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David
Blount, Editor
State and local funding for school facilities has had a rapidly
evolving history in Virginia in recent years. Aside from a
state infusion of approximately $45 million for school building
construction in 1950 (the so-called Battle Plan, named for
then-Governor John Battle), responsibility for building and
renovating school facilities primarily has remained a local
responsibility. In the 1990s, the school construction issue
became a perennial target of policy and political debate,
and in 1998, the General Assembly provided $110 million for
the School Construction Grants Program.
Throughout much of the 1990s, localities pleaded their case
for the state to provide direct funding for local school projects.
Student enrollment was increasing, buildings were aging and
unable to accommodate new technologies, and the amount of
local debt service was reaching new highs. In 1992, the General
Assembly earmarked funds for ongoing school building maintenance
needs or debt service payments. The program was codified in
1998 through HB
138. In 1994, HJ
250 and SJ
131 established a special committee of legislators to
study alternative methods of school construction and renovation
funding, primarily through an examination of other states’s
practices (a 1988 resolution also had established a joint
subcommittee to study the feasibility of developing a state
program to fund construction of public school facilities).
The group existed for three years, ultimately yielding to
the Commission on Educational Infrastructure, established
in 1996 through HJ
135 to evaluate school infrastructure needs and project
the need for school construction and renovation in the future.
Various Commission recommendations have been approved, and
the Commission’s work has extended into a fifth year.
There also were several attempts during this time to require,
by amending the Constitution, that the Literary Fund be used
exclusively for its intended purpose of providing low-interest
loans for school construction. Although the House approved
the amendment three times, in 1995, 1997 and 1999, the Senate
blocked the measures every time. Beginning in the early 1970s,
funds were routinely taken from the Literary Fund to pay for
teacher retirement, and in fact, during the 1980s and 1990s,
the transferred amount totaled nearly $750 million. Also,
for just over four years in the early to mid-1990s, no direct
loans were made from the Fund. In 1997, the legislature did
approve HJ
662 urging restraint in using the Fund for other purposes.
A 1995-96 Virginia Department of Education survey showed
a $2.1 billion shortfall in funds to meet school capital improvement
and maintenance needs. Although the Virginia Public School
Construction Grants Program had been established in 1995 through
HB
2240, but not funded, and there were unsuccessful bills
to direct some lottery proceeds to school facilities in 1995,
it would take until 1998 for the General Assembly to earmark
state funds for local school construction for the first time
in nearly 50 years. School construction became an integral
part of legislative debate over enactment of the Personal
Property Tax Relief Act of 1998. After haggling over scores
of bills, and with much political posturing, it took a special
two-day legislative session in April that year for the legislature
and the executive branch to reach agreement on a car tax relief/school
construction package. The 1998-2000 budget provided $55 million
each year for school capital improvements and debt service.
SB
4005 specified how the funds were to be distributed and
established a Commission on State Funding of Public School
Construction to recommend specific eligibility and needs criteria
for future school construction funding. The Commission never
met.
In 1999, school construction funding again entered into legislative
discussion of a major policy issue. This time, it was a budget
proposal to dedicate all proceeds from the state lottery directly
to public education (Code provisions require 100% of lottery
revenues be transferred to the general fund for public the
purpose of public education). Many policy-makers said this
would fulfill a promise made to voters when the state lottery
was approved in the late 1980s. The proposal targeted just
over 60% of the revenues for the state’s share of basic
aid, while the remainder would be distributed to localities
for any educational purpose. In the session’s final days,
the legislature, after much wrangling, finally approved budget
provisions to designate the local distribution of lottery
proceeds as follows: no less than 50% for nonrecurring costs,
and no more than 50% for recurring (operating) costs.
As was the case with funding of the 1998 construction grants
program, the lottery proceeds program had no accompanying
statutory language. This would set the stage for another round
of debate in 2000, when there were numerous attempts to establish
in the Code (as recommended by the Commission on Educational
Infrastructure), the distribution of lottery proceeds as had
been set forth only in the 1998-2000 budget. While these bills
all were defeated, the legislature narrowly approved amendments
to another bill, SB
505 to codify into law this 50/50 local lottery proceeds
distribution. However, the bill ultimately was vetoed and
funding for both the school construction grants and lottery
proceeds programs was continued in the 2000-2002 budget as
previously enacted.
Virginia voters approved a Constitutional amendment concerning
lottery proceeds in November 2000. With little dissent in
1999, the legislature approved Constitutional amendments to
establish a Lottery Proceeds Fund that dedicates net lottery
revenues for public education. By much slimmer margins, lawmakers
again approved the proposed Constitutional amendment on lottery
funding HJ
121 and SJ
131 in the 2000session. (Note: The legislature must approve
such proposed amendments twice, with an intervening election,
to place it before the voters) This approved Constitutional
change is effective July, 2001.
