Alonso wants to borrow $1.2 billion to repair city schools
Baltimore schools Superintendent Andres Alonso makes the case for alternative financing before the Senate Budget and Taxation Committee. On left is Attorney Paul D. Shelton, and on right is Robert Heck, school board commissioner. (Kim Hairston, Baltimore Sun / January 24, 2012)
"What is unique is the extent of the need in Baltimore City," said Andrés Alonso, the school system's CEO, ticking off a list of problems from faulty heating systems to broken windows. "This will allow us to really target, in a short period of time, huge systemic needs."
Alonso told members of the Senate's Budget and Taxation committee that such a plan could save the city time and money by combining the needed repairs into a single construction initiative and that work would begin as soon as funding becomes available.
But the plan hinges on financial commitments from the state and an increase in the city's bottle tax — both of which could prove tough sells. Sen. James E. DeGrange Sr., an Anne Arundel County Democrat, raised concerns about increasing the city's tax on bottled beverages, a proposal that has drawn opposition from retailers and the beverage industry and citizens weary of the city's high tax rates.
"That doesn't seem to be very popular. … There's concern there might be some jobs lost because of it," DeGrange said of the bottle tax. He also urged the city to swiftly secure its funding sources before seeking a guarantee of the state's funds. "They need to have their ducks in a row before they come to us," he said.
School officials and advocates have argued that needs in city schools are great. Alonso has warned that he plans to close more schools because the cost of repairing the dilapidated buildings would be prohibitive. A study commissioned by the school system, which will be released in February or March, will spell out the needs of individual schools, including those which should be closed, he said.
"We're going to have to close some schools to lower the cost," Alonso said. "This is not punitive, but this is a tradeoff to give our kids the best possible environment for learning."
Alonso's speech marked the first public acknowledgment that the city hopes to model its construction funding plan on a groundbreaking schools project in Greenville, S.C. Transform Baltimore, a coalition of education advocates led by the American Civil Liberties Union, has been lobbying city leaders to carry out Greenville's plan, which would require a nonprofit or other entity to float the bonds on behalf of the school system.
"They really understand that this is the best way to fix our schools," said Bebe Verdery, who leads the ACLU's education project. A 2010 report by the group estimated that the schools required $2.8 billion in repairs.
Alonso asked the state legislature to commit to dedicating at least $32 million a year to school construction. Those funds would be combined with more than $40 million in city money, including proceeds from a proposed bottle tax hike, to generate a funding stream would allow the school system to secure the bonds, Alonso said.
Mayor Stephanie Rawlings-Blake, who did not attend the briefing, has said that she would devote $23 million in new funds to schools construction to allow the school system to float as much as $300 million in bonds. That includes $10 million from raising the bottle tax from 2 cents to 5 cents, $12 million in savings from a recalculation of the teacher pension plan, and $1.6 million in revenue from a planned slots casino.
Alonso said he would combine that with as much as $19 million that the city normally allocates to school construction.
Rawlings-Blake is "working closely with Dr. Alonso and the school system on innovative alternative financing options that build upon the new revenue streams the Mayor has proposed," spokesman Ryan O'Doherty said in an email. "There are a number of issues that haven't been resolved yet and must be resolved before we present the plan and provide additional details."
City Council President Bernard C. "Jack" Young, who attended the briefing accompanied by several aides, said that he came to show support for the plan. "Our students deserve better," he said. "I want buildings that are conducive to their learning."
An aide said Tuesday that Young would not stand in the way of the bottle tax increase, which the Rawlings-Blake administration is expected to introduce in coming weeks. The aide said Young also would encourage Councilman Carl Stokes to promptly move the measure through the taxation committee he chairs.
Young had abstained from a vote on the initial 2-cent bottle tax in 2010, but quietly lobbied against it. Stokes had previously said he would delay a hearing until the city's full budget is released in late March.
Alonso told legislators that he needed to demonstrate to lenders "flexibility and predictability" in the funding. Currently, the state funds specific projects at city schools, such as a new boiler or gymnasium.
"The source of the dollars is a practical and political issue," said Alonso. "Banks won't care as long as we meet our obligation."
Under the plan, the school system would join forces with another entity that would float the bonds, such as a nonprofit formed for this purpose, Alonso said.
Several committee members signaled strong support for the initiative, including Sen. Nathaniel McFadden, an East Baltimore Democrat. He praised the several dozen students, teachers and parents who crowded into the committee room for Alonso's briefing.
"You today are making history with your presence here to advocate for the improvement of your school system," McFadden said.
Sen. Richard S. Madaleno Jr., a Montgomery County Democrat, also offered praise for Alonso's plan.
"We have a lot of issues to deal with, but this might be the most important for both the city and the state," Madaleno said. "I haven't been to one Baltimore City school where I could see out the windows."
Madaleno said the city should have its share of the funding secured by mid-March, when the Senate is slated to vote on the budget.
After the briefing, Alonso huddled with schools activists and students, many wearing their school uniforms and clutching bright-colored backpacks, and also with Del. Heather Mizeur, a Montgomery County Democrat who has been a strong advocate for the funding plan.
The advocates said they planned to both lobby the legislature to support the plan and to prod the City Council to pass the bottle tax. Rob English, lead organizer for Baltimoreans United in Leadership Development, said his group would fight hard on both fronts.
"This is the season that we're going to stand up for the children," said English.