Don’t Bet On Bonds for School Facilities

As we have written about before (click here for past coverage), the Recovery School District and the Orleans Parish School Board recently proposed amendments to the School Facilities Master Plan (the plan). The current status of these amendments was discussed during the Board of Elementary and Secondary Education’s (BESE) School Innovation and Turnaround Committee meeting on August 17. District officials informed BESE members about the process that is underway to reconsider the amendments that were originally released in late June. The Superintendent of the Recovery School District, John White said that they intend to adjust the plan so that it is as equitable as possible in terms of the percentage and the demographics of students impacted by the plan.

At the BESE meeting, staff from the Cowen Institute testified about concerns that the plan would leave the 13,200 children under Phase Three of the plan in schools with significant deficiencies. In many cases, these schools’ HVAC systems, roofing, and/or windows require repair or replacement and/or students within the schools are exposed to unsafe environments.

At present, the plan leaves Phase Three unfunded. Fully funding this phase would likely require future bond issues and millage increases. It is unclear how much, if any, funding can be raised through these means, and we do not think the districts should rely on voters approving bond issues (tax increases) to fund Phase Three of the plan. The unfunded portion of the plan is estimated to cost $422 million. The last series of bonds approved by voters for New Orleans schools was in 1995 for $150 million and has not been paid off yet.

The Cowen Institute recommends that the plan be adjusted to require all schools that will serve students in the future to meet certain minimum requirements before the districts continue to build expensive, state-of-the-art schools. This would guarantee a stable learning environment for all public school students in New Orleans and would increase the equitability of the distribution of the $1.6 billion awarded to the districts for construction and renovation by FEMA for disaster reimbursement.

In his testimony before the board, Superintendent White expressed the RSD’s desire for the plan to be equitable and serve as many students as possible. He also indicated that the district is pursuing creative fundraising mechanisms such as New Markets Tax Credits and Historical Tax Credits, which are tax credits for organizations that inject capital into economically weak areas and those that are restoring historical areas, respectively. These types of creative fundraising mechanisms could help pay for Phase Three of the plan, however are unlikely to amount to $422 million. We are encouraged by the direction the Superintendent is taking and hope to see specifics very soon.

Several BESE members expressed support for the principles behind the Cowen Institute’s recommendations and were also pleased with Superintendent White’s presentation. Some BESE members also expressed concern that the plan has not addressed how New Orleans schools will pay for future maintenance and repair costs. With no dedicated, ongoing funding for facilities needs, New Orleans schools, like schools throughout the state, run the risk of deteriorating over time due to deferred maintenance. One possible method of funding maintenance and repairs is through the millages that currently support the bond debt. Once this debt is paid off, voters could renew these millages to continue to ensure that our students attend school in buildings that provide an excellent learning environment.