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Demand Soars for Stimulus-Backed Facilities Bonds

Construction bonding authority—a technical, and often obscure, source of capital funding for school districts—has emerged as a hot ticket for those looking to finance school facilities work under the federal government’s economic-stimulus program.

With little stimulus money expected to be left for construction after states make up for recession-driven budget cuts, districts are scrambling for some $24 billion or more in zero- or low-interest bonds under the $787 billion American Recovery and Reinvestment Act.

“This is a once-in-a-lifetime deal,” said Judy Marks, the associate director of the National Clearinghouse for Educational Facilities, based in Washington. Not only are bonds available, she said, “the cost of construction materials is down, the cost of labor is down, a lot of contractors who would be busy bidding for [office buildings and other projects] are...