Current News and Updates

____________________________________________________________________________________________

House Tax Cut Bill: Repeal of Tax Credit Bonds

November 3, 2017

House Tax Plan - House Republican leaders and Ways and Means Committee Chair Brady released a tax cut plan that includes deep tax cuts for business, modest savings for the middle class, and a nearly $1.5 trillion increase in annual deficits over the next ten years.

Repeal of tax credit bonds, including QZABs, are among the many tax deductions and credits eliminated to help finance the extensive tax cuts. 

SEC. 3603. REPEAL OF TAX CREDIT BONDS  - The tax reform package calls for the repeal of tax credit bonds effective December 31, 2017. This would apply to Qualified Zone Academy Bonds (QZABs), Qualified School Construction Bonds (QSCBs), Qualified Energy Conservation Bonds (QECBs), and new Clean Renewable Energy Bonds (New CREBs).

 SEC. 3601. TERMINATION OF PRIVATE ACTIVITY BONDS.

QZABs, QSCBs, QECBC - Cost effective QZABs and QSCBs have been used by school districts in every state to renovate, repair, build and modernize thousands of schools and classrooms. QECBSs and CREBs assist efficient and cost-effective energy services to school facilities.  

Californians for School Facilities will continue to work for the extension and improvement of cost-effective tax credit bond programs which have been used by school districts across California to renovate, repair and modernize schools and classrooms.

 House Tax Plan - H.R. 1 is 429 pages of legislative text revising the tax code. Republicans leaders want to pass the plan on party line votes by Christmas. The House Ways and Means Committee begins mark-up on Monday, November 6, scheduled to last 4 days. It would be remarkable to complete a complex tax code rewrite in that short timeframe.

 Corporate Tax Cuts and Deficit - The costly tax cut plan proposes to slash the corporate income tax rate from 35 percent to 20 percent. The immediate and permanent reduction would cost about $1.46 trillion over a decade. Republican leaders and the President argue this will trigger robust economic growth, luring companies to invest domestically to bring profits home from overseas. 

Republicans leaders said most Americans would benefit from lower rates, a doubling of the standard deduction, and increase in the child tax credit. A family of four earning $59,000 a year would save $1,182 in taxes, according to GOP talking points.

 Many Deductions Eliminated - Democrats argue middle-class taxpayers will be hit with a tax increase because multiple deductions and credits are eliminated or reduced, including: elimination of deduction for state and local income and sales taxes, repeal of deductions for medical expenses and student loan interest payments, the repeal of personal exemptions and alimony payments. Mortgage deductions are limited to the first $500,000 in mortgage debt, down from the current limit of $1 million. Deductions for second homes are eliminated.

 Other Proposed Tax Cut Bill Changes:

  • Personal exemptions would be repealed.
  • Workplace Flexible Spending Accounts for dependent care, including children under the age of 13, would be repealed.
  • Education tax credits would be consolidated into a unified American Opportunity Tax Credit; deductions for student loan interest, tuition and related expenses and other education deductions would be repealed.
  • 'SALT' deductions – state and local income and sales tax deductions would be eliminated, and property tax deductions capped at $10,000 per year.
  • Capital gains tax on home sales capped.
  • Charitable deductions would be reserved, but with changes including repeal of special rule allowing 80 percent of the value of donated tickets for athletic events.
  • Eliminates miscellaneous deductions, including for gambling losses, alimony payments, medical expenses, tax preparation fees, and moving expenses.
  • Retirement savings – existing retirement savings incentives, such as pre-tax 401(k) contribution limits, would be maintained. The ability to re-characterize Roth IRA conversions to avoid the tax hit would be repealed.
  • Alternative Minimum Tax would be repealed.
  • Estate tax would be eliminated after six years, but the existing $5.6 million exemption (adjusted annually for inflation) per spouse is doubled immediately with the current 40 percent rate of tax unchanged through 2022. Gift tax parameters would not change but tax rate would be reduced to 35 percent.

Opposition Criticizing the Plan - "They're not doing tax reform," said Senate Minority Leader Charles E. Schumer (D-NY), "They're doing tax giveaways to the wealthy and the powerful." Vocal opposition is growing from the small business and real estate sectors.

 QZABs - Californians for School Facilities is making the case for QZABs and tax credit bonds as the Ways and Means Committee begins its mark-up and as the Senate Finance Committee prepares for Senate consideration of the tax cut bill.

 School Infrastructure - Tax cut legislation is the dominant legislation now. Congress also must complete work on the expiring CR and FY 2018 appropriations bill in December. Californians for School Facilities will work for the extension and improvement of the QZAB program as tax cuts.

