SAB raises construction grant 4 percent

The State Allocation Board raised the per-pupil grant amount Wednesday for school construction projects by 4.28 percent as part of its annual adjustment.

The grant increase will be applied to all projects that the board approved in 2010 but have not yet received an apportionment - those sitting on the so-called unfunded list - as well as the projects that were apportioned funding at Wednesday's hearing.

The grant amount was reduced in 2010 by 6.74 percent. That decreased amount was applied to projects that received funding between the months of March and December.

State law requires the School Facility Program to adjust its per pupil grant amount each year to reflect economic changes.

The formula used to determine the grant, known as the Class B Construction Cost Index (CCI), has drawn controversy in the past because school interests argue that grants are typically inconsistent with the actual cost of school construction.

Since 1998, the board has switched back and forth between two formulas provided by Marshall and Swift, a construction valuation firm. The first formula is based on eight California cities, and the second is based on ten western states.

For the last couple years, the board has used the eight California cities index because it has been deemed the most accurate measurement of the state's school construction costs.

Last year's decrease of 6.74 percent was the first grant reduction since the program's inception in 1998.

It is important to note that the raised grant amount will more rapidly deplete the available bonds that fund construction projects.

Only $436 million remains in state coffers for new school construction, which is about 3 percent of what's left of the $14.6 billion that voters have approved over the past 12 years.

But about half of that amount - $194 million - is limited to projects that qualify for the seismic mitigation program, which provides funding for projects that meet narrow criteria for earthquake retrofits.

It is also important to note that due to growing state debt, it is unknown whether the Legislature would approve a new school construction bond in 2012, which raises uncertainty over who will pay for new schools in the future.

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