Does the state’s school building reimbursement formula hurt poor cities and towns?
Updated Posted
A formula created in 2004 to ensure the
state was giving poor cities and towns enough help building new schools
includes a quirk that some say is now hurting the same communities it
was meant to help.
“It perpetuates inequity,” said state Sen. Jo Comerford, D-Northampton, who introduced a bill to change the formula.
The
Massachusetts School Building Authority provides state funding for
school building projects that is matched with money from cities and
towns.
The state covers between 40 percent and
80 percent of eligible construction costs. The size of the state match
is calculated based on a formula that reflects how poor the community is
— so poorer communities get more money.
The
state funding does not cover the full percentage of construction costs
because certain expenses are ineligible for reimbursement, like legal
fees or asbestos removal. There is also a cap on the total amount the
state is willing to pay per square foot, which is virtually always lower
than the actual cost.
So, an 80 percent reimbursement rate generally means that around 62 percent of costs are actually covered.
The
program also allows communities to apply for “incentive points,” which
raise the size of the state match. Districts get points for things like
building energy efficient facilities, regionalizing a school district,
renovating existing buildings or adopting best practices for
maintenance.
But, because the total amount a community gets is
capped at 80 percent, the poorest districts are ineligible for incentive
points.
“If you’re a community of high need,
and you compare to a community that has more means and can go after
incentive points, it becomes a little bit of an economic justice issue,”
said John Nunnari, executive director of the Massachusetts chapter of
the American Institute of Architects.
Nunnari
said the incentive points are designed to help communities adopt
building practices that are advantageous to the community or the state,
but which might be more expensive up front — like building an energy
efficient school. The problem for poorer communities is they are the
least likely to be able to raise additional money for these types of
features, because they do not have the property tax base.
“Because they’re at 80 percent, if they want to do those things, they have to now do it on their own dime,” Nunnari said.
Margaret
Minor Wood, a senior associate with Pinck and Company, is an owner’s
project manager, which means she represents the owner in large public
construction projects. Minor Wood compiled information showing that the
difference between the base reimbursement rate and the percent of a
project’s costs that were actually covered was around 15 percent for all
communities’ high school building projects — but 20 percent for the
poorest communities. There were similar disparities for middle and
elementary school projects.
For example, the new South High Community School in
Worcester was supposed to be reimbursed at 80 percent, but the state
actually covered 55 percent of the costs — a difference of 25 percentage
points. While South High’s total price tag was about $210 million, the
80 percent was calculated on $144 million in costs that were eligible
for reimbursement.
A new regional technical
high school on Cape Cod was eligible for 45 percent reimbursement and
got 33 percent, a difference of 12 percentage points. In that case, the
total project budget was $128 million, and the reimbursement rate was
applied to $93.7 million in eligible costs.
The
chart below shows the difference between the officially listed
reimbursement rates (Base Rate) and the actual percent of costs covered
(Effective Rate) for a number of recent school building projects. While
schools in poor communities receive higher base reimbursement rates,
they are not eligible for incentive points to help pay for best
practices such as energy efficient buildings, which can increase a
project's cost.
Narragansett Elementary School:
Those involved with school building projects say the formula was meant to help poorer districts while protecting taxpayers. But no one envisioned how much the cost of construction would rise, and the extent to which communities would need the extra money from the incentive points.
“It made sense when the legislation was written
that no one would go above 80 percent,” Minor Wood said. But she said
the current situation has resulted in “inequity” and “inequality” that
needs a legislative fix.
Comerford introduced a
bill that would let any school district get additional incentive points,
even if the district already reached the 80 percent level, based on
poverty. She said the current system disadvantages poor communities and
communities with small tax bases that cannot raise more money locally.
That perpetuates inequity, if these communities cannot afford to build
the same quality school buildings as wealthier districts.
“The
bill ensures that schools, no matter what percentage of aid they’re
getting, are eligible for getting incentive points for those better
buildings,” Comerford said.
A spokeswoman for
the treasurer’s office, which oversees the Massachusetts School Building
Authority, did not respond to a request for comment.
Holyoke
is one of the communities at the 80 percent reimbursement level. The
city, which is currently designing a $130 million project to build two
new middle schools, anticipates getting around $78 million from the
state, according to maintenance administrator Whitney Anderson.
Anderson said if the community had been eligible
for incentive points, that could have brought in additional state money.
“Every percentage point on a $100 million project is $1 million, so it
means a lot,” Anderson said.
Anderson said some
project improvements will be made anyway, if they are easy to do. But
designers “might have to make some decisions” if the district can afford
to make other improvements that cost money and are not eligible for
state reimbursement.
Anderson said he thinks
Holyoke should be allowed to get the same incentive points as other
communities, even though it is already getting the larger base amount.
“It’s not so much our fault that we are a poor community,” he said.
Dorrie
Brooks, an architect at Jones Whitsett Architects in Greenfield, said
the poorer communities are most in need of additional money from
incentive points.
“There’s no reason every
school in the state shouldn’t have the same encouragement to be highly
sustainable,” Brooks said. “Communities like Orange, which are at the 80
percent reimbursement rate, won’t be able to put in place those best
practices without it. ... They’ll be able to do it only if they pay for
it themselves.”
Brooks said she worked on a
project in North Adams, which got a 80 percent reimbursement rate, but
could have been eligible for more money if it were allowed to get
incentive points for building an energy efficient building and
renovating an existing building. “Every percentage ends up being
something the community will struggle with when it comes to coming up
with local support for a project,” she said.
Brooks noted that school building projects must be approved by town
taxpayers, and cost can be a deciding factor, particularly for towns
with a small tax base. “That’s when these projects die, when a community
can’t see paying for that debt,” she said.
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