With the General Assembly mired in a budget impasse in 2001,
no changes were made to school construction and technology
funding streams. The Governor had proposed in his introduced
budget that the general fund dollars in the school construction
grants program be replaced with Literary Fund money.
The state has been actively involved in funding educational
technology over the years. This will be discussed in detail
in the Digital Divide issue brief. It is significant to note
that both the School Construction Grants and Lottery Proceeds
Programs contain language that allows (non-recurring expenses)
funds to also be used for technology and other renovations
related to modernizing classroom equipment.
Given the strong interest from many legislators to codify
budget provisions related to the School Construction Grants
and Lottery Proceeds Programs, look for additional legislative
proposals seeking to accomplish this.
It is interesting to note that several initiatives recommended
by the Commission on Educational Infrastructure have addressed
educational technology. During the 2000 General Assembly,
the Commission was continued as the Commission on Educational
Infrastructure and Technology, with a specific additional
charge to develop a formula for funding educational technology
and technology support personnel. However, the panel disbanded
in late 2000 without reaching consensus on further recommendations
or direction.
1994 – HB 1018 and SB 153 (school construction
grants), SB 376 (Literary Fund for debt service), HJ 250,
SJ 131
1995 – HB 1710 (surplus property proceeds for
construction), HB 2240 (School Construction Grants Program),
HB 2614 and HB 2616 (lottery funds for education, law enforcement,
tax reduction), HJ 562 and SJ 380 (construction study), HJ
563 and SJ 381 (Literary Fund Constitutional amendment)
1996 – HJ 117 and SJ 88 (construction study),
HJ 135 (Infrastructure Commission), HJ 248 and SJ 87 (Literary
Fund Constitutional amendment)
1997 – HB 2160 (Literary Fund loans amount),
HB 2581, HB 2640 and SB 1047 (Trigon proceeds for school construction),
HB 1835 (Literary Fund purposes include technology), SB 1179
(lottery funds for school construction), HJ 493 (Literary
Fund Constitutional amendment), HJ 500 (Infrastructure Commission),
SJ 318 (Literary Fund study)
1998 – HB 138, HB 372 and SB 67 (VPSA), HB 559
(lottery funds for school construction), HB 894 and SB 587
(school construction funding mechanism), HB 922, HB 1130,
HB 1147, HB 1162, SB 524, SB 675 and SB 678 (school construction
grants), HB 1252 (sales tax increase for school construction),
SB 672 (Literary Fund loan amount), SB 695 (lottery funds
for infrastructure), SB 4005, HJ 84 and SJ 67 (Literary Fund
Constitutional amendment), HJ 116 and HJ 213 (construction
study), HJ 142 (construction funding supported), HJ 165 (Infrastructure
Commission)
1999 – HB 1435, HB 2145, HB 2316, HB 2586, SB
723, SB 1051 and SB 1225 (lottery funds for education), HB
2513, HB 2606 and SB 1164 (lottery funds for school construction),
HB 2317, SB 1184 and SB 1289 (school construction funding),
HB 2379 and SB 779 (Literary Fund loans/bond counsel), HB
2478 (indoor air quality task force), HB 2591 and SB 1049
(escrow accounts for construction grants), HJ 84 (Literary
Fund Constitutional amendment), HJ 607, HJ 702 and SJ 460
(Lottery funds Constitutional amendment), HJ 670 (Infrastructure
Commission), SJ 498 (Educational Accountability Commission)
2000 – HB 903 and SB 244 (escrow accounts for
lottery proceeds), HB 904, HB 942, HB 1017, HB 1039, HB 1357,
SB 521, SB 527 (lottery budget provisions in Code), HB 963,
HB 1545, SB 572 and SB 774 (lottery funds for school construction),
SB 505, SB 622 (lottery funds for education), HJ 121, HJ 169
and SJ 131 (Lottery funds Constitutional amendment), HJ 223
and SJ 237 (Infrastructure and Technology Commission)
2001 – HB 1908 and SB 1033 (VPSA bonds), SB 1057
(technology funds for technical education), SB 1302 (special
local capital fund), SB 1354 (local reserve funds for capital
projects), SJ 400 (DOE study of model school design plans)
Many states have addressed the issue of school construction
funding in recent years. As stated in the Capital Funding:
Facilities and Technology issue brief, updated information
about most states’ efforts to provide state funding for
constructing and renovating schools may be found at the National
Governors Association.
In late 2000, Congress approved a new $1.2 billion school
construction package. Three-quarters of the funding is targeted
to an emergency school repair program, with competitive grant
money going to high-need school divisions. The remaining $300
million will be available for school improvement projects
related to educational technology or for special education
costs.
School Construction Funding in Virginia, Virginia Department
of Education, October 1998
Literary Fund Report to the House Appropriations Subcommittee
on Elementary and Secondary Education, Virginia Department
of Education, February 2000
School Facility Status Survey, Virginia Department of Education,
July 1996
Education Commission
of the States
Education
Week
Click here for a policy issue briefing on “
Capital Funding: Facilities and Technology.”
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