Construction progress is visible on the new Spangdahlem Elementary School being built on Spangdahlem Air Base in Germany April 29,…
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The report from Comptroller Brooke Lierman said that the state needs to improve its school facilities if it wants to keep its reputation for top-ranked schools, but that doing so will require “a statewide reimagining of funding formulas and revenue streams.” The report did not make recommendations on that reimagining, however.
The report is part of the comptroller’s “State Spending Series” that assesses costs on various projects, impacts on the state and other economic factors. The first report, in March, focused on transit and the second, released in April, on climate change.
Thursday’s report was an assessment of school construction in the state.
“Spending on public school infrastructure is the second-largest public investment in our country,” Lierman said in a statement with the report. “This report should be a wake-up call; it highlights the urgent need to prioritize a state of good repair for Maryland schools, various ways that the state and local governments can control school capital costs, funding trends, and considerations for resource allocation.”
The report said that Maryland is one of only a handful of states that does a regular assessment of the condition of all its school facilities. It notes that 271, or about 20%, of the state’s public school facilities are in “like new, good, or satisfactory” condition. Of the remaining 80%, about 34% were characterized as “needs repairs” and 46% were rated as ““functions unreliable.”
The report states the Interagency Commission on School Construction estimated the nearly 1,000 schools would require repair, renovation or replacement just to receive satisfactory status. The commission is working on a project to assess the cost of additional school construction that would include prekindergarten classrooms and science labs.
Although Maryland ranked 17th in the nation on new construction cost per square foot, the state spent less on construction than some of East Coast and its neighboring states at $392 per square foot in 2020. In comparison, New Jersey spent $488 per square foot; Massachusetts at $480; Connecticut at $465; and Delaware at $420.
According to the report, the current cost for construction per square foot is about $600. In addition, construction costs have increased by 42% since 2019 and the cost of inflation has also risen.
Although the 30-page document doesn’t specifically address how to fund various school construction projects, but it does offer a few examples done in other states and Maryland jurisdictions.
In Massachusetts, about 1% of its 6.25% sales tax is dedicated to the Massachusetts School Building Authority, which reimburses school districts for construction projects with a cost-sharing formula based on wealth and population.
The report noted Iowa increased its sales tax from 5% to 6% by the state’s Secure an Advanced Vision for Education (SAVE) to dedicate increase revenue to school infrastructure projects and property tax relief.
In terms of Maryland jurisdictions, the report notes how Frederick County Council approved a dedicated revenue stream for school construction last year. It increased its property tax rate by five cents to $1.11 per $100 of assessed value to pay for school projects.
The report noted that while Baltimore City makes one of the greatest funding efforts in the state, the funding that results is constrained by the city’s limited property tax base:
One-third of properties in Baltimore are owned by governments or nonprofits, many of which provide immense value to the state via employment opportunities for Marylanders and the provision of vital services, but which are exempt from property taxes; Low median home values ($219,300 in Baltimore compared to $397,700 in Maryland overall); and Low median incomes ($60,000 in Baltimore compared to $100,000 in Maryland overall).
The challenge for funding school projects extends to small school districts as well, the report said.
Even with only five schools, Kent County has the oldest school buildings on average in the state. The report notes that county will have challenges in funding its shared of an estimated $68 million project to replace its middle school, which opened in 1950. In addition, the county has the state’s smallest population of more than 19,000 and an average annual capital budget of $2.7 million between fiscal year 2012 to 2020.
While school funding formulas have been largely unchanged, the report said, costs have been driven up by inflation and by expectations for larger schools that may serve multiple functions in the community, and by higher security demands. Some savings can be found, but that is only part of the solution.
“While increased capital improvements can be addressed through cost cutting measures, the ultimate solution will rely on a statewide reimagining of funding formulas and revenue streams,” according to the report.
