In the final days of session, funding school construction remains a budget debate

Children play tag in a hallway at Fox Elementary School in Richmond, (Ned Oliver/Virginia Mercury)

Keith Perrigan, superintendent of Bristol Public Schools, can think of a lot of ways to spend $130,000. He said it would pay for three, nearly four new school roofs, or the debt service on a $1 million construction loan.

“It could take care of boilers and chillers, or asbestos abatement,” Perrigan said. “We have two elevators we need to replace in our division, and it would pay for those. $130,000 is a lot more than zero.”

As the president of Virginia’s Coalition of Small and Rural Schools, Perrigan is a vocal advocate for a Senate budget amendment that would dedicate money toward school construction grants for the first time in more than a decade. Under the funding formula, each school district would receive a base grant of $100,000 per year, with the remainder of the funding distributed according to a division’s enrollment size and need.

Sen. Todd Pillion, R-Abingdon, the sponsor, said the state hasn’t set aside money for school construction since the fund disappeared in 2010 — the victim of cutbacks during the recession. It’s become a statewide problem amid reports of struggling school districts with leaking roofs and buildings dating back to the 1920s.

Less than a month ago, school construction seemed like a unifying issue, with lawmakers from both chambers and both parties publicly gathering to urge support for needy school districts. But that’s changed in the final days of the General Assembly session, as the construction grant fund remains a point of disagreement in ongoing budget discussions.

The House rejected a similar amendment sponsored by Del. Israel O’Quinn, R-Washington, which would have leveraged revenues from skill games to re-establish a construction grant fund. Pillion said any budget items linked to the electronic gambling machines have become increasingly unpalatable as it becomes more and more likely that the state will ban the games.

“Right now, there seems to be little appetite in the General Assembly to continue them,” he said. Sen. Bill Stanley, R-Franklin, also failed to pass a bill that would have used taxes on skill games to fund new school roofs.

That leaves the House and Senate with opposing proposals for increasing investment in schools. While the House budget includes other forms of aid — including $12 million over the next two years for schools experiencing unexpected enrollment loss, and a roughly $70 million addition to Gov. Ralph Northam’s proposed funding for schools with high numbers of low-income students — it doesn’t include money for school construction.

Instead, House appropriations staff say they’ve allocated more in supplemental per-pupil payments than the Senate, giving schools flexibility to use the additional funding however they want.

The problem, Perrigan said, is that the most of the extra money is also tied to skill games. The House is betting that banning the machines will lead to an increase in Virginia Lottery revenue, along with recently passed legislation allowing the state to sell lottery tickets over the internet.

Kevin Hall, executive director of the Virginia Lottery, reported in September that the lottery expects to lose nearly $140 million in sales in fiscal 2020 — a loss of nearly $40 million in lottery profits for K-12 education, spokesman John Hagerty wrote in an email. Budget staff in both chambers are anticipating that the lottery will regain the full amount thanks to both bills.

“It could give us some flexibility, but there’s no guarantee that the money will be there the next year,” Perrigan said. Language attached to the supplemental funding in the House would allow the Virginia Board of Education to reduce those per-pupil payments if lottery revenue didn’t increase as much as expected, according to House appropriations staff.

The same language is attached to the Senate’s supplemental per-pupil spending, but not to its school construction fund, Pillion said. The chamber is proposing a $55 million investment over the next two years to re-establish the fund — something Del. Mark Sickles, D-Fairfax, described as a fraction of the actual cost of improving the state’s school facilities.

“The need across the commonwealth is great, and we just don’t have the revenues to make a substantial difference,” he said. “One elementary school here in Richmond is $45 million. The Senate’s budget has, what, $25 million in it? So, it barely buys half a school.”

A 2013 study ordered by then-Gov. Bob McDonnell found that more than 60 percent of Virginia’s school buildings were more than 40 years old, with an estimated $18 billion price tag for renovating all schools more than 30 years old. But education advocates still aren’t happy that Gov. Ralph Northam’s proposed budget included no funding for school construction, and that the Senate amendment is now at risk.

“Last time construction grants were part of the state budget, Bristol received about $400,000,” Perrigan said. “So, $130,000 is at least a step in the right direction. It would be very appreciated if it stayed in the budget because that’s money we have not had in the last decade to apply to school facilities.”

The current lack of construction funding largely affects rural and urban school districts, where local officials often lack the money to pay for school improvements on their own. Loudoun County, one of the wealthiest areas in Virginia, spent nearly 166 percent more on its schools than the state required in fiscal 2018 to maintain the state’s standards of quality, according to data from the Department of Education. Bristol spent just over 50 percent more.

Perrigan said it’s difficult for the city to raise property taxes or take other steps to increase local school funding when 75 percent of its students qualify for free or reduced lunch.

The lack of consensus over construction money has frustrated legislators in rural districts, including Pillion, who also sponsored a bill to permanently reestablish the School Construction Fund in the state’s budget. That legislation died in a House committee, as did a companion bill sponsored by O’Quinn.

“I’m surprised this is still a debate,” Pillion said. “We have the money to make this investment in our kids, and now is the time if we’re ever going to do it.”