School Construction Money Slashed By $267 Million; Charters and Universities Affected
FlaglerLive | October 4, 2011
Citing insufficient tax revenue and previous debt, economists on Monday said the state will have no money available to sell new bonds for school construction next year.
A panel of state economists, meeting to tweak estimates made earlier this year, slashed estimates for available school construction money by $267 million for 2012, leaving educators with about $113 million in new cash available for building for the fiscal year that begins July 1.
Bonding, which is typically used to construct new buildings and renovate older ones, is not an option for the upcoming year.
The following year is even worse, the revenue estimating conference predicted. Projections for the 2013 fiscal year were reduced by $410 million, a 45-percent cut from the estimates made after the legislative session earlier this year.
State bond finance officials are scheduled to sell $150 million in Public Education Capital Outlay, or PECO, bonds in November from a 2010 authorization. Another $100 million is slated to be sold in February, but Amy Baker, coordinator of the Legislature’s Office of Economic and Demographic Research, said the second sale may not go forward if the amount of outstanding debt exceeds the state’s ability to make payments.
“At this point, the November sale looks good,” Baker said. “The second one is going to have a real struggle to meet the bond test. It is a straight forward calculation. Either you meet it or you don’t.”
The change won’t affect traditional Flagler County public schools, which no longer receive PECO money, but it may affect charter schools, toward whom the state is directing significant amounts of construction dollars.
“We didn’t get any last year or the year before. I think we went from $32 million in 2005-06 to zero,” Tom Tant, Flagler schools’ finance director, said. The Legislature, he said, eliminated traditional public schools from the PECO pool.
At tonight’s meeting, the school board is expected to approve an application from Imagine School at Town center, one of the district’s three charter schools, for PECO dollars. Imagine almost doubled in size over the summer, raising its enrollment to close to 900–and draining about 400 students from traditional public schools. Imagine isn’t yet applying for an actual amount. But it may be eligible for a significant amount.
Tant asked William Fontaine, an official with the Florida Department of Education’s facilities division, what charter schools’ capital allocations would be for the coming year, based on enrollment. Fontaine said each elementary school student would command $402, each middle school student would command $459, and each high school student, $607. Imagine’s students are mostly in elementary school. By that calculation, it would be eligible for roughly $350,000.
It’s not yet clear whether, or how, the state’s new calculations on available PECO dollars would affect those allocations.
Flagler’s two other charter schools–Heritage Academy and Palm Harbor–are not eligible for PECO dollars this year. Palm Harbor isn’t eligible because it hasn’t been in operation for three years yet. Heritage isn’t eligible because it did not get a satisfactory grade on FCAT testing (the school got an F).
Statewide, the drop in PECO fund will more significantly affect colleges and universities. State university system officials said this means going to a bare-bones wish list of mainly repair and maintenance, such as leaky roofs and faulty plumbing, over shiny new classrooms or laboratory space.
Economists say the school building program, which is funded largely through collection of utility taxes, is being hit by a double whammy. Tough economic times have taken many customers off the electricity grid. Shuttered businesses, languid manufacturing and vacant homes don’t generate tax revenue.
But the building fund is also being affected by longer term trends as consumers responding to high energy costs by purchasing energy efficient appliances and changing habits that reduce consumption, factors that have prompted state economists to roll back projections for the foreseeable future.
“It’s intensified right now because of the economy, but there is a general trend too,” said Baker. “Habits are changing. People who buy a different kind of light bulb will continue to buy a different kind of light bulb.”
The magnitude of the change in the forecast took some key lawmakers by surprise Monday. Sen. Evelyn Lynn, R-Ormond Beach, and chairwoman of the Senate higher education budget subcommittee, said lawmakers were anticipating a downward projection, but Monday’s cut surpassed their expectations.
“Enrollment has been declining, that is a help in a way,” Lynn said. “But we have class size requirements we have to meet so K-12 needs rooms. You always have renovation. It’s going to be very difficult.”
State university officials said the recent dramatic drop in building money is unprecedented. Given the bleak forecast, universities are not likely to get anywhere near the full $145 million requested last month for classroom construction, renovation and repairs.
“It is something we have taken for granted,” said Chris Kinsley, the director of finance and facilities for the State University System. “Now we are saying, ‘What do we do about it?’”
For years, universities have watched with concern the amount of money available for classroom construction dwindle. This year, universities and colleges faced another obstacle in the form of Gov. Rick Scott, who vetoed $164 million in construction projects for these schools. That left $57 million for universities, enough to mostly fund repairs and maintenance, with very little left for new construction.
The ongoing PECO drought has caused many universities and colleges to scramble to find enough classrooms for their growing student bodies. This means more students are taking night classes, online classes, and using portable classrooms to make up for the lack of classroom space.
At the University of Central Florida, Monday’s forecast could mean the university may have to put on ice – again – plans to build a $24 million new classroom building. UCF Vice President for University Relations Daniel Holsenbeck said the classroom building is badly needed and the Legislature had already given the school $16 million for the project. Design plans have been drawn up, but hammers won’t start swinging until the entire project is funded, he said.
“It could delay that project again,” Holsenbeck said. “It could delay two very important renovation projects that have been on our wish list for quite awhile. It would most certainly delay the research incubator building.” That $45.7 million project has also already received $6 million from the Legislature.
More than new classroom construction, university officials fret over what this means just for basic repairs. Already, universities say the deferred maintenance on many creaky, older buildings is growing and it is only a matter of time before more serious and expensive repairs are needed.
“It really hurts drastically in the sense that we can’t do things for the immediate upkeep and safety of the building,” Holsenbeck said.
–FlaglerLive and The News Service of Florida