In a meeting last Thursday, the Interagency Commission on School Construction (IAC) adopted new regulations, effectively increasing the state share of costs for qualifying school construction projects in nine of the most resource scarce counties.
During a regularly scheduled meeting of the IAC, Executive Director Alex Donahue proposed a change in the existing regulations that set forth the state-local cost share for qualifying school construction projects in smaller jurisdictions with limited tax capacity. The proposed changed was offered and adopted by the IAC after getting the approval of General Assembly leadership. This change applies to:
- Cecil
- Queen Anne’s
- Wicomico
- Garrett
- Allegany
- Dorchester
- Caroline
- Kent
- Somerset
From Executive Director Donahue:
The IAC’s seven factor state-local cost share in COMAR really has lacked a factor addressing the small fiscal capacity of low wealth small counties relative to the large capital projects because the factor that addresses county fiscal capacity in our formula measures county wealth using a per student measure and that is really originally created for MSDE operating budgets and foundation formula. That per student measure appropriately reflects fiscal capacity against LEA operating costs but it does not really reflect fiscal capacity against the huge capital investments that each LEA’s portfolios inevitably require. And although this may have been less of a problem 20 or 30 years ago it is now a significant problem. This solution will make an improvement in the short-term for counties that have the least resources to work with locally.
To compensate for the formulas omission, the commission adopted an eighth factor to increase the the state share of low wealth small counties by up to 25 percentage points if:
- the total wealth of that county is less than 10 percent of the average of the top four wealthiest counties; and
- the county does not have significant untapped tax wealth that could be harnessed to help pay for large capital projects as shown in the table.
The rows highlighted in green reflect the changes that were adopted on Thursday, March 12, 2026.
According to information shared during the meeting this change will operate at the project level which means it will not require more funding for these counties each year and will not take funds from other counties. It just means that the assistance is not an infusion of funds to these jurisdictions but rather an increase in how much state assistance can flow to the number one priorities in those counties. While the change doesn’t address all of the issues, it is a good step forward.