 CSF Fall Trip - CSF leaders met in Washington with the California delegation and Committee Staff of Congressman Bobby Scott (D-VA) and Senators Jack Reed (D-RI) and Sherrod Brown (D-OH), the sponsors of comprehensive school infrastructure bills: The Rebuild America’s Schools Act (H.R. 2475) and The School Building Improvement Act (S. 1674), calling for grants and tax credit bonds to finance the renovation, repair, and construction of public school infrastructure. These bills make a strong case for cost effective investing in school facilities as a critical part of our nation’s infrastructure.  

Thanks to all who support the work of CSF and CASH to build and modernize California’s schools and classrooms.

 -Bob Canavan, CSF Federal Legislative Advocate

_______________________________________________________________________________________________

Republican Leadership Releases Draft Tax Bill

November 3, 2017

As part of the ongoing tax reform process, the Republican Leadership in the House of Representatives released its draft tax bill. Below is a link to a section-by-section description of the bill.

 Of particular note for our CSF membership is that the bill would eliminate tax credit bonds (see section 3603) after 2017. This elimination likely includes Qualified Zone Academy Bonds (QZABs) and other tax credit bonds used by our CSF members. The draft tax bill also seeks to eliminate advance refundings.  

The House Ways and Means Committee is expected to mark up the bill beginning next Monday, November 6.

Draft Tax Bill - Section by Section Summary

-Constantine Baranoff, CSF Treasurer

_______________________________________________________________________________________________

CSF Fall Lobbying Event
October 2017 - Washington, D.C.

On October 25-27, 2017, Californians for School Facilities (CSF) will be holding a Fall lobbying event in Washington, D.C. to urge Congress and the Administration to pass infrastructure funding legislation – including funding for public school infrastructure. Join us and make sure your issues are heard!

Why October?

The stars look to be aligning with a possible tax cut and infrastructure funding proposal. Part of the tax reform discussions is lowering the corporate tax rate and providing incentives to bring back more than $2 trillion that United States firms have in overseas accounts. CSF believes there will be a strong effort to take some of the tax revenue from the returned $2 trillion for tax cuts and some for infrastructure.

We believe that the real discussions will be in October because September will be consumed in the Senate with the review and approval of the President’s appointees to executive branch positions and judgeships, while both the House and Senate will be working on appropriations bills and raising the debt ceiling – both of which need to be done by the end of September.

To accomplish these goals, the House and Senate Republican leadership probably will need votes from some Democrats. The Democratic leadership wants infrastructure funding – including schools.

They all want a victory they can claim before the 2018 mid-term elections. The stars could be moving into alignment for a limited victory for all parties.

Who Will We Lobby?

Our Washington, D.C. Lobbyist Bob Canavan will target appointments with the decision makers. CSF believes this will include the House and Senate fiscal committees, possibly Executive Branch staff, as well as leaders in the California Congressional Delegation.

____________________________________________________________________________________________

California Fires, Hurrican Aid, Budget Resolutions, Tax Reform, and School Infrastructure

October 12, 2017

California Fires - The East Coast is shocked by news reports of the devastating fires in Sonoma, Napa, Placer, Orange and other California counties. Fires have been burning all summer and destroying hundreds of thousands of acres in Modoc, Siskiyou, Plumas and other California counties as well as in Washington, Oregon, Alaska, Montana, Utah and South Dakota. There is more national attention now because the current fires are causing fatalities, destroying thousands of homes and disrupting communities. Schools and hospitals are damaged. Undamaged school facilities are shelters providing food services to residents who have lost their homes.

 Schools Facilities as Disaster Relief Centers - This has been a frequent message from CSF in Washington meetings with members of Congress, staff, and Administration officials while making the case for federal support for school facilities. CSF always explains the essential community service role school facilities play during state and local disasters. This week we graphically see school facilities providing much needed disaster assistance in the tragic Sonoma and Napa County fires. 

Texas, Florida Disaster Relief, Continuing Resolution, and Debt Ceiling (H.R. 601) - In September the Administration proposed, and the House approved, a $7.8 billion disaster aid package as a first step in federal disaster aid assistance with Texas and Florida Governors, estimating the disaster needs in $150-180 billion range. After the House passed the initial hurricane aid package, the President unexpectedly negotiated with Congressional Democratic leaders. The result was Senate passage of a larger bill containing more Hurricane Aid, a Continuing Resolution (CR) and an extension of the nation’s debt ceiling. The Senate voted 80-17 to pass $15.25 billion in emergency spending for hurricane relief as well as a debt limit suspension and a short-term CR. H.R. 601 then headed back to the House, where it passed on a 316-90 vote. All 90 NO votes came from Republican members.

 H.R. 601 - The CR and debt ceiling extension last through December 8.  The short-term 3 month FY 2018 CR continues funding for education programs such as Title I and IDEA at current 2017 funding levels. The initial Disaster Aid package included $7.4 billion for the Federal Emergency Management Agency’s disaster relief fund, $7.4 billion for Community Development Block Grants and $450 million for the Small Business Administration’s disaster loan program. 

