DATE: Wednesday, November 19, 1997          TAG: 9711190015

SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: Opinion 

SOURCE: BY BILL BOLLIN 

                                            LENGTH:  105 lines

STATE MUST PLAY A ROLE IN ADDRESSING EDUCATION FACILITY NEEDS

During this year's campaign for governor, Gov.-elect Jim Gilmore stressed the need to put 4,000 additional teachers in our classrooms at a cost of $200 million. Democrat Donald Beyer stressed the need to raise teacher pay to the national average at a cost of $400 million.

Unfortunately, neither candidate discussed the need for $8.2 billion in school construction projects in the next five years.

A 1996 study by the Commission on Educational Infrastructure revealed that 63 percent of Virginia's public schools are in need of substantial renovation or replacement. Thirty percent of our schools report overcrowding. In addition, 27 percent of Virginia's classrooms are obsolete in terms of today's technological needs. Finally, over the next five years an estimated 13 percent increase in new classrooms will be needed.

Local governments are estimating school construction costs of $4.1 billion in the next five years. However, the Commission on Education Infrastructure study estimated that it will take $6.2 billion to address known school construction needs. It is known from historical experience that local school divisions underreport capital needs by an average of 54 percent. Therefore, the real unmet capital construction need in Virginia's public school divisions could exceed $8.2 billion.

We need to address our public school construction needs. The question is how to do so in a fiscally sound and timely fashion, and who should pay the bill.

Although the commonwealth and local governments share the constitutional responsibility for funding the operation of public schools, historically the responsibility for funding the capital costs has fallen solely on local governments. The commonwealth has attempted to assist local governments with low- interest loans from The Literary Fund and with Virginia Public School Authority bonds.

This year, the total revenue available for low-interest loans to local governments through The Literary Fund will total almost $125 million.

Unfortunately, the Literary Loan Fund suffers from two major problems.

First, revenues in the fund can be borrowed for other purposes. In the early 1990's, most of the more than $100 million in the fund was used for teacher retirement rather than school construction loans. While the vast majority of that borrowing has now stopped, the backlog in projects is significant. Today, The Literary Fund has a priority waiting list of 41 projects totaling more than $114 million.

Second, the fund is limited in its application. Only the most needy school divisions can access the fund, and loans are limited to no more than $5 million, and even more affluent school districts have capital construction needs that must be met.

The Virginia Public School Authority (VPSA) is a bond bank which provided additional low-cost financing of capital projects for public schools. VPSA can help localities secure loans in the open bond market. Interest rates offered through the VPSA are usually better than open-market rates, although they are generally not as favorable as rates offered through The Literary Fund. The VPSA typically issues $150 million in construction bonds each year to Virginia's local school divisions.

Even with these low-interest loans, the ability of many local governments to incur debt is limited. Local governments do not have the financial resources to fund $8.2 billion in capital construction needs. If the commonwealth does not do more, the quality of public education will suffer.

While many state officials do not believe that the commonwealth should participate in the direct funding of local school construction projects, I disagree. The commonwealth must accept joint responsibility for public school capital construction needs.

The commonwealth has helped local governments fund the construction of local and regional jails. We appropriate millions to help local governments upgrade sewage-treatment plants. If the state can help build jails and sewage plants, surely it can play a greater role in school construction projects. The question is: How? The following possibilities must be given serious consideration:

We must stop using revenues in The Literary Fund for any purpose other than low-interest school construction loans. A constitutional amendment to do this died in the Senate Finance Committee. This legislation should be resurrected and approved.

We must expand revenues in The Literary Fund by identifying other dedicated resources. In this way we can make more low-interest construction loans, and potentially larger loans, to more local governments.

The commonwealth should develop a public school construction grant program to fund a designated percentage of approved capital projects. This fund could be established by dedicating 50 percent of all profits from the Virginia Lottery to public school construction needs. This would result in a first-year commitment of $175 million. It would also use unstable lottery revenues for capital projects as opposed to ongoing operating expenses.

We must help local governments raise additional revenue to help fund their share of school construction needs. For the past several years, legislators in many rapidly growing localities have supported the approval of impact fees for local governments. These fees would be assessed against new residential construction, assuring that new residential development, which drives the need for new schools, does more to help pay its own way. Let's approve impact fees for local governments, and require that the income derived from these fees be used for school construction.

Having just completed a statewide election, we all know that politicians love to say that education should be Virginia's No. 1 priority. If we are serious about that commitment, we must confront Virginia's education needs head on. We cannot do so unless we are willing to tackle the difficult issue of public school construction. There's a lot to be done, and the needs grow greater every day. MEMO: Sen. Bill Bolling represents the 4th District in the Virginia

Senate. The 4th District includes the counties of Hanover, Caroline,

Essex, King and Queen William, Mathews, Middlesex, New Kent, Richmond

and parts of Gloucester. KEYWORDS: ANOTHER VIEW

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