ACLU Presents Maryland Budget and Tax Policy Institute Plan to Finance Baltimore City School Building Modernization

December 15, 2010

Download the financing proposal

 

CONTACT:

ACLU of Maryland, Bebe Verdery, 410-889-8550 x106

or Meredith Curtis, 410-889-8550 x 115; media@aclu-md.org

MBTPI, Neil Bergsman, 410-727-6367; nbergsman@mdnonprofit.org

 

BALTIMORE, MD - The Maryland Budget and Tax Policy Institute (MBTPI) today released a proposal outlining a financing strategy that could fully fund the $2.8 billion needed to modernize all schools in Baltimore City within 10 years. The report, commissioned by the American Civil Liberties Union of Maryland (ACLU), follows on the heels of the ACLU's Buildings for Academic Excellence study, which detailed the poor condition of Baltimore City's school facilities and the negative impact that they have on student achievement, teacher retention, and the stability of Baltimore communities. The ACLU also highlighted innovative financing models that have been successful in full-scale school modernization initiatives in other districts and states.

 

"We have to break out of the traditional ways of funding capital improvement projects," said Neil Bergsman, Director of MBTPI. "While the current funding system is inadequate, there are many innovative and proven funding strategies that can help us realize the goal of safe, healthy, and educationally supportive school buildings."

 

MBTPI's approach involves using a "partnership organization" that could issue bonds and manage all aspects of the construction and renovation program. The partnership organization would have the capacity to let bonds and repay them over a 30-year period, rather than the shorter 15 year period under the current system. This strategy, now being used successfully in other districts, will dramatically lower the amount needed each year to pay back the bonds. Under MBTPI's proposal, the full $2.8 billion would be available up-front, which will allow for all city school buildings to be renovated or built new within 10 years. By comparison, this year, Baltimore City Public Schools received just $48 million from the state and city for school renovations.

 

"There aren't many people who can afford to buy a home with a 15-year mortgage. However, when those payments are stretched out over a 30-year period, the payments are much more manageable," said Mr.Bergsman. "A structure that allows for increased borrowing and a longer pay back period will dramatically increase the amount of funding available to improve school facilities quickly."

 

In addition to the increased funding that would be available under a partnership structure, both the city and state would need to generate revenue or develop new income sources to pay off the debt for the school construction plan.

 

The report proposes that the debt would be repaid over 30 years through a combination of the following sources:

 

Georgia, Iowa, and Florida have used the local option sales tax successfully to fund large-scale school building and renovation programs. State enabling legislation would be needed for the City to implement these strategies.

 

"This report lays out a blueprint demonstrating that Baltimore's $2.8 billion need for school improvements can be met - with enough political will," said Bebe Verdery, Director of the ACLU's Education Reform Project. "The status quo - children and teachers in inadequate, dilapidated school buildings - is unacceptable."

 

"People may not realize that neglecting school infrastructure deficiencies is a debt, and it will only grow larger the longer you wait," said Mary Filardo, a national expert on school facilities and Director of the 21st Century School Fund, who has been collaborating with the ACLU on financing strategies. "Now is the time to invest. Interest rates are at an all time low, thousands of jobs can be created, and construction costs are down. And the city will see many more educational and economic benefits for making this important investment."

 

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