8:00 AM EST, January 29, 2012
The proposal to rapidly overhaul Baltimore's aging school facilities that district CEO Andrés Alonso presented to a state Senate committee last week represents one of the most important and innovative ideas the city has offered in recent years to break out of its cycle of poverty and disinvestment. Baltimore cannot flourish without high-quality public schools, and although students have made impressive gains in recent years, the city will not be able to attract and retain families if children are trying to learn in dilapidated facilities. The city and state are investing tens of millions of dollars a year in repairs and renovations, but that is accomplishing little more than slowing the decay of Maryland's oldest stock of school buildings. What's needed is a complete overhaul, and the approach Mr. Alonso has adopted offers the best chance to achieve it.
But it is also complicated. It is new to Maryland, and it involves a lot of moving parts. It requires authorizing legislation from the state, and there is a real risk that it could get lost in the shuffle of what is shaping up to be a busy General Assembly session. Legislators can't let that happen. The timing is right for this effort to move forward, and although the total scope of the project may seem daunting, the piece of it the General Assembly needs to consider right now is manageable.
Education advocates, led by the ACLU and other groups, have for years been pressing the issue of Baltimore's crumbling school buildings, a problem they have estimated would cost $2.8 billion to fix. Some classrooms are stiflingly hot. Others are freezing cold. Water fountains don't work or can't be used because of lead contamination. Electrical systems can't handle the number of computers some schools need. Roofs are leaky, and boilers go out. In all, about 70 percent of city schools are rated in poor condition. Not only do these problems present physical barriers to learning, but they send a message to students and parents that the city does not take seriously its effort to provide a quality education. That city students have achieved what they have under these conditions is remarkable.
What city officials and education advocates are proposing is this: A nonprofit or other third-party entity would sell a large sum of bonds and use the proceeds to engage in large-scale, systematic repair, renovation and replacement of city schools. A construction program of sufficient magnitude would create economies of scale and would take advantage of historically low costs for borrowing, labor and materials.
To make that work, Mr. Alonso wants to allocate existing state and city funding streams for school construction and renovation, plus some new ones MayorStephanie Rawlings-Blakeis proposing, to the new entity in the form of a block grant, which would be used to pay off the bonds over 30 years. At current rates, $1 million in annual funding could support about $15 million in borrowing. The school system estimates that it could raise as much as $1.1 billion in capital in the first phase of such an effort.
Where things get tricky is in the mayor's plan to extend and increase in size Baltimore's bottle tax, which was scheduled to expire at the end of this fiscal year, and dedicate the money to school construction.
The mayor has expressed support for the general idea of allocating school construction funds in the form of a block grant, but she has not specifically embraced the notion of using existing city and state capital funds — themselves the product of general obligation bonds — to leverage additional borrowing. City Hall and the schools remain in discussions over the logistics, advisability and legality of such a plan.
Meanwhile, Ms. Rawlings-Blake is pushing a bill to increase the bottle tax from 2 cents to 5 cents and to dedicate the resulting revenue, which she estimates at $10 million per year, to the school construction effort. Combined with the reallocation of some other funds, she believes that could support $300 million in borrowing.
Passing the bottle tax in the first place was politically difficult, and the beverage industry is gearing up for a fight to stop its extension. City Council President Bernard C. "Jack" Young, who abstained from a vote on the bottle tax two years ago but argued against it, has said this time that he will not stand in the way of a quick council vote on the matter. But the inclusion of the bottle tax as part of the plan may be a sticking point in Annapolis, where the beverage industry and liquor lobby wield significant influence.
Legislators shouldn't get hung up on the question of whether the mayor wants to use bottle tax proceeds as part of the plan. They should instead focus on the larger idea Mr. Alonso presented, of which the bottle tax makes up a relatively small part. (Without it, he estimates the city could still support a bond sale of nearly $1 billion.) They also need not tackle many of the other contentious proposals that advocates and some members of the General Assembly have suggested as a means to bring the overall scope of the project up to the $2.8 billion the ACLU has said is needed. Just because Georgia approved a similar program that involved asking voters to approve adding a penny to the local sales tax doesn't mean Maryland would inevitably head down that road.
All the city schools are asking the legislature to do is to commit to a minimal annual allocation for Baltimore school capital funds and to distribute them in the form of a block grant rather than through the normal process followed by the Interagency Committee on School Construction (IAC), which typically handles repair, renovation and construction projects on a case-by-case basis. That presents enough legal and regulatory hurdles of its own, but those obstacles are surmountable during this legislative session.
Because the idea Mr. Alonso is proposing is new to Maryland, there is considerable uncertainty in Annapolis about how it would work and whether it would be possible under current law. Mr. Alonso contends that it is, but legislators and other state officials are not so sure. Among the unresolved questions are what impact such a plan would have on the state's debt capacity and the extent to which the city or state would be an explicit or implicit guarantor of the bonds issued by the third-party entity managing the construction. Del. Keith Haynes, a Baltimore Democrat, on Friday introduced a bill to create the framework for such a plan, and hearings on that legislation will offer more opportunities to hash out those issues.
There are a number of regulatory questions that would also demand consideration. The state would need to maintain accountability so that it's sure the money goes where it's supposed to. It would need a way to monitor compliance with procurement regulations, minority business goals and prevailing-wage rules. Any new schools would also have to meet energy-efficiency standards.
And finally, if lawmakers do approve a program like the one Mr. Alonso described, they will need to ensure that the process of carrying out school construction and renovation remains transparent. Any third-party entity that handles such an important task should be held to the same standards of public monitoring as the government.
That's a lot for the General Assembly to process, and frequently, big, complicated ideas like this one take more than one year to make their way through Annapolis. But there is good reason for the legislature to make a serious effort at enacting some version of Mr. Alonso's proposal this year. The school system will soon receive a more detailed analysis of its facility needs, and Mr. Alonso will use that in the months ahead as a guide for a comprehensive reevaluation of its buildings. Some schools will close; others will be consolidated. That provides the opportunity for a smart, forward-looking plan to efficiently and effectively modernize Baltimore's schools. But if that's going to happen, we need to start now.
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