In The News › School Fund Source Scrutinized

Oct 28, 2008

Source: New Orleans CityBusiness

Filed under: Orleans Parish, Schools

School Fund Source Scrutinized

$1.2 billion school plan fund source scrutinized
by Stephen Maloney

When Recovery School District superintendent Paul Vallas looks 15 years into the future, he sees fully renovated 21st century schools available to every student in Orleans Parish. But it will take the largest construction project in city history for that vision to become reality.

The $1.2 billion School Facilities Master Plan for Orleans Parish maps out the long and winding road leading to Vallas’ lofty goal, but how that plan will be funded has become a point of contention within the education community.

Broken down into six sections, the master plan calls for an initial investment estimated to top $700 million for phase one of school construction. Phase two will require about $400 million, and the remaining four phases will carry a cost expected to top $100 million.

Every cent of phase one’s price tag will come from a combination of Federal Emergency Management Agency rebuilding funds and Community Development Block Grants, Vallas said, but education and government watchdogs are raising concerns about the lack of funding for latter portions of the plan, which they say could lead to unfinished schools at an enormous local expense.

“The problem is if you spend, for example, $53 million on a high school right now, you may not have the money to do another school later,” Bureau of Governmental Research President Janet Howard said. “It’s a question of whether you’re using your resources judiciously and fairly. Right now we have a lot of questions about that.”

Tara O’Neill, a policy analyst for the Cowen Institute for Public Education Initiatives, said the plan is also vague when it comes to accounting for construction expenditures, which she said are higher than the national average.

“What we have asked is that somebody look at those construction figures in detail,” O’Neill said. “We would like to see the prices discussed in concrete terms rather than somebody just estimating the cost of construction.”

Cost estimates have been done for every single building, Vallas said, but final prices can’t be determined since the majority of the projects are years from beginning and too many variables exist for an accurate prediction.

Lingering damage from Hurricane Katrina and higher building costs in a storm-prone region, coupled with the massive scale of the master plan, account for the higher than average cost of construction, he said.

Nearly 40 percent of New Orleans public school buildings will receive complete overhauls during phase one, placing more than 16,000 of the city’s approximately 35,000 elementary and high school students in state-of-the-art classrooms by 2012, Vallas said.

“Phase one of the plan represents the largest school construction program in the city’s history,” he said. “When it is complete, we will be out of all the modular campuses, half the students will be in ultra-modern schools, 100 percent will be modern classrooms. There will not be a child that lives farther than half a mile from an elementary school, and there will be more high school choices available to children than ever before. That will be quite an accomplishment.”

An even greater accomplishment comes in the form of the federal government picking up the entire tab for the first phase, he said.

Howard said the absence of secured funding sources for the final phases of the plan will lead to drastically higher local and state taxes as the plan progresses, but Vallas said several factors will come into play before the plan comes to fruition that will help ease the burden on taxpayers.

The Orleans Parish School Board currently has a debt burden of nearly $450 million that Howard says, if combined with the master plan costs, would require the current school board property tax rate to be doubled.

“But by the time you get into phases three and four of the capital plan, the existing debt of the Orleans Parish School Board is going to be close to being retired,” Vallas said. “So there might be some options there to issue some school construction bonds there and not have to raise taxes.”

Stretching the plan over 15 years will be the key to keeping local tax contributions small, Vallas said, noting that the historical lack of local construction funds in New Orleans led to about $1 billion of deferred maintenance costs now plaguing local schools.

“Louisiana is one of the few states not to provide any money for school construction, and the city provides no money for school construction,” he said. “At some point in the next 10 years, the city and the state are going to have to play a role in funding school construction and repairs in the city and across the state.”•

Oct 28, 2008

Source: New Orleans CityBusiness

Filed under: Orleans Parish, Schools

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