Paying for the Convention Center

February 05, 1993

The Schaefer administration has come up with a relatively painless and sensible way to finance the much-needed expansion of the Baltimore Convention Center without increasing the state's overall debt load. It demonstrates once again why this proposal is such a winner for the state.

To accommodate the state's $100 million share of the convention center expansion within Annapolis' debt affordability limit of $350 million, officials had to shift a key airport project to another account, seek approval to revamp the way counties float bonds for their highway projects, refinance old transportation bond issues at lower interest rates, and cut some $35 million out of the capital budget submitted by the governor last month.

There are few, if any, losers in this proposal. Paying for the new international terminal at BWI Airport through the Maryland Transportation Authority is similar to how the state built the Seagirt Marine Terminal. Only in this case, all the money for the project will be repaid over seven years through fees on airline passengers who use BWI. Modifying the way counties and the city float highway bonds is a technical change, one that experts say should not cost the subdivisions any money.

Refinancing old transportation bonds makes sense because it will save taxpayer dollars. And the $35 million cut from the capital budget will consist of projects that aren't going to be fully ready for construction in the next fiscal year, or projects that can be postponed a few months.

All these steps will leave room in the state's debt package for the convention center expansion, a move that should pay off handsomely. Just the direct state tax revenue from the added trade shows expected to fill the new convention space should easily cover all the state's bond payments, with an extra $2 million to spare each year. And that's not even taking into account the millions more in indirect tax benefits flowing into state coffers from the surge of convention business.

A bigger convention center is a necessity. It is an economic development stimulant, one that could spur construction of a huge convention hotel and a first-in-the-nation medical trade mart. Without this extra space, other cities in the region will continue to steal convention business from Baltimore.

The legislature cannot allow that to happen. It would lead to a decline in state tax revenues from fewer trade shows and less hotel and restaurant business in the Baltimore region. Expanding the convention center should be a legislative priority.

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