There are now two competing proposals to fix America’s aging public school buildings and, coincidentally, give jobs to thousands of construction and maintenance workers. One will work; the other won’t.
The first, the one that would be effective, was proposed by President Obama and introduced by Connecticut Rep. Rosa DeLauro (H.B. 2948) and Ohio Sen. Sherrod Brown (S. 1597). Fix America’s Schools Today! (FAST) is a straightforward federal grant program that would send $25 billion directly to state education agencies and local school districts by formula, accounting for need, and permitting them to hire contractors to make repairs, do deferred maintenance, and make improvements in public K-12 school buildings and facilities. We estimate it could put 250,000 people back to work.
On Oct. 12, Virginia Senators Jim Webb and Mark Warner introduced the second, more complicated yet very limited bill to rehabilitate only the nation’s ‘historic’ schools, The Rehabilitation of Historic Schools Act of 2011. According to their press release, Virginia Gov. Bob McDonnell and U.S. House Majority Leader Eric Cantor also support their proposal.
As my colleague, Jared Bernstein, wrote in his blog last week, it’s good to see bipartisan support for fixing up our public school buildings. And it’s true that, as Jared pointed out, “the first step towards fixing a problem is recognizing the problem and taking responsibility for it.”
Unfortunately, the Webb-Warner Historic Schools Rehabilitation Tax Credit plan is so limited in scope that it would accomplish little in terms of either job creation or school modernization.
Their plan offers developers a federal tax credit to enter into public/private partnerships with states and school districts to help pay for modernization of schools that are on the National Register of Historic Places.
Private partners would have to purchase the historic public school building and then lease it back to the school district. As part of the sale-lease-back agreement they would modernize the historic schools using the incentive of the federal tax credit to reduce the overall cost.
However, unlike FAST, the tax credit program is small, convoluted, and slow. The President proposed rehabbing 35,000 school buildings, but there are fewer than 1,000 public schools on the National Register of Historic places. The policies, approvals, and agreements needed for school districts to enter into developer partnerships (the kind of bureaucratic and legal red tape politicians normally deplore) add a level of complexity that will take time and limit the impact on both school repairs and jobs. And poorer school districts – the ones that need help the most — just won’t be able to make use of a tax credit—they need a grant to make these repairs.
School repair and modernization shouldn’t depend on the desire of developers to secure tax credits. We ought to be simplifying the tax code, not adding to its loopholes. Having recognized both the need to improve our educational infrastructure and a federal role, Webb, Warner and Cantor should join with the president in supporting FAST.
At the very least, even if they’re wedded to using the tax code to fund school modernization, they should expand their vision beyond a few hundred historic buildings. The problems of unemployment and substandard school infrastructure are far too big for such a narrow solution.