Higher Education
Fiscal 2004 Capital Budget Overview
Department of Legislative Services
Office of Policy Analysis
Annapolis, Maryland
February 2003
For further information contact: M. Kathleen Gardiner Phone: (410) 946-5530
1
Higher Education
Fiscal 2004 Capital Budget Overview
The fiscal 2004 capital program for all segments of higher education is $294.7 million,
including $48.2 million in general obligation (GO) bonds to replace previously authorized
general fund PAYGO that was reverted in prior years due to general fund shortfalls. As shown
in Exhibit 1, the program includes $261.6 million in GO bonds and $33.1 million in academic
revenue bonds (ARB). Exhibit 1 also shows the fiscal 2003 capital program and planned
authorizations over the next four years according to the Capital Improvement Program (CIP).
Exhibit 1
Capital Funding
Authorized and Proposed
Fiscal 2003 through 2008
($ in Thousands)
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
2003 2004 2005 2006 2007 2008
PAYGO Replacement $15,338
ARB Replacement $10,100
ARB New $30,290 $33,085 $57,100 $31,400 $48,515 $25,000
GO Replacement $190,101 $48,216
GO New $83,790 $213,410 $218,150 $165,450 $218,050 $200,300
Source: 2002 Joint Chairmen’s Report and Maryland State Budget, Fiscal 2004
2
Higher Education - Fiscal 2004 Capital Budget Overview
The types of projects included in the 2004 capital program are planning, land acquisition,
new construction, renovation, equipment, facilities renewal, infrastructure improvements, and
grants to community colleges. Exhibit 2 shows the distribution of funding by type of project.
Exhibit 2
Projects by Type
Fiscal 2004
($ in Thousands)
Construction
$187,958
Renovation
$1,000
Equipment
$10,805
Facilities Renewal
$12,900
Infrastructure Improvements
$20,803
Land Acquisition
$8,000
Community College Grants
Planning
$40,850
$12,395
Note: Includes $48.2 million to restore funding for projects originally funded with general funds in previous
fiscal years.
Source: Maryland State Budget, Fiscal 2004
The fiscal 2004 capital budget bill, HB 140/SB 146, authorizes general obligation bonds,
including $261.6 million for all sectors of higher education. Academic revenue bonds are
authorized separately for the University System of Maryland by HB 968. Exhibit 3 shows the
distribution of the higher education capital program by type of institution.
3
Higher Education - Fiscal 2004 Capital Budget Overview
Exhibit 3
Capital Funding by Type of Institution
Fiscal 2004
$294,711,000
Balto. City CC Independents
5% Univ. System of Maryland - ARB
0% 11%
Community Colleges
14%
Regional Centers
0%
St. Mary’s College
2%
Morgan State
21%
Univ. System of Maryland - GO
47%
Note: Includes $48.2 million to restore funding for projects originally funded with general funds in previous
fiscal years.
Source: Maryland State Budget, fiscal 2004
In response to the State’s Partnership Agreement with the Office for Civil Rights (OCR), the
State has made a commitment to authorize an additional $75 million in academic revenue bonds
in fiscal 2003 through 2007. The additional $75 million in available funds would support
projects to enhance the facilities and infrastructure of the four public historically black
institutions (HBIs), especially Coppin State College. Given the fiscal 2004 CIP, the State
appears to meet its commitment.
The fiscal 2002 CIP was the last CIP developed prior to the OCR agreement signing in
December 2000. For the five-year period 2002 to 2006, the 2002 CIP allocated to the HBIs 21%
of all capital support, including $12.0 million in ARBs. In contrast, for the five-year period from
fiscal 2003 to 2007, the HBIs are authorized and scheduled to receive 35% of all capital support,
4
Higher Education - Fiscal 2004 Capital Budget Overview
including $75.4 million in ARBs. While the full $75 million associated with the OCR agreement
is allocated to the HBIs, their share of GO support grows slightly from 33% of GO bonds for
four-year institutions to 34%. Exhibit 4 illustrates the change in the capital program from the
2002 CIP to the present.
The decline in the total capital program for traditionally white institutions (TWIs) and all
institutions is the elimination of planned PAYGO projects. The elimination of PAYGO projects
had little affect on the HBIs, as the 2002 CIP included less than $2 million in PAYGO for them
in fiscal 2003 through 2007, compared to $138.9 million for the TWIs.
Exhibit 4
Capital Program for Higher Education
($ in Thousands)
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
ARB GO Total ARB GO Total ARB GO Total
HBIs TWIs All Institutions
2002 2004
Notes:
Data includes the University System of Maryland, Morgan State University, and St. Mary’s College of Maryland.
2002 = Fiscal 2002 through 2006, as planned in the Fiscal 2002 Capital Improvement Plan
2004 = Fiscal 2003 through 2007, including fiscal 2003 actual authorizations and fiscal 2004-2007 as planned in the
Fiscal 2004 Capital Improvement Plan. 2003 actual authorizations do not include GO bond replacement of
previously authorized but reverted PAYGO projects.
Sources: Maryland State Budget, fiscal 2002; 2002 Joint Chairmen’s Report; and Maryland State Budget,
fiscal 2004.
5