'Expensive to be poor' — how state rules have helped keep city schoolkids in the cold

We certainly appreciate Gov. Larry Hogan’s decision to provide $2.5 million in state funding to help pay for the repairs to Baltimore schools’ heating systems, drop in the bucket though that may be next to the system’s needs. But his continued insistence that mismanagement at the system’s North Avenue headquarters caused the problems grossly mischaracterizes the situation.

There is no question that city schools have had management problems with maintenance and capital improvements in the past. The Interagency Committee on School Construction reported extensively on those issues in a 2014 analysis that noted deficiencies in the way the city prioritized its projects, failures to conceive and execute projects comprehensively, poor coordination and sequencing and faulty contract administration. However, a follow-up report a year later documented substantial progress on most of those fronts, including a new system to determine priorities and improved communication and coordination between the system and the state. No doubt, more improvements can and should be made.

But the specific evidence Governor Hogan has cited for his claim — millions the city system reverted to the state that had been slated for projects including HVAC repairs — is another story altogether. That, too, is a well documented problem for city schools but one with its roots in Annapolis, not North Avenue.

When the state approves funding for a particular project, it often spreads out the money over multiple years. That’s a policy that predates Mr. Hogan, and in wealthier jurisdictions, it doesn’t pose much of a problem. In fact, jurisdictions like Baltimore and Montgomery counties routinely use local money to forward-fund the projects and then apply for state reimbursement after contracts are executed or even after the job is complete. They have no trouble meeting deadlines for spending state appropriations because they have already done so, and they don’t run into surprises about the cost of projects that are already done.

But Baltimore, which not only has a low tax base but also massive infrastructure needs outside its schools, can’t do that. Whereas Baltimore County budgeted $116 million in county funds — and Montgomery much more than that — for school capital projects this year, Baltimore City has $17 million. (Mayor Catherine Pugh has pledged to increase that to $19 million next year.) Consequently, city schools have often had to wait until they had all the money in hand to bid out the projects.

That can lead to a variety of issues. In some cases, the district has decided to close the school in question in the intervening years, so the project may no longer make sense. In other cases, the schools have been subsequently included in the separately funded 21st Century Schools building initiative, so projects are dropped from the normal state capital funding budget. And in other instances, bids solicited years after an initial cost estimate prove more expensive for reasons that have nothing to do with the administration of the school district. Labor and material costs may have increased. Building codes may have changed, necessitating more expensive upgrades. Systems that were in bad shape when the city asked for state funds may have deteriorated further. Those have been the driving factors in the city’s return to the state of tens of millions of dollars that might have been used to prevent the frigid conditions Baltimore students experienced last week.

As city Del. Brooke Lierman aptly observed, we’re witnessing a government corollary to the maxim that it’s expensive to be poor.

Treasurer Nancy K. Kopp, who sits on the Board of Public Works, was raising questions about the city’s reversion of state construction funds long before the present crisis, and in November, schools CEO Sonja Santelises sent the board (which includes Governor Hogan) an explanation of the issue. City and state officials have been in discussions about how to resolve the partial funding problem.

But aside from shedding some light on why the city schools have sent so much money back to the states, Ms. Santelises noted another consequential issue. Some of the money that the city has sent back has been allocated to other, previously requested projects. But some of it has been used by the state to cover a portion of the city’s share of capital improvement program funding in subsequent years, double-counting part of the state’s contribution to the city. Baltimore officials estimate that phenomenon — which, to be clear, also predates Mr. Hogan’s tenure — has shortchanged the city by about $66 million over the last decade, with the result that the money has effectively enabled the state to provide more to wealthier districts.

Mr. Hogan says he wants to create a new “inspector general” to police school districts for waste, corruption and abuse. We’re always happy for more accountability and will be glad to consider the details of his proposal. But while Mr. Hogan is in a mood to investigate, he ought to look into how the state’s policies are to blame for the city schools’ heating debacle, too.

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