Miami-Dade, Broward schools may not get stimulus funds for construction

In 2008, the Florida Legislature required school districts to shift some property-tax revenue normally designated for construction projects into day-to-day district expenses so the state wouldn’t have to increase taxes to fund school systems.

The change lowered districts’ ability to borrow because they have less money to back their debts with — thus making them riskier to investors.

Now, Miami-Dade and Broward are so close to exceeding their debt limits they may soon not be able to borrow any more money for construction.

That’s a problem because the stimulus package includes tax provisions that would let districts issue interest-free construction bonds to buy land and build new schools.

The federal government would pay for the interest.

That would translate to about $212.7 million in bonding capacity available for Miami-Dade, the fourth-largest district in the country, and about $100.7 million for Broward, the sixth-largest — but not with the districts’ existing borrowing pictures.

”It’s extremely frustrating,” Broward Superintendent Jim Notter said.

”And it’s not a good business decision in a recession because you have less construction projects that you’re in dire need of to put on the street.”

The Council of the Great City Schools, which represents the largest urban school districts in the country, had been pushing for this kind of construction legislation for 11 years, said Frank Mandley, the Broward district federal lobbyist.

Not being able to take advantage of it ”just makes me cry,” Mandley told fuming School Board members on Friday at a workshop.

‘THIS IS HORRIBLE’

”Oh my goodness — this is horrible,” board member Phyllis Hope said.

Miami-Dade may be able to benefit from the stimulus tax provisions if it issues some bonds next year, said Richard Hinds, the district’s chief financial officer.

But that might prove difficult because while the federal government would pay the interest, the district would have to pay back the principal in 12 or 13 years, instead of the usual 20 or 30 years.

”You’re going to be stressed to issue them because you don’t have the money to pay them back,” Hinds said.

The Broward and Miami-Dade districts have already delayed or eliminated some construction plans, in part because of declining student enrollment and in part because of last year’s property-tax move decreasing their construction funding and borrowing ability.

With property values expected to fall further next year — about 14.9 percent in Broward and 12.4 percent in Miami-Dade — even more projects will be pushed back or dropped. Officials from both districts had said they would try to lobby state lawmakers to undo the change, but legislators have made clear that isn’t likely.

NO NEW SCHOOLS

If Florida receives its share of so-called stabilization money from the stimulus package to plug budget holes in education, some of those dollars could be used for repairs to existing facilities — but not for new schools. The state has to apply for a waiver to get those funds as one of three states to underfund education over the past several years.

The U.S. Department of Education has not published details on how to qualify for the waiver, and so the state has not requested it yet.

But most lawmakers expect it to be granted, and Gov. Charlie Crist drafted his budget for the fiscal year that begins July 1 assuming at least some of the money would be in state coffers.