Montgomery County boasts the largest public school district in Maryland. It has more than 137,000 students, 10,700 teachers, and a 1,100-vehicle bus fleet--plus a 10-figure operating budget, much of it earmarked for construction. In fiscal 2002, the district plans to spend $135.5 million to build or rehab schools, roughly matching 2001's capital outlays.
While its student population is still growing, however, Montgomery County's cash drawer is looking emptier. In fiscal 2003, which starts July 1, spending on school construction will fall to $105 million and is forecast to remain at that reduced level for at least the next six years. "We're slowing down simply because the tax revenue isn't there anymore," says Richard G. Hawes, director of facilities management.
Montgomery County may well turn out to be the canary in the coal mine. As immigration and Generation Y have swelled enrollments, school systems across the U.S. have gone on a building boom, pushing new starts on educational buildings to a record $42.8 billion in 2001, according to F.W. Dodge. But with the recession squeezing state and local tax receipts, many districts are now finding they can no longer afford to keep adding classrooms. In New York, for instance, the state has proposed delaying construction projects in 11 crowded districts until 2004. And in Illinois, the fund for school building is down to $70 million, enough money to construct only the first seven schools on a waiting list of 185. "Those stories are going to be repeated all around the country," warns Kenneth D. Simonson, chief economist of the Associated General Contractors of America.
For the time being, though, there is still some good news. Given that it can take up to 15 months and $10 million to build one elementary school, money is allocated well in advance. So much of the spending slowdown won't be felt until 2003. Indeed, F.W. Dodge predicts that school construction starts will rise 5% in 2002, to nearly $45 billion. Also, as the oldest members of Gen Y finish high school, more and more colleges and universities are upping their construction budgets to accommodate the impending wave.
In addition, while many school districts are cutting long-term capital budgets, others are pushing ahead. Florida cut $639 million from its education budget but added $260 million for school construction. And North Carolina is moving on with its building program, thanks to a $3.1 billion bond measure. But after the numbers get tallied, the construction industry is bound to come up with a smaller sum from schools--if not this year, then in 2003.
By Michael Arndt
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Copyright 2002 , by The McGraw-Hill Companies Inc. All rights reserved.
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