ANNAPOLIS – State appropriations and a bill from House Speaker Michael Busch still won’t come close to the $600 million Maryland public schools have requested for school construction this fiscal year.
Gov. Robert Ehrlich designated $155 million for school construction in his 2006 budget released Wednesday and a bill from Busch, D-Anne Arundel, is only expected to provide $60 million through elimination of a corporate tax loophole.
“That’s a substantial amount of money,” said David Lever, executive director of the Maryland Public School Construction Program. “But it’s about one-fourth of the amount provided for all requests.”
Schools spent much of Wednesday appealing to the Board of Public Works for more construction funding, but one Howard County school official said his expectation was that his district would get “none” of its request.
Last session, Busch’s bill providing additional funds for the renovation and construction of new schools passed the House, but failed to come to a vote in the Senate.
When Busch was asked recently if the bill would pass the Senate this time, he answered, “It will pass the House.”
Senate President Thomas V. Mike Miller Jr., D-Calvert, supports Busch’s school construction bill, but plans to introduce his own bill to generate money for school construction through making slot machine gambling legal in Maryland.
“It’s the viable source of revenue,” said Miller. “And there is huge opposition with raising taxes in the state.”
Ehrlich, who has staunchly opposed raising income or sales taxes, supports the idea of using slot machine revenue to fund education and said it will add $100 million more to school construction. But the House has blocked slots legislation the past two years.
Schools are billions behind in school construction funding, according to a study requested by one of the House bill’s sponsors, Delegate Sheila Hixson, D-Montgomery.
Now that the schools have requested $200 million more in construction funding than they did last year, the situation is even worse, Lever said.
In Montgomery County, schools are saturated with portable classrooms – more than 700 portable classrooms contain 17,000 students, according to Joe Lavorgna, planning director for Montgomery County Schools.
Lavorgna said the school system requested $60 million in school construction funds last year and only received $9 million. This year, the schools tried to make up for the inadequate funding by requesting $126 million, double the amount requested last year.
“The amount of money from the state is spiraling downward while the needs are increasing rapidly,” said Lavorgna.
The House school construction bill will alleviate the backlog of school construction projects through transfer tax revenues received as a result of closing a loophole in Maryland law.
Currently, the law allows limited liability corporations to avoid paying the transfer tax that other corporations and county homeowners are forced to pay.
Sponsors of the bill said that closing the loophole will generate about $60 million.
But the bill last session failed to pass the Senate Budget and Taxation Committee.
Delegate Elizabeth Bobo, D-Howard, said “very strong lobbying from those who don’t have to pay the transfer tax” had an impact on the Senate not passing the bill.
But Sen. Rona Kramer, D-Prince George’s, of the Budget and Taxation Committee, said there were many problems with the bill and the bill was “more complex than it seemed on paper.”
For example, she said, if someone wanted to sell a small interest in a property for a short period of time, they would have to pay the transfer tax twice.
She also questioned how the bill sponsors know how much money the bill will generate for school construction.
“I’m fine with the concept of providing funds for school construction,” Kramer said. “But there are some issues that need to be addressed before this bill gets passed.”