Funding School Capital
Improvements:
A National Perspective
Presentation to the Oregon School Capital Improvement Planning Task Force
John Myers & Mark Fermanich, APA Consulting
Portland, Oregon
May 13, 2014
APA Background
 APA is a Denver-based consulting firm, founded
in 1983, that works primarily with state-level
policymakers on education finance and
governance issues.
 APA has worked extensively with states on the
procedures used to allocate state aid to districts
and schools.
 APA has worked for the Oregon Legislature:
1991 and 2000.
APA Experience
 School finance equity & adequacy
 State work on facility funding
 ECS look at state capital funding formulas
 Survey of school district facility needs
 Bi-partisan work for policymakers
Presenters’ Experience
 John
 Former Legislator and NCSL Education Program
Director
 Consultant to the National Board for Professional
Teaching Standards
 Helped create the National Association of
Charter School Authorizers
 37 years of school finance formula work
 Mark
 Former legislative and school district staff
 School finance researcher
 University faculty member
 29 years of education policy work
School Facilities Formulas
 Flat Grants
 Equalized Funding
 Need based grants
 Basic support
 Full state
 Revolving Funds
APA work on Facilities
 Idaho
 Trends in bond election success
 Arizona
 Analysis of Changes in funding for facilities
 Colorado
 Survey of School District facility needs
 Education Commission of the States
 Review of all State facility funding formulas
Oregon Education Investment Board, 2012
Current Challenges to
Facility Funding
 Local elections
 Equalization
 Governance changes
 Charter Schools
 Virtual and Blended learning
 Age and condition of facilities/deferred maintenance
 Green schools/healthy schools
© Augenblick, Palaich and Associates,
Inc.
 Equal access to facility funding
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The Funding Challenge
maintenance nationwide at $271 billion, or
$4,883 per student
 In state by state estimates, 2008 study estimated
Oregon’s total PK-12 infrastructure needs totaled
$2.5 billion
© Augenblick, Palaich and Associates,
Inc.
 2010 estimate puts value of deferred
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Sources: 21st Century School Fund & AFT
Do Facilities Impact Student
Performance?
general upkeep, lighting, acoustics/mechanical
noise, air quality, and size affect:
 Student performance on assessments
 Student attendance
 Teacher attendance
 Teacher retention
For extensive bibliography see National Clearinghouse for Educational
Facilities:
http://www.ncef.org/pubs/outcomes.pdf
© Augenblick, Palaich and Associates,
Inc.
 Research shows that facility conditions –
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Revenues
 Federal Dollars
 State Dollars
 Equalizing local variation
 Local Taxes
 Uniform contribution
© Augenblick, Palaich and Associates,
Inc.
 Primarily for program specific activities
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Facilities Financing Options in
Oregon

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
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Local General Obligation bonds
Full faith and credit obligations
Local option levies
Construction excise tax
 State Sources:



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State facilities grants
State bond guarantee program
Measure 68 state bonds
SB 1149 funds
© Augenblick, Palaich and Associates,
Inc.
 Local Sources:
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National Examples
 State level funding strategies
California, New Jersey, New York. Some require
districts to have long-term facilities plans
 Dedicated revenue: Arizona FIRST program has
had multiple funding sources
 Portion of 0.6% sales tax, lease to own, pay as go
© Augenblick, Palaich and Associates,
Inc.
 State bond issues: multiple states, including
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National Examples
 Shared funding strategies
example Minnesota
 Maryland Public School Construction program:
State bond funded, requires 20%-50% local
match
 Connecticut: state funding provides matching
grants to cover 20%-80% of project costs
depending on local wealth
© Augenblick, Palaich and Associates,
Inc.
 State equalization aid for debt service levies, for
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National Examples
 Shared funding strategies
approved projects, eligibility based on
enrollment growth, available space and facilities
condition
 Maine: revolving loan fund includes loan
forgiveness for between 30%-50% of project
costs, repayment of balance required within 510 years
 Ohio: Financial Hardship Loan program provides
low cost loans to address critical issues,
repayment within 5-10 years
© Augenblick, Palaich and Associates,
Inc.
 Vermont: state funding for 30% of cost of
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National Examples
 Shared funding strategies
program provides low interest loans to low
wealth districts
 Colorado: BEST program provides matching
facilities grants, funded through multiple source
including public land income, lottery revenues
© Augenblick, Palaich and Associates,
Inc.
 Minnesota: Maximum Effort School Aid
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National Examples
 Other strategies
operating capital, facilities (charters), for
example Minnesota, until recently Colorado
 Multi-jurisdiction shared facilities, publicprivate partnerships
© Augenblick, Palaich and Associates,
Inc.
 Dedicate portion of formula base amount for
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© Augenblick, Palaich and Associates,
Inc.
Questions?
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