State may shorten wait for school project funds
Building new schools has typically been a tough struggle for most communities. First, voters had to be persuaded to pay higher taxes to finance the multimillion projects. Then came another challenge, obtaining state reimbursement funds.
In the past, this has involved obtaining a coveted spot on the Massachusetts Department of Education's waiting list of projects slated to receive reimbursement. But in recent years, the list became backlogged as cities and towns pursued projects at a rapid rate and last year the state had to close the list to new projects. Now, with 420 projects waiting for money, some towns could wait up to 10 years before they see a dime.
That could change, if a plan being touted by Governor Mitt Romney becomes reality. In his proposal, the state would borrow money for school projects over a 40-year term instead of the present 20 years since four decades is the average lifespan of a school building. This would create a savings, which would allow more money into the program, speed up the reimbursement process, and help eliminate the backlog.
But the proposal is hardly a sure thing. It would require state legislative approval and some lawmakers have expressed concerns about taking so long to pay off school bonds, saying that it would pass off financial obligations to future generations. Included in the proposal is a plan to appoint a commission of government officials which would study, over a six-month period, changes to the whole school construction program.
The proposed change would particularly benefit towns on the waiting list that have already completed construction and are waiting for reimbursement. Some communities proceed with construction projects on the assumption that they will eventually receive reimbursement from the state, even if they know the money may be a long time coming. Reimbursement rates range from 50 to 90 percent of the project's total cost.
Woburn is designated to receive about $12.5 million in reimbursement for the White Elementary School, $10.3 million for the Shamrock Elementary School, and $12.2 million for the Clyde Reeves Elementary School.
Joseph Elia, the Woburn district's business manager, said the district was prompted to proceed with construction because of physical problems with the old buildings.
''Once they were put on the list, we had to go out and get the financing to build them because they were in bad condition and had problems that needed to be addressed," said Elia, who explained that the district expects to break ground on a new high school in March. The state is expected to reimburse the city $68.4 million for the project.
Elia said the expedited reimbursement would be welcomed. ''It would be wonderful to get the funds sooner," he said. ''We've been putting a lot of resources into building new schools with the understanding that the state will help us out. It would certainly be reassuring to know that the money is coming sooner, rather than having to wait so long for it."
Westford is waiting to receive a reimbursement of $24.1 million spent to build the Stony Brook Middle School, which opened in September. The town also is waiting to collect a $13.6 million reimbursement for building the John A. Crisafulli Elementary School on Hartford Road. A third School, Rita E. Miller Elementary School, is also on the waiting list for a $14.2 million reimbursement.
Everett Olsen, assistant superintendent of the district , said the town was forced to build the schools without money from the state because of explosive growth. He said the district has averaged 195 new students every year in the district for the past seven years.
''Some communities have become these pockets of tremendous growth," said Olsen. ''Once we knew we were on the list, we moved ahead with construction," he said, adding''A proposal like Governor Romney's would allow us to pay off a large amount of debt sooner."
Jeff Wulfson, an associate commissioner for the state education department who is in charge of school construction, said that, under the present system, many communities on the waiting list have obtained short-term bonds to finance their construction projects with hopes of receiving the reimbursement within, at least, seven years.
Romney's proposal would allow them to pay off their debt immediately, which would permit communities to save money in finance costs. Wulfson said the crushing backlog of 420 projects waiting for reimbursement threatens to prolong the time that towns had to wait for their money. ''Given the current levels of state revenue, the projects at the bottom of the list could anticipate waiting 10 years," he said.
He said the state's move to finance the program over 40 years, instead of 20, would allow it to make lower annual payments. ''The money saved by doing that would create a savings which would be paid to the communities at the rates they're designated to be paid," Wulfson said.
The state's current bill for the 420 projects on the list is about $4 billion, ) according to officials. Moreover, the state owes another $4 billion for more than 700 projects that have begun receiving money. The average reimbursement rate is 70 percent with cities and towns paying the remainder.
Local officials applaud the effect that the Romney proposal would have on their budgets, but Craig Young, director of business and finance for the Groton Dunstable Regional School District, which is also on the waiting list for its middle school projects, said one danger is that the proposal could amount to a short-term fix with long-term ramifications.
''It's a win for the towns," he said, ''but the downside is the burden on the future taxpayers, our kids." 