session, the General Assembly overrode Governor Larry Hogan’s veto of the Blueprint for Maryland’s Future, setting into motion a complete overhaul of the State’s public education and how it funds and completes school construction and capital improvement projects.
Built to Learn Act
Passed in 2020, but hinging on the General Assembly’s override of the governor’s veto of the Blueprint, the Built to Learn Act, was delayed in implementation. The Built to Learn Act of 202 codified certain percentage distributions of new funding from Maryland Stadium Authority (MSA) revenue to six of the State’s largest jurisdictions, while reserving the remaining 11.5 percent for projects from the State’s other counties.
According to the Department of Legislative 2022 Legislative Session Issue Papers:
Following the General Assembly’s vote to override the veto in February 2021, the Built to Learn Act immediately took effect, although funding mandates in the Act for fiscal 2022 no longer applied due to the delayed implementation. The Built to Learn Act authorizes the Maryland Stadium Authority (MSA) to issue up to $2.2 billion in revenue bonds, backed by annual payments from the Education Trust Fund, for public school construction projects in the State, including to support a possible public-private partnership in Prince George’s County.
MSA anticipates issuing a total of $2.0 billion in bonds to finance the program although changing market conditions may affect the eventual total amount. Exhibit 1 shows the mandated distribution of Built to Learn funds based on the $2.0 billion estimate in total proceeds.
As of October, IAC had approved 14 projects that are eligible for an estimated $391.8 million in State funding from Built to Learn bonds. These projects included 3 in Anne Arundel, 4 in Baltimore, 3 in Charles, and 1 in each — Carrol, Frederick, Howard, and Montgomery counties. MSA issued the first series of bonds totaling $293 million in November.
School Facilities Assessments
After a two-year delay, the statewide assessment of public school facilities was completed in July. During the interim, the Workgroup on the Assessment and Funding of School Facilities reviewed the results of the assessment and made major decisions on how the data may be used to support the prioritization of State funding for school construction projects. The work group also considered updates to the State/local cost-share formula, eligible gross area baseline allowances for school construction, and other issues related to capitol projects. A final report is forthcoming by the end of the year.
- Establishing the Local Revolving Loan Fund to aid low-debt capable counties in forward funding school construction projects;
- Asking the Interagency Commission on School Construction (IAC) to help address concerns with enrollment projections;
- Requiring the IAC to study determinants for Gross Area Baselines for school construction projects that are eligible for State funding in-line with the Blueprint for Maryland’s Future;
- Creating a State-funded incentive to add 5% of State funding per “green” project a school undergoes that would make the school a carbon net 0 facility;
- Suggesting that the Priority Fund shall begin in FY 27, funded at $80 million annually;
- Proposing that IAC may use the assessment data to provide context in IAC programs, but not to determine any funding decisions within the programs, until May 1, 2026; and
- Recommending the creation of a new legislative workgroup be formed in July 2024 to determine Maryland Condition Index (MDCI) categories and weights to be used for the Priority Fund in FY 27.
Upcoming for the 2022 legislative session
The recommendations of the Workgroup on the Funding and Assessment of School Facilities will be drafted into legislation and presented before the General Assembly for consideration in 2022, likely with little debate, but there’s always potential for modification.
Additionally, MACo remains hopeful that legislative and/or executive leadership will address temporarily low school enrollment projects during the COVID-19 pandemic and its impact on State/local school funding formulas.
Stay tuned to Conduit Street to see how school construction and other top issues are taken up during the 2022 legislative session.
Read the full DLS issue papers (analysis of school construction starts on page 67).