GOP Weighs In With Proposals On Construction

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With members of Congress from both parties lining up behind various proposals on aid for school construction, the big question this year may not be whether, but how, the federal government will tread into this new territory.

In addition to President Clinton's $3.7 billion, five-year construction and renovation measure, which he has promoted and slightly expanded in the three most recent Department of Education budget proposals, several Republican and Democratic plans are now being floated in Congress. Among them is a $1.4 billion approach by House Ways and Means Chairman Bill Archer, R-Texas, that would amend the tax code to cut costs associated with issuing school bonds for districts and states.

Already, congressional lawmakers have introduced 11 legislative initiatives on the issue. And while such plans have failed in the past, Democrats and education groups--traditionally the strongest boosters of construction aid--believe this is the year that at least one school construction bill will finally pass. Such an outcome would build on the White House's successes in lobbying for funding for new teachers and other school initiatives in the past three years.

"The next issue in line is school modernization," predicted Daniel E. Katz, an aide to Democrats on the Senate Budget Committee.

"The fact that there are so many bills being dropped in on both sides of the aisle means people are recognizing there is a severe need out there," added Jeff Simering, the legislative director for the Washington-based Council of the Great City Schools, a coalition of urban districts that has strongly advocated school construction relief.

The legislative activity represents something of a concession for Republicans, who in past years have declared school construction a strictly state and local issue and blocked legislation on the matter. In 1994, even the White House was only lukewarm on financing a plan sponsored by then-Sen. Carol Moseley-Braun, an Illinois Democrat who lost her bid for re-election last year. Today, Ms. Moseley-Braun serves as a special adviser on school construction for the Department of Education's office of intergovernmental affairs.

Congressional Democrats have repeatedly pressed the case for aid with the help of local school leaders, who showcased their dilapidated and overcrowded buildings throughout last year's election cycle. And a 1995 report by the General Accounting Office, which showed that one-third of the nation's schools needed a total of $112 billion in repairs, has become a rallying point for supporters.

GOP Tax Plans

Republicans aren't buying in to President Clinton's widely publicized plan just yet, however. Most of the Republican initiatives would tweak the intricate federal tax code to provide indirect help for districts and others hoping to build or renovate schools.

"What you're seeing Republicans do is come around to the idea of tax credits," said Jay Diskey, a spokesman for GOP members of the House Education and the Workforce Committee. Republicans remain opposed to Mr. Clinton's plan because "it sets up more of a direct funding stream," he added.

Rep. Bill Goodling of Pennsylvania, who chairs the Education and the Workforce Committee and had staunchly opposed federal aid for school construction, this year inserted a construction component into the GOP omnibus education bill, HR 2. His plan would allow schools more flexibility to use money from school construction bonds for other projects not necessarily related to building and renovation. It would also ease the paperwork required to comply with federal arbitrage laws, a provision that Mr. Goodling says would decrease districts' administrative costs.

Rep. Archer, a powerful fellow Republican, has offered a similar plan that would loosen restrictions on tax-exempt bonds, allowing the state and local governments that issue the bonds more time to use bond proceeds. The plan would also reduce the amount of money that must be repaid under the arbitrage laws, which regulate the buying and selling of bonds.

"This plan will make it much easier for state and local governments to comply with complicated bonding rules," Mr. Archer said at a hearing on the school construction portions of a larger tax-relief bill last month. "This plan is universal," he said. "It covers the cities, the suburbs, the farms."

Education groups, though, are still lining up behind the Clinton administration's proposal because it offers "more bang for the buck," Mr. Simering said. While the Council of the Great City Schools is not opposing Mr. Archer's plan, some districts cannot glean tax savings from changes related to arbitrage laws, he said. Such a plan, he argued, could also end up hurting taxpayers by draining federal funds without providing significant tax relief.

President Clinton's approach is based on helping states and school districts pay the interest on construction bonds. His fiscal 2000 budget plan would provide federal tax credits over two years to pay the interest on about $25 billion in bonds, giving preference to states and urban districts with the greatest needs.

In fiscal 1998, when Mr. Clinton first proposed the initiative, he asked for one-time, $5 billion funding to pay interest on $20 billion in school construction projects. That total has grown over time as interest rates have decreased. ("President's School Construction Plan Debated," March 19, 1997.)

"It needs to be done," Julie Green, the spokeswoman for Secretary of Education Richard W. Riley, said of federal aid for school construction. "Given that Republicans acknowledge that this is an important issue, we are certainly hopeful that we can work together this year."

Republicans and others, however, worry that the president's plan would not only create a new level of federal bureaucracy, but also that it could make state and local governments even less inclined to budget money for school construction. "Direct funding could shut down the public interest and will to fund schools at the local level," Mr. Diskey argued.

Meanwhile, a research paper released last month by 3D/International, a Houston-based engineering firm that designs and builds schools, confirmed what many school officials already know: Many districts have exacerbated their problems by putting off routine repairs, resulting in additional and more expensive problems to fix. The problems took root in the late 1960s, the firm reports, when districts began building facilities with cheap, shoddy materials.

Think Tank Perspective

Even the conservative Heritage Foundation, which generally opposes federal involvement in school construction funding, is trumpeting a plan by Sen. Bob Graham, D-Fla., that would endorse public-private partnerships for school construction.

Mr. Graham's bill, S 526, would encourage such partnerships by giving tax incentives to private developers, who would agree to build public schools and provide equipment such as computers, desks, and blackboards, and then to lease the facilities to districts for 20-year terms. The developers could further profit by renting the facilities to other groups, such as churches and civic organizations, after school hours.

"It's the best plan that's before Congress," said Ronald D. Utt, the Washington think tank's Grover M. Hermann fellow in federal budgetary affairs. "It stays within the existing form of federal support, but allows for more creative arrangements with private developers."

The Graham plan would work particularly well in high-growth, new suburban areas because those areas are often populated by homeowners with young children, and development does not keep pace with the number of houses being built, Mr. Utt said.

Despite pleas from many school administrators and state officials for construction aid, the idea still has opponents, who say the federal government should stay out of school construction.

"There is absolutely no reason for the federal government to be involved in this," said David Boaz, the executive vice president of the libertarian Cato Institute here. "This is a classic example of taxing people at the local level, sending the money to Washington and creating a bureaucracy, then giving back some of the money."

While the Republican proposals should not be discounted, some say Congress will need to pass more than one initiative to effectively begin tackling infrastructure problems in schools.

"This is a massive and complex problem that isn't going to be solved by any one plan," said Andrew Rotherham, the director of the 21st Century Schools project for the Progressive Policy Institute. The think tank is affiliated with the centrist Democratic Leadership Council that Mr. Clinton once chaired. "School districts face a variety of different problems, so it's going to take a variety of solutions," he said.

Vol. 18, Issue 31, Pages 1, 27

Published in Print: April 14, 1999, as GOP Weighs In With Proposals On Construction
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