Change to school funding formula OK’d by House

A bill addressing an education funding formula under which Baltimore lost state aid was approved Thursday by the House of Delegates after the measure was heavily diluted.

The legislation, sponsored by Baltimore Del. Maggie McIntosh, passed 135-3 and was sent to the Senate after she assured lawmakers the bill wouldn’t place any other jurisdiction at a disadvantage.

In its original form, the legislation would have led to an increase in aid for Baltimore City and Anne Arundel and Prince George’s counties, but a decrease for other counties. The bill was amended by the Appropriations Committee, which McIntosh chairs.

McIntosh, a Democrat, said the amended bill would ensure that no jurisdiction would lose state money because of tax-relief agreements made with developers after May 1. Previously, the legislation had applied to deals already in place.

Incentives for developers, such as tax increment financing, add apparent wealth to a jurisdiction’s assessable tax base without increasing actual revenue in the short term. Over the past two years, Baltimore has seen a loss in aid partly because the state’s funding formula assumed large developments would cause the city’s property tax revenue to increase.

McIntosh said it’s impossible to tell how much money the legislation might save for Baltimore because the bill would only affect future development deals. But she said the city has some large ones on the horizon, including significant development at Port Covington.

Over the past year, the increasing wealth formula — along with a decrease in student enrollment — has cost city schools an estimated $24 million in state aid.