Aid for Facilities
Jun 1, 2009 12:00 PM, By Mike Kennedy (mkennedy@asumag.com)
Economic stimulus funds from the federal government provide numerous avenues for schools and universities to improve facilities.
Build America Bonds also will benefit South Dakota State University, Brookings, with a student union expansion. Photo courtesy of Eric Landwehr
Even before the state fire marshal ordered the Somersworth (N.H.) School District in 2007 to abandon the top two floors of Hilltop Elementary School because of safety concerns, folks in the city of 12,000 had been debating whether the aging facility should be replaced — and how to pay for it.
Finally, in February 2009, despite the grumblings from residents who thought Somersworth couldn't afford it, the city council approved plans to issue $19.9 million in bonds to pay for construction of a new 450-student elementary school.
Three months later, the price tag became a little easier to swallow when the New Hampshire School Building Authority awarded Somersworth $19.9 million in zero-interest Qualified School Construction Bonds, part of the federal government economic stimulus package.
Somersworth is one of many communities whose schools and universities stand to benefit from the stimulus — formally known as The American Recovery and Reinvestment Act of 2009 — that Congress approved to help the U.S. economy regain its health.
"It's going to save us $12 million to $15 million over the life of the bonds," says Karen Soule, superintendent of School Administrative Unit 56, which includes the Somersworth district.
Many avenues to aid
Preliminary versions of the economic stimulus legislation in Congress proposed allocating billions of dollars to pay for school facility upgrades — a version passed by the House called for $16 billion in school construction funding. But after House and Senate negotiators got together to work out differences and craft the final bill, that provision was eliminated from the $787 billion package.
Still, the recovery effort offers schools and universities various subsidies, grants, tax credits and other incentives to alleviate the cost of modernizing and constructing facilities.
Among those:
- State Fiscal Stabilization Fund
The U.S. Education Department describes this as a one-time appropriation of about $48.6 billion that the department will award to governors to help minimize and avoid reductions in education and other essential services. In return, a state must commit to pursuing four areas of education reform: making improvements in teacher effectiveness and in the equitable distribution of qualified teachers; establishing pre-K-to-college-and-career data systems that track progress and foster continuous improvement; making progress toward rigorous college- and career-ready standards and high-quality assessments; and providing targeted, intensive support and effective interventions for the lowest-performing schools.
School systems can use the funds for facility improvements, but the department is discouraging use of the funds for new construction (see the "Yes, you may — but maybe you shouldn't" sidebar).
- Qualified School Construction Bonds
The program provides $22 billion of bond authority ($11 billion in 2009 and $11 billion in 2010 for states and school systems. The legislation calls for 40 percent of the authority to go to the nation's 100 largest districts, plus 25 additional systems that the education department determines to be in need. The remaining 60 percent will go to states, using a formula that is based on Title I funding for disadvantaged students. School systems that issue the bonds pay no interest — they repay only the principal.
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