Op-ed views and opinions expressed are solely those of the author and do not necessarily represent the views of BizPac Review.
By Art Johnson Ph.D.
With the increasing federal drumbeat to spend a trillion dollars rebuilding of our nation’s infrastructure through Public Private Partnerships, public school districts should seize the same opportunity. Since the public sector often is criticized for paying too much and taking too long, it is time to enlist the private sector’s expertise and efficiencies to strengthen the public education capital assets program.
Traveling the State of Florida and speaking to numerous district and state educational leaders, it is clear that school districts need to build and/or replace many of their schools. The problem? – most districts do not have the budget to do so.
Public Private Partnerships are an ideal solution. These partnerships provide 100% funding, acquire property, design and build schools, lease back to districts to own and provide long term maintenance.
Historically, school building funds came directly from State of Florida and/or General Obligation bonds approved by local voter referendums. Thousands of Florida schools were built using this method. However, when economic and political forces diminished these funds, an alternative source of funding was created. Certificates of Participation (better known as COPS) allow school districts to initiate bonds without a local voter referendum.
From 1990 to 2008 the use of these COPS went from 8% of all Florida school construction to 86% (ref. E. Lamar Taylor, Florida’s School-District Lease Financing: Cross Collateralization, Path Dependency, And Their Implications, 2012). Today, the level of COPS capital debt in Florida school districts totals in the billions of dollars, jeopardizing the very financial health of these districts.
Interestingly, many of these same school districts are forced to pass local voter-approved tax referendum and then commit millions of new dollars to the debt service on schools previously financed by COPS. In 2016, Indian River’s Kathleen Sloan referred to the COPS financing and refinancing as “putting our schools in hock!” Similar comparisons to a “house of cards” or a Ponzi scheme are understandable.
In fact, the recent passage of Florida Legislation HB 7069 further exacerbated Florida districts’ indebtedness by directing increased district funds to public charter schools. A credit downgrade is possible according to Moody’s Investment Service. Ironically, while public charter schools have provided greater parental choice and relieved overcrowded and/or poor performing traditional schools, nothing is more important than the continuation of a strong traditional public-school system. Our traditional schools educate some 90% of America’s youth. There is a solution beyond reliance on COPS and charter schools.
All issues considered, there remains a need for improved public school funding. The Public Private Partnership model serves as a perfect example of disruptive innovation. Such creative thinking is exactly what is needed to provide timely funding to build and maintain schools while also freeing up funds for teacher raises and many other deserving programs for students. The private sector is more than willing to help. Let us engage them in “The Genius of our Democracy……. Public Education!”
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