Task force learns how RI could fund billions in school repairs

From left to right, NEARI President Larry Purtill, Education Commissioner Ken Wagner and Treasurer Seth Magaziner. (Photo by Dan McGowan/WPRI 12)

PROVIDENCE, R.I. (WPRI) – Rhode Island could fund billions of dollars in needed public school repairs by moving to a system that funds projects as they happen, placing a general-obligation bond question on next year’s ballot or offering incentives to cities and towns that commit to quickly making infrastructure improvements, General Treasurer Seth Magaziner suggested Monday.

Magaziner, who co-chairs the Rhode Island School Building Task Force, stopped short of making any recommendations during the panel’s second meeting, but he warned there is no amount of “financial wizardry” that will get the state out of spending more than it currently spends if leaders want to commit to making $600 million to $3 billion in school repairs in the coming years.

One thing Magaziner made clear to the group: “Just pouring money into this existing system isn’t going to get us there.”

In a presentation to the task force, Magaziner said the state currently spends about $80 million a year on school housing aid, the majority of which is used to partially reimburse cities and towns for projects they have already completed. He said funding repairs at the same pace would not produce enough money for municipalities to make all the improvements their schools need over the next decade.

Magaziner also stressed that simply increasing the amount the state is willing to issue in reimbursements each year would force cities and towns to borrow nearly $2 billion over 10 years. (There is no guarantee voters in every town would be willing to approve the general-obligation bonds needed to make infrastructure improvements.)

Magaziner said the state could consider three new concepts:

  • Shift the current housing aid reimbursement program to a pay-as-you-go (PAYGO) model, similar to the system Massachusetts uses. Magaziner said the program would reduce both the municipal debt burden and long-term costs for the state. (Rhode Island currently has a small PAYGO system designed to address urgent needs in schools.)
  • Use a statewide general-obligation bond to funding a PAYGO system. School facilities bond questions appeared on the ballot eight times between 1972 and 1984, according to Magaziner. He said the state has the capacity to issue $1.2 billion in new general obligation bonds over the next 10 years.
  • Offer “aggressive, expiring bonuses” to municipalities willing to submit more applications for school repairs on a quicker timeline.

The 16-member task force was created by Gov. Gina Raimondo in September after consulting firm Jacobs released a study that found $627 million is needed to keep all of the state’s public schools “warm, safe and dry.” To bring all schools into good condition, the cost would be $2.2 billion. The projected costs could grow to $3 billion when anticipated future repairs are considered.

Raimondo has asked the task force to produce a report outlining recommendations to her by Dec. 15. She is expected to include a school infrastructure plan in her budget proposal for the 2018-19 fiscal year, which she will release early next year.

Monday’s meeting also included a presentation from the Massachusetts School Building Authority (MSBA), which oversees school infrastructure programs in the Bay State. Massachusetts dedicates 1% of the state sales tax – roughly $800 million a year – to partially reimburse municipalities for schoolhouse improvements.

Michael DiBiase, director of the R.I. Department of Administration and a member of the task force, noted that Massachusetts didn’t raise its sales tax in order to set aside 1% for school infrastructure. He said Rhode Island probably doesn’t have the alternate revenue sources that would allow for a similar allocation of the sales tax.

The task force is scheduled to meet again Oct. 30.

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Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan