Building for our schools' future
IMAGINE BUILDING a new house and having the state reimburse you up to 90 percent of the total cost. That is the deal that the Commonwealth has offered cities and towns for the past 50 years with regard to school buildings.
With an average reimbursement of about 72 percent, this deal had many takers -- more than 1,100 of the 1,825 schools across the Commonwealth over the past 20 years. The cost of this generosity led to an $11 billion liability to state and local taxpayers. It also forced the governor to impose a moratorium on school building projects in 2003, freezing the program and creating a waitlist of 428 schools.
The state treasurer's office worked for nearly 18 months with the Legislature to craft a fiscally responsible solution, using sales tax revenue to retire the accumulated waitlist in just three½years and lift the moratorium in July 2007. Since our reform was signed by the governor in July 2004, the newly formed Massachusetts School Building Authority has made remarkable progress.
We have reimbursed more than half the projects on the waitlist, to the tune of $1.6 billion. We have accelerated payments to such a degree that we expect to reimburse all completed schools on the waitlist by December -- 18 months ahead of schedule. Quickening the pace of reimbursements has allowed cities and towns to retire an enormous amount of debt. This new approach to funding school buildings has resulted in savings at the local level and we expect to save cities and towns more than $3 billion in interest costs. Many have already seen the benefits of this new program:
Lawrence High School received $90 million in early payments, which will allow the city to move forward on renovations to Veterans Stadium.
In Boston, an early payment of $93 million for three schools will preserve Mayor Thomas M. Menino's AA1 ''Platinum" Bond Rating status.
The early payment of $50.9 million was celebrated by Mayor Michael J. McGlynn of Medford with a ''mortgage burning" ceremony, and the city can now address other budgetary priorities.
The authority has also instituted an accelerated audit program. We inherited more than 600 outstanding audits from the old school building program, administered by the Department of Education. Using private sector practices, we have completed and finalized more audits in one year than the education department had been able to complete over the last five years. In addition to saving taxpayer money, the audits uncovered past abuses of the old system, including improper reimbursements for public works projects, grand opening celebrations, and the purchase of golf carts, trucks, and athletic equipment.
We are now being pressured by some mayors to change the rules that govern this authority. This pressure comes despite the fact that we have already adjusted all of the waitlisted projects upward to $1.4 billion since July 2004 to address the costs of construction inflation.
The choice is simple. More money granted to the projects on the waitlist will result in a funding reduction for communities that have been waiting for the new program. Communities such as Danvers, Belmont, Beverly, Natick, Wayland, Norwood, Hanover, and Plymouth should not be forced to wait any longer. We made a promise to lift the moratorium in 2007 and commit up to $500 million, in the first year, to fix the schools. It is a promise that I intend to keep.
The Department of Education did not promise a blank check for projects on the waitlist. Neither will we. For the most part, elected officials have lived within these rules and brought their schools in on budget. Those who refuse to reign in their projects will find a firm hand in the treasurer's office.
Massachusetts ran up a bill of $11 billion by promising funds to schools across the state without a plan for repayment. This cannot be allowed to happen again. I remain committed to reimbursing cities and towns for schools approved by the Department of Education up to their maximum allowable costs. I also look forward to bringing a new and financially sustainable school building program to our Commonwealth in July 2007. Our job is to fund school construction in a fair and equitable manner based on objective criteria. Our students, teachers, and taxpayers deserve nothing less.
Timothy P. Cahill is treasurer of Massachusetts and chairman of the Massachusetts School Building Authority. 
