School Facilities Funding in the Student Loan Bill

Much has been said about the recent student loan bill authored by Congressman George Miller (D-CA). The bill makes some major changes to the existing federal student loan program and provides significant funds for early learning programs. But little has been said about the $5.0 billion the bill provides for modernization, renovation and repair of public school facilities including early learning facilities.

The bill provides school facilities funding through two separate pots. One funding pot, $2.5 billion in both 2010 and 2011, will be distributed to states based on their share of total Title I funding (after reserving 7 percent of funds for outlying and disaster areas). States will then distribute those funds – minus a 1 percent set-aside for administration – directly to local education agencies (LEAs) based on their share of total state Title I funds.

The second pot consists of an additional $35 million in both 2010 and 2011 for LEAs in Louisiana, Mississippi, and Alabama to address damage incurred during Hurricanes Katrina and Rita. These funds will be distributed based on each LEA’s share of the total cost of damage to public school infrastructure.

In both cases, funds can be used to support any repairs, replacements, and modifications necessary to ensure that facilities are safe, healthy, high-performing, and technologically up-to-date. This can include installation of new roofs and heating systems, improvements to energy efficiency and noise insulation, compliance with fire, health, and disabled access requirements, and other modernizations that can improve instruction and the learning environment. The legislation notes, however, that priority should be given to projects that involve abatement and removal of asbestos and other proven carcinogens.

Funds cannot be used to pay for maintenance costs, improvements to facilities that are used for athletic events that generate income or are for non-instructional purposes, or for the purchase of carbon offsets. Additionally, the funds must be used to supplement, not supplant state and local funds that otherwise would have been used for facilities improvements and cannot affect the amount of state funds an LEA receives.

The bill also sets out two very specific requirements for the funds. The first is a maintenance of effort (MOE) provision which states that in order to receive the funds, each LEA must have maintained education spending (total or per pupil) in the previous year at no less than 90 percent of the second previous year’s level. For example, if an LEA spent $10,000 per pupil in 2008, it must have spent at least $9,000 per pupil in 2009 to receive funds in 2010. If an LEA fails to maintain these spending levels, their allocation of funds will be reduced by the proportion by which they did not meet the MOE provision.

The second requirement states that each LEA must spend 50 percent of funds allocated in 2010 and 75 percent of funds allocated in 2011 on green building efforts. In order to qualify as “green” any funded efforts must comply with standard sets out by the LEED Green Building Rating System; Energy Star; the CHPS Criteria; Green Globes; or another state-identified program.

LEAs that receive funds must also ensure that charter schools within their jurisdiction receive funds in accordance with their facility needs, complete detailed reporting requirements, ensure that all materials are American-made, and provide employment opportunities to participants in YouthBuild, the Job Corps, and local community college construction programs.

This legislation represents the largest up-front federal investment in public school facilities. But it is plagued by one flaw that could threaten its effectiveness in the long run: the funds will be distributed to LEAs through federal Title I formulas. As we’ve discussed before, Title I formulas often fail to provide the greatest benefit to those LEAs with the most need. Similarly, the Title I formulas do not take into account actual need for facilities improvements. Instead, they distribute funds based on four complicated and seemingly-random calculations based on factors including student poverty rates and population levels that are the result of years of political bargaining.

$5.0 billion over two years is not an insignificant amount of money. It seems like Congress could devise a more appropriate method, which takes into account actual need for facilities improvements, by which to distribute these funds.