Here is an Easy Way to Fully Fund Howard County's School Budget

At the County Executive’s 2nd FY2019 budget hearing, County Executive Kittleman stated that it would cost an additional $50.5 million in order to fully fund the school system. According to him, this amount corresponds to a property tax increase of 10%. The total expected gap between increased revenue and expenditures is a deficit of $85.8 million.

Howard County’s crown jewel is its school system. People come from all over the country and sacrifice their hard-earned dollars so their children attend some of the best public schools in the country. Unfortunately, we have become victims of our own success.

The county has been undergoing unprecedented levels of growth for many years. Growth impacts public facilities such as schools and roads, unless mitigated properly. The county uses a so-called adequate public facilities ordinance (APFO) to manage growth. In conjunction with this ordinance that tests for adequacy of public facilities before additional growth is approved, the county assesses surcharge fees for schools and roads.

However, these measures have not been implemented effectively. The APFO school capacity standards were recently strengthened. When the 2017 Howard County Public School System (HCPSS) feasibility report called for redistricting nearly 9,000 students county-wide, it cause many parents to pay attention and cause a massive resistance. It prompted them to ask questions. Why are so many students being asked to move at the same time?

The answer was: out of control growth. Until recently, the capacity testing standards did not include high school capacity, which led to extremely overcrowded high schools.

Also last year, the County Council introduced a bill to reform the county's APFO. The initial version of the bill was the product of the APFO task-force created by the County Executive.

The task-force recommendation was described as a compromise between developers and other stake holders. On the one hand it recommended a very slight improvement in school capacity. On the other hand, it called for a "get-out-of-jail-free" fee that developers could pay to build in overcrowded school districts.

While the County Council passed the bill that strengthened APFO, the school surcharge fee was taken up by the State Delegation.

With respect to school surcharge fees assessed on new development, for nearly 15 years, Howard County has been charging developers very low school surcharge fees. For FY2018, the county charged an average of $5,1831. Meanwhile, counties such as Montgomery and Prince George's have been charging 4 to 5 times the fees2. In 2018, Montgomery County charged $26,827 per NEW HOME.

It turns out that during this period not only did the county have poor growth management processes leading to school overcrowding, it has been charging very low school surcharge fees to pay for new school construction, thereby subsidizing developer profits.

It is abundantly clear the county is not charging market-rate school surcharge fees. The school system is significantly strained to a point that fully funding it would require “increasing property taxes by 10%”. What if the county was charging surcharge fees close to the amount charged by our neighboring county? What would have been the financial picture then?

In 2017, the total number of residential building permits completed in Howard County totaled 2,1473. Taking Montgomery County’s surcharge fees, this amounts to a total of $57.6 million, implying that the county has forgone nearly $46.5 million in revenue. Almost the amount needed to fully fund HCPSS.

The 2019 spending affordability report recommends three sources of revenue for the future: transfer tax, ambulance/EMS fee, and recovery of public safety overtime costs. But, why does it not mention school impact fees as an additional source?

If the County Executive, County Council, and State Delegation reach a deal to increase the fees to market rate then the school system would not need to increase class sizes, it would reinstate elementary school foreign language, increase special education funding, and provide needed funding for building maintenance.

When the county faces financial problems, it often impacts schools, police, and fire – the facilities that we absolutely need. Considering the school system is the main attraction that has fueled the county’s growth, does compromising its funding and continues success make sense?