Facility Financing Comes to the Forefront (2/15/2008)

On Wednesday, the House Committee on Education and Labor held a two-panel hearing on school facility financing, entitled “Modern Public School Facilities: Investing in the Future.” The first panel comprised of Members of Congress who have introduced school facility legislation or are involved with the issue. The second comprised of
school facility practitioners and policy experts.

In panel one, eight members of Congress testified on either the importance of the federal role in school facility matters or the inappropriateness of federal involvement. Predictably, the matter fell along party lines. Indicative of those in favor of an expanded federal role, Representative Bob Etheridge (D-NC), a former Superintendent of North Carolina’s public schools, discussed his bill, H.R. 2470, the America’s Better Classrooms Act.

He made the point that inadequate school facilities are not a function of improper management or lackluster efforts. The problem stems from an explosive demand on facilities that outpaces the efforts to keep with the demands. “School officials are striving to provide first class educational opportunities with infrastructure that has not kept up with the times,” said Etheridge. “Simply put, our schools are busting at the seams.”

The Republican testimonies reflected concerns over the fiscal implications of further expansion of the federal role in education. The opportunity cost concerned Representative Mike Castle (R-DE) most. He observed that the federal government has not met many of its current funding obligations, such as fully funding No Child Left Behind, the Individuals with Disabilities Act, and meeting various other requirements imposed by the Environmental Protection Agency. Taking on yet another commitment may not be feasible, he testified. But the concerns over inflated construction costs overshadowed the polite opportunity costs argument.

Republicans spent significant time on the impact of the Davis-Bacon law upon construction costs. The Davis-Bacon mandate applies to any bill that receives federal dollars for construction or renovation. It requires that all laborers and mechanics employed by contractors or subcontractors on all construction and minor remodeling projects to be paid local prevailing wages as determined by the Secretary of Labor. The calculation of the prevailing wage, however, is a matter of debate.

As explained by Representative Steve King (R-IA), the law artificially increases labor costs up to 22% and overall construction costs up to 9%. Because of this increased cost, the Republicans panelists made it clear that they would reject any legislation that would force the Davis-Bacon mandate on school construction and re-modeling. The heated discussion on this debate made it clear that the future of any facility finance bill in Congress this year will turn on its interface with the Davis-Bacon requirements.

The second panel provided the Committee with a practitioner’s view of the federal role in school facility financing. Six panelists informed the Committee about their work in the field and how the federal government has supported their work.
For example, Kathleen Moore, the Director of the School Facilities Planning Division of the California Department of Education, discussed the impact of facilities on student achievement and teacher retention, California’s school facilities needs and successful federal facility programs and the need for continued and expanded federal assistance.

Notably, Moore discussed two federal programs that have helped California: the Qualified Zone Academy Bond (QZAB) program and the Federal Renovation Program. Both, she testified, are models for federal involvement. The QZAB program is a strong model for providing tax credits that allow LEAs the benefit of interest free financing on bonds and the Federal Renovation Program is a good model of a grant that targets urgent repair and renovation.

“The physical condition of school facilities impact student achievement and experience as well as teacher retention and community vitality,” testified Moore. “A quality school facility is but one component necessary for successful learning. Alone it is no silver bullet, but together with rigorous standards, qualified teachers and system accountability, it can positively impact educational outcomes.”

The hearing made two things clear. First, the current role in federal facility financing has been critical for many schools and districts. Second, the expansion of the federal role is possible in this session of Congress, but they must resolve the partisan split if any new bills hope to move forward before the elections in November.

Resources:
School facility bills before Congress.
H.R. 3021, the 21st Century High-Performing Public School Facilities Act, introduced by Representative Ben Chandler (D-KY);
H.R. 3902, Public School Repair and Renovation Act, introduced by Congressman David Loebsack’s (D-IA);
H.R. 3197, the School Building Enhancement Act, authored by Representative Rush Holt (D-NJ);
H.R. 2470, the American’s Better Classrooms Act (ABC), sponsored by House Ways and Means Committee Chair Charlie Rangel (D-NY).
Author: DAD