"Slow Tax Growth May Affect School Construction"

"BOSTON, APRIL 2, 2008 — Stumbling sales tax revenues are causing the state authority charged with helping communities build and renovate schools to ask local officials to carefully consider their requests.

“We’re going to be scrutinizing every line item of every project going forward,” said Katherine Craven, executive director of the Massachusetts School Building Authority.

The increased scrutiny stems in part from the faltering sales tax, Craven said, describing the tax as the agency’s “lifeblood.”

The agency sees 78 percent of each penny from the state’s five-cent sales tax, which is experiencing a “significant deterioration” according to MSBA staffers. Through the first nine months of fiscal 2008, sales tax collections are running only 0.7 percent of the same period a year ago, according to figures released late Wednesday afternoon.

Citing numbers from the state Department of Revenue, agency staffers said they did not see the trend changing significantly. “If it doesn’t perform, it puts constraints on what we do,” Andy Cherullo, the MSBA’s chief financing officer told the agency’s board. “If the sales tax doesn’t perform, the ability to give grants goes with it.”

Until about 2000, around the time when the state tied a penny of the sales tax to school construction, sales tax revenues grew at 6 or 7 percent per year. But in the last six years, growth has fallen to 2 percent, Cherullo said.

When the agency was created in 2004, its financing models assumed a 4.5 percent growth rate, a conservative guess at the time, he said.

Turf fields and stadiums might be “nice,” but in some cases should be considered extras, particularly when the money can go to pay for boilers at another school, Craven said. “Things that are avant-garde may not be something we’re going to approve,” she said.

Treasurer Timothy Cahill said school districts will also be encouraged to regionalize and combine schools. Lawmakers, including Rep. Patricia Haddad (D-Somerset), co-chair of the Education Committee, and other stakeholders are interested in holding what Craven called a “mega-regionalization hearing.”

The board voted today to increase by 3 percent reimbursements available to regional school construction efforts.

“We think we’re going to get to as many projects as early as we can, because building them today would cost us less, especially if inflation is going up,” Cahill told the News Service. “We’re going to be very careful. We would advise the state to be as careful in all of their capital expenditures.”

Staffers noted that grants can be awarded even with no growth in the sales tax, though some years grants will be “severely constricted.”

At no growth, the amount of grants funded in the next 30 years would reach $5.6 billion, compared with $21.2 billion at a 4 percent growth rate, according to a chart MSBA handed out at the board meeting.

“I think they’re moving prudently,” said Quincy Mayor Tom Koch, who was at the meeting in downtown Boston to press for movement on the city being allowed to build a new Central Middle School. Architects have deemed the current one “archaic,” according to MSBA staffers. A new Quincy High School remains under construction.

“There’s only so much money they can work with,” Koch said.

The comments came before the seven-member board advanced 19 building and renovation projects. The agency recently lifted a four-year moratorium on new projects.

Eleven school districts were moved into the schematic design phase, many of them for repairs, including Beverly, Boston, Brookline, Carlisle, Dedham, Hanover, Methuen, Middleton, Quincy, Sharon and Sturbridge.

Four school districts will be reimbursed for repairs totaling $2.8 million to school buildings belonging to Acton, Lakeville, Shawsheen Valley Regional and Tyngsborough.

Three school districts were moved into the feasibility study phase, including Andover, Maynard, and Stow.

The board also voted to allow Hingham to start on plans for an additional elementary school to help deal with overcrowding. The state is scheduled to pay for $10 million out of the elementary school project’s $26 million budget.

The agency may also be adding to its own budget. Craven said the agency has come in under projected spending in recent years and she hopes to hire a permanent staff person with architectural expertise.

The person would be the agency’s “house doctor” on architecture, as opposed to the agency hiring out consultants, according to Craven."