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Vt. Targets Generous School-Construction Program

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Vermont lawmakers are moving to scale back an ambitious school-construction-aid program that they say the state can no longer afford.

The Senate passed legislation this month that would repeal the construction-aid law and allow lawmakers to draft a new, less costly statute. House action on a similar measure is expected soon.

A fast legislative rewrite is needed because of looming shortfalls in the program, the repeal's backers said.

State school-construction money appropriated last year ran out in January, roughly halfway into the fiscal year, according to state education officials.

As a result, more than $10 million in projects lack funding, a figure that could triple by next year, said Sen. Jeb Spaulding, the chairman of the Senate education committee.

Guaranteed Funding

The repeal--which would take effect in March 1996--would give the legislature almost a year to come up with an alternative funding scheme.

Whatever plan is approved, Mr. Spaulding said, the bottom line will be a rollback of state investment in school infrastructure.

"We can't afford it the way we're doing it now," he said.

Vermont's unusual school-construction law guarantees state funding for any approved project. The state education agency essentially approves any project a district can show is needed, as long as local voters approve the financing of the district's portion of the expenditure.

The state picks up 30 percent to 50 percent of school-construction costs, with districts paying the remainder of the bills from the proceeds of their own bond issues. The state also pays up to 70 percent of the district's debt service on the bond, depending on the district's wealth.

Few states pay such a sizable chunk of their districts' school-construction costs. Indeed, Vermont is one of only a few states that issue bonds for school construction, said Faith E. Crampton, an education-finance specialist at the National Conference of State Legislatures.

"The majority of the states put the onus on local districts to issue bonds," she said.

The Vermont shortfalls arose in recent years due to reductions in the state's bonding authority coupled with a boom in school construction. Schools were entitled to funding under the law, but the state lacked the financial capacity to issue enough bonds to meet the need.

Some lawmakers hailed the coming repeal, comparing it to the bold move made by Michigan's legislature in 1993 when lawmakers abolished the use of property taxes for school financing to force radical change in the state's school-funding system. (See Education Week, 1/12/94.)

Mr. Spaulding downplayed that comparison, however, saying that the current law would probably be extended if an alternative was not ready next year.

One possible move to ease the cash crunch would be to reduce the portion of debt-service expenses that the state will cover for districts, Senator Spaulding said.

Belt Tightening

"If the state pays 30 percent of the construction costs and 70 percent of the debt service," he said, "that's a hell of a deal."

Mr. Spaulding also said the state may take measures to prevent extravagant spending. Anecdotal reports suggest that architects have persuaded some schools to opt for such expensive items as copper roofs.

John A. Nelson, the executive director of the Vermont School Boards Association, dismissed such reports.

"We are not building palaces here," he said.

Any new school-construction law probably will ask the state's wealthier districts to pay more of their own costs, Mr. Nelson predicted.

"Does it make sense," he said, "to give 30 percent to the district that could raise that without blinking an eye?"

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