New money for new schools

Published: Friday, January 26, 2007 at 6:01 a.m.
Last Modified: Friday, January 26, 2007 at 12:21 a.m.
New state and federal mandates will require building many new schools in Florida in the near future. Conservative estimates of the costs of these new schools between now and 2020 start at $35 billion.
Current funding for these mandates does not match their projected costs. A local fee on real estate transactions could help make up the shortfall.
In Florida, we estimate the cost of building a new school by using a unit of capacity called a student station. A student station takes into account that a student will use space in core facilities like cafeterias and auditoriums as well as using classroom space.
Right now, the state pays a maximum of about $18,500 per student station to build an elementary school. This means a school designed to hold 1,000 students would cost $18.5 million. The real costs exceeded that amount several years ago.
A 2004 study in Volusia County estimated the cost of an elementary school at $21,148 per student station. Brevard County currently expects to pay $22,267 per station. Martin County estimates an average station cost of $34,000 for their next round of school construction.
The need for new schools is being driven by new programs such as the class size reduction amendment, statewide school concurrency, the Voluntary Pre-K program and the No Child Left Behind Act. The state Legislature has yet to provide a stable source of funding for these programs.
In 2006, the state Legislature gave public schools an additional $1.8 billion. But that was a one-time windfall due to increased property values. What we need is a steady, dependable source of school construction money.
One such source is a real estate transfer fee. Real estate transfer fees are "doc stamp" fees that are collected at real estate closings. The current statewide documentary stamp fee collects about $340 million a year. It is used for a wide variety of programs including land conservation, water protection, transportation and housing.
In addition, the state has a local option documentary stamp fee intended for local housing programs. Currently this is only used in Miami-Dade County. This local option fee could be expanded to include school construction.
A local option real estate transfer fee could generate an appreciable part of the new school construction money needed in coming years. Statewide, income to school districts from the fee could amount to $220 million per year.
That income, in turn, could be used to borrow money through school construction bonds. Between now and 2020, school districts could borrow almost $10 billion in school construction funds based on that income alone.
The actual amounts raised, of course, would depend on how many school districts take advantage of the local option fee. But in many districts, it could become a significant source of school construction revenue. The costs to homeowners would be modest. Based on Miami - Dade's example, such a fee would add just $350 to the cost of a $100,000 home. The return in increased property values created by improved school systems would make that an excellent investment.
Creating a local option real estate transfer fee for schools will take bold action by state legislators. They could amend the current law on local fees or they could create a separate one specifically for schools. Either way, it would brighten the future of Florida's public schools considerably.
Peter Rebmann is a founding member and president of the Alachua County School Concurrency Project, a non-profit organization founded to educate the public about growth-related school financing issues.

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