1. Funding School Capital Improvements: A National Perspective Presentation to the Oregon School Capital Improvement Planning Task Force John Myers & Mark Fermanich, APA Consulting Portland, Oregon May 13, 2014

2. APA Background  APA is a Denver-based consulting firm, founded in 1983, that works primarily with state-level policymakers on education finance and governance issues.  APA has worked extensively with states on the procedures used to allocate state aid to districts and schools.  APA has worked for the Oregon Legislature: 1991 and 2000.

3. APA Experience  School finance equity & adequacy  State work on facility funding  ECS look at state capital funding formulas  Survey of school district facility needs  Bi-partisan work for policymakers

4. Presenters’ Experience  John  Former Legislator and NCSL Education Program Director  Consultant to the National Board for Professional Teaching Standards  Helped create the National Association of Charter School Authorizers  37 years of school finance formula work  Mark  Former legislative and school district staff  School finance researcher  University faculty member  29 years of education policy work

5. School Facilities Formulas  Flat Grants  Equalized Funding  Need based grants  Basic support  Full state  Revolving Funds

6. APA work on Facilities  Idaho  Trends in bond election success  Arizona  Analysis of Changes in funding for facilities  Colorado  Survey of School District facility needs  Education Commission of the States  Review of all State facility funding formulas Oregon Education Investment Board, 2012

7. Current Challenges to Facility Funding  Local elections  Equal access to facility funding  Equalization  Governance changes  Charter Schools  Virtual and Blended learning  Age and condition of facilities/deferred maintenance  Green schools/healthy schools © Augenblick, Palaich and Associates, Inc. 7

8. The Funding Challenge  2010 estimate puts value of deferred maintenance nationwide at $271 billion, or $4,883 per student  In state by state estimates, 2008 study estimated Oregon’s total PK-12 infrastructure needs totaled $2.5 billion © Augenblick, Palaich and Associates, Inc. 8 Sources: 21 st Century School Fund & AFT

9. © Augenblick, Palaich and Associates, Inc. 9 Do Facilities Impact Student Performance?  Research shows that facility conditions – general upkeep, lighting, acoustics/mechanical noise, air quality, and size affect:  Student performance on assessments  Student attendance  Teacher attendance  Teacher retention For extensive bibliography see National Clearinghouse for Educational Facilities: http://www.ncef.org/pubs/outcomes.pdf

10. © Augenblick, Palaich and Associates, Inc. 10 Revenues  Federal Dollars  Primarily for program specific activities  State Dollars  Equalizing local variation  Local Taxes  Uniform contribution

11. © Augenblick, Palaich and Associates, Inc. 11 Facilities Financing Options in Oregon  Local Sources:  Local General Obligation bonds  Full faith and credit obligations  Local option levies  Construction excise tax  State Sources:  State facilities grants  State bond guarantee program  Measure 68 state bonds  SB 1149 funds

12. © Augenblick, Palaich and Associates, Inc. 12 National Examples  State level funding strategies  State bond issues: multiple states, including California, New Jersey, New York. Some require districts to have long-term facilities plans  Dedicated revenue: Arizona FIRST program has had multiple funding sources  Portion of 0.6% sales tax, lease to own, pay as go

13. © Augenblick, Palaich and Associates, Inc. 13 National Examples  Shared funding strategies  State equalization aid for debt service levies, for example Minnesota  Maryland Public School Construction program: State bond funded, requires 20%-50% local match  Connecticut: state funding provides matching grants to cover 20%-80% of project costs depending on local wealth

14. © Augenblick, Palaich and Associates, Inc. 14 National Examples  Shared funding strategies  Vermont: state funding for 30% of cost of approved projects, eligibility based on enrollment growth, available space and facilities condition  Maine: revolving loan fund includes loan forgiveness for between 30%-50% of project costs, repayment of balance required within 5- 10 years  Ohio: Financial Hardship Loan program provides low cost loans to address critical issues, repayment within 5-10 years

15. © Augenblick, Palaich and Associates, Inc. 15 National Examples  Shared funding strategies  Minnesota: Maximum Effort School Aid program provides low interest loans to low wealth districts  Colorado: BEST program provides matching facilities grants, funded through multiple source including public land income, lottery revenues

16. © Augenblick, Palaich and Associates, Inc. 16 National Examples  Other strategies  Dedicate portion of formula base amount for operating capital, facilities (charters), for example Minnesota, until recently Colorado  Multi-jurisdiction shared facilities, public- private partnerships

17. Questions? © Augenblick, Palaich and Associates, Inc. 17