Formula for new school bond proposal would benefit each WNC district differently

RALEIGH — Going into this year’s session of the legislature, support was building for a large-scale school bond to help with school construction.

Last week, the resulting proposal for a $1.9 billion bond referendum that would go to the voters in 2018 began to move toward passage in the state House.

It is, as its supporters point out, the first school construction bond in 21 years, and comes after a steady downward drift in the amount of lottery funds available for school capital needs.

Initially, about 40 percent of state lottery funds were designated for school construction, but that share has dropped to 15 percent. A recent analysis of the funds use shows that from 2011 through 2015, 75 percent of the lottery funds for capital needs went to cover debt service on past projects and not new construction.

For Rep. Kevin Corbin, a first-term Republican whose district covers Cherokee, Clay, Graham and Macon counties, the bonds are a necessity even though they will only cover part of the state’s enormous backlog in school construction and repair needs. Corbin is one of the bond legislation’s four primary sponsors and a former Macon County school board and county commission member.

“If we looked at it from a needs standpoint, this thing ought to be between $4 and $5 billion,” Corbin said in a recent interview. “But you have to strike a balance between what the needs are, what the counties can put up themselves and what the voters would find palatable. We felt like keeping it under $2 billion would do all of the above.”

The timing is right, he said, because of low interest rates and voters’ approval last year of bonds for state parks, universities and community colleges.

The key to the proposal, Corbin said, is in how it distributes the funds. The distribution of funds from the state’s last school bond was based on two categories, student population based on the Average Daily Membership of the district and an additional boost for high-growth districts.

The new bill, House Bill 866, adds two new categories, and would send additional funds to low-wealth counties and smaller school districts.

“What happens typically, especial in counties that struggle financially and have a very low tax base, is if they raise taxes a penny it’s not going to generate very much money to go toward school construction,” Corbin said. “This will help them especially in the areas that are renovating schools that have some age on them.”

He said in Macon County, schools built in a round of construction that started in 1998 are starting to show some age and need work.

“We still look at those as the new schools, but the first one opened in 2000,” he said.

Impacts would vary

As an example of how the funding mix varies in WNC, the fast-growing Asheville City Schools would see a boost of $2,387,982 according to its average daily membership (ADM) and an additional $2,681,452 in ADM growth funding.

By comparison, Graham County, which is seeing a decline in its school-age population, would receive $626,459 based on its ADM and another $205,923 because of its status as a low-wealth county. But the biggest payout in the bond would be Graham’s small-county bonus of $11,400,000. In all, seven of the 19 WNC counties — Avery, Clay, Graham, Madison, Mitchell, Polk and Swain — would receive the $11.4 million proposed for the state’s small counties.

Nine WNC counties — Burke, Cherokee, Graham, Madison, McDowell, Mitchell, Rutherford, Swain and Yancey — are classified economically by the state as Tier 1 counties and are eligible for the additional pool of funds set aside for low-wealth counties. Along with the additional funds, the Tier 1 counties are exempt from the requirement for a dollar-for-dollar match.

Clay and Jackson counties and Asheville City Schools qualify for funds set aside for high-growth districts.

Cautious reactions

The proposal has received broad support from school boards and county commissions across the state, although how the funds would mesh with plans already on the books and future construction is still in review.

In an email response to Carolina Public Press, Geoff Tennant, chair of the Polk County Board of Education, said the district would likely try to spread the funds between new construction and repairs and renovation.

“Each of our campuses has unique needs and the board along with the superintendent and his staff would have to develop a list of priorities. From that point we would seek to do the greatest good for the greatest number of students with the funds that would be allocated to us,” he said.

The school board, he said, has had to hold the line on capital funds to meet the ongoing expenses for teachers and curriculum needs.

“Because school construction and facility maintenance are responsibilities of local governments, the sheer demand for resources from not only the public schools, but other governmental agencies has made it impossible for counties like Polk and others to fund the capital needs of the public schools.”

Tennant said he is uncertain whether the bond proposal means a stronger state commitment to school construction funding.

“The positive feelings that are being expressed at the moment have to be tempered with the realization that both chambers of the state legislature have to approve the same bill to place this item on the November 2018 ballot. While there does appear to be strong support in many important corners, the voters will have to decide whether or not to tax themselves,” he said.

Chuck Francis, chair of the Haywood County school board, said he wants to see more details on the use of the funds.

“In Haywood, since our enrollment has fallen instead of risen, it’s not as big an issue for us to build news schools as to maintain what we have,” he said. “Of course any construction money is important. One question that comes to my mind is that since a lot our structures are old, I would wonder if they would be eligible for improvements like roofs, window replacement and HVAC replacement for existing structures.”

Francis, who served as president of the State School Board Association in 2011 and 2012, said for districts in the state that are growing like those in Buncombe County, the need for new construction is urgent.

“The legislature has kicked the can down the road pretty far and it’s long overdue for a lot of construction to be done in North Carolina,” he said. “There’s a huge amount of need for it.”

The moves to require class-size reductions and reduce local district flexibility in using the money are also driving the need for help with construction,” he said.

The legislature delayed the crunch this year through House Bill 13, which allowed districts another year of flexibility, but next year, Francis said, the additional space needs required by class-size reductions will be apparent.

“When you do classroom size reduction you need more space and more teachers,” he said. “When they start dictating those type of things and take away flexibility they need to fund construction to help with that.”