Oregon adopts bond program to fund school construction

Oregon adopts bond program to fund school construction

(Ore.) The state board of education last week approved a set of temporary rules governing a new program that will provide matching funds to local districts for building and upgrading school facilities.

The Oregon Legislature this year authorized the sale of $123 million in state-backed general obligation bonds to fund a new School Capital Improvement Matching Program to help stretch local dollars and address urgent school facility needs across the state.

As in many other states, Oregon school districts generally address facility needs by passing local, voter-approved bonds, according to the Department of Education. But in many communities, passing these bonds has been a challenge, and statewide, there is currently an estimated $7.6 billion in deferred school maintenance costs.

“Our students need and deserve schools that are safe, healthy, and promote learning,” ODE Deputy Superintendent Salam Noor said in a statement. “Through leveraging both state and local resources, we can maximize our impact and remove barriers to student success by improving our schools.”

With the creation of the program, Oregon now joins some 20 other states that contribute to local facilities budgets with cash from statewide voter-approved bonds to help schools pay for construction, repair and upkeep of their structures. Other states use a variety – and in some cases a combination – of different methods, from general fund revenues to sales, property or other special taxes or lottery proceeds to pay for school construction.

In California, Gov. Jerry Brown – focused on eliminating debt – has suggested that the state move away from selling bonds to support school construction which, in effect, would dismantle the decades-old School Facilities Program. The SFP relies on statewide voter-approved bonds to make matching contributions to local districts but the last statewide bond measure was passed in 2006 and the funds are nearly depleted. Administrators, facilities managers and school housing advocates, however, are fighting to keep the program alive and have a qualified a new, $9 billion statewide school facilities bond measure for the November 2016 election ballot.

In Oregon, the newly-formed Office of School Facilities within the ODE will administer the program, awarding funding to districts in one of two ways.

The first method gives priority to districts with the dual problem of low property values and high rates of low-income families.

Sixty percent of the state funding would be set aside for the high need districts on the condition that voters pass a local bond measure. The state would match bonds of up to $4 million dollar for dollar. Districts issuing larger bonds would receive a minimum $4 million matching grant but could earn as much as $8 million depending upon a funding formula that weighs each district’s need.

The remaining 40 percent of the funding will be available to other districts in the form of matching grants on a first-come, first-served basis.

In addition, the Office of School Facilities will provide technical assistance grants to districts enabling them to conduct a variety of assessments on their school facilities including long-range facility plans and seismic needs. Funding for these grants will be available to districts beginning in summer 2016.

According to the ODE, districts will have three opportunities to apply for the matching grants. Applications will be due before general elections in May 2016, November 2016 and May 2017.  The first round of applications will be accepted starting Jan. 15, 2016. Funding will be contingent on passage of a local bond to improve school facilities.

The Legislature would need to approve another round of funding in 2017 to continue the program.