Several public school projects around Massachusetts have delayed construction amid the coronavirus pandemic, and the emergency's full financial impact on the Massachusetts School Building Authority (MSBA) remains unclear.
WBUR Radio reports that the MSBA will face some budget strain because of the widespread economic downturn, but MSBA Chief Financial Officer Laura Guadagno believes the agency is well-poised to weather the storm.
"For fiscal year 2020, there should not be too big of an impact because we have a pretty strong cash position," she says. "I think that will carry us through fiscal year 2021.
The MSBA, which helps school systems pay for local and regional capital projects, has a dedicated funding stream from one penny of the state's 6.25 percent sales tax. Through March of fiscal year 2020, Guadagno says, the MSBA had received about $703 million in sales tax revenue, the highest amount over the same span in recent years.
However, March tax revenue figures do not reflect the real effect of non-essential business closures and stay-at-home advisories. April revenues are tumbling, and they will likely remain low in the ensuing months as long as, or potentially even after, the crisis continues.
Economic experts have predicted dire financial outcomes and say tax revenues will plunge by billions of dollars as unemployment soars.
The Massachusetts Taxpayers Foundation estimated sales tax revenues will drop $1.5 billion because of closures in public life and loss of personal income as a result of layoffs and furloughs.
MSBA Executive Director Jack McCarthy says that districts will need to cope with any increased project costs on their own.
"When we set a grant and our reimbursement rate at the time of project approval, we cannot later increase that amount," he says. "So as of right this second, the overages that may result from actions that districts take are going to fall on the districts."
More than two dozen MSBA-backed projects in varying stages of the process have paused active work because of the pandemic, MSBA Capital Planning Director Mary Pichetti says.