Disaster Aid II - This week the House will to take up another disaster aid package to provide additional aid for Texas, Florida, Puerto Rico and the Virgin Islands. The $36.5 billion measure adds about $7.2 billion to the Administration’s request. The package provides $16 billion in flood insurance debt relief and $18.67 billion to a disaster relief fund operated by FEMA; $1.27 billion in food aid for Puerto Rico; and $576.5 million to help combat wildfires in California and other western states. It is billions of dollars below additional requests called for by lawmakers from hurricane and disaster affected states and territories. Some of those requests could be added when the bill moves to the Senate next week. 

CSF will be in Washington later this month working with the California delegation, the Senate Finance Committee, the House Ways and Means Committee, Members of the House and Senate and other Committees as Congress undertakes tax reform and considers infrastructure. CSF will continue to carry the message that school facilities play critical roles in disaster relief to Congress and the Administration as they assist states and damaged communities recover and resume local education programs and services for students in safe and well-functioning schools as quickly as possible.

 Tax Reform and FY 2018 Budget Resolution - The Administration and Congress are eager to start legislative work on tax reform. Congressional talks about tax reform will become more serious after Congress adopts a FY 2018 Budget Resolution with reconciliation instructions. Reconciliation provisions are necessary to open the door for passage of tax reform in the Senate with a simple 51 vote majority.  Congress is finally getting close to completing work on a FY 2018 Budget Resolution with the House and Senate nearing completion on separate Resolutions.

 Budget Act Cap - The short-term Continuing Resolution moves final FY 2018 funding decisions to December. Congress and the Administration need a bipartisan agreement to increase FY 2018 budget caps for defense and non-defense domestic programs to pass funding bills including Defense and Labor, Health and Human Services, and Education. Bipartisan budget negotiations will have to happen in December to address FY 2018 budget caps and FY 2018 funding including education, to extend the debt ceiling and to avoid a government shutdown. 

House FY 2018 Budget Resolution - The House Budget Committee passed a Budget Resolution (H. Con. Res. 71) that violates current budget law caps on defense spending by $72.5 billion. The House approved H. Con. Res. 71, which lays the budgetary ground work with reconciliation instructions for tax reform. The proposed House Budget Resolution would require Congress to cut at least $203 billion from entitlement programs over 10 years.

 Senate Budget Resolution - The Senate Budget Committee adopted a FY 2018 Budget Resolution with a one vote margin making room for tax reform by authorizing an increase of $1.5 trillion in debt over ten years. The Administration endorsed the proposed Senate budget plan which is said to balance the budget in 10 years, producing a relatively small surplus of $197 billion in fiscal 2027. The plan includes optimistic revenue projections and undefined spending cuts expected to produce trillion dollar savings assuming entitlement program cuts of almost $4.3 trillion with another $534 billion cuts from discretionary programs over 10 years. An analysis by the Congressional Budget Office projects that under the Senate plan the entire federal budget would actually show a deficit in 2027 of $424 billion - even after accounting for economic growth. The Senate Budget Resolution does include reconciliation provisions that would increase annual deficits by $1.5 trillion over the decade to accommodate tax cuts. The full Senate is expected to vote on the FY 2018 Budget Resolution the week of October 16th.

 The House and Senate will have to resolve the differences between the different Budget Resolutions. Despite conservative objections the Senate version is expected to prevail even though it projects an increase of $1.5 billion in the national debt to pay for a tax cut package over ten years.  

Administration Tax Reform Proposal - The Administration finally released its “tax reform” package which focuses primarily on tax cuts. The President’s plan proposes to reduce the number of tax rates while doubling the standard deduction for most Americans; increases the child tax credit by an unspecified amount; eliminates the alternative minimum tax; and gets rid of many itemized deductions, save for those for mortgage interest and charitable giving and some others. Critics argue the plan gives greater tax relief to the top taxpayers.  

On the business side, the plan calls for cutting the top tax rate to 20 percent from 35 percent. The plan would also bring the top “pass-through” business rate down to 25 percent from its current level of 39.6 percent. That is the top rate that sole proprietorships, partnerships, and S-corporations (meaning many small businesses) pay. It would also encourage businesses to bring back profits stashed overseas with a special rate cut. 

Economic Growth - The President argues that the plan will be paid for by economic growth. The United States has been growing at about 2 percent a year lately, below the historic norm. The President maintains the tax plan plan will produce growth of 3 percent – or more. 

Many economists project modest growth. Estimates range from 2.1 percent to 2.25 percent. The Committee for a Responsible Federal Budget estimated that the nine-page framework would equate to a $2.2 trillion tax cut, with $5.8 trillion lost to lower rates and other changes, and another $3.6 trillion recouped by eliminating deductions.

 Offsetting/Paying for Tax Cuts - The proponents of the President’s tax cuts plan to offset the massive tax rate cuts for individuals and businesses by eliminating scores of deductions and credits across the tax code. Major ideas that have floated as revenue raisers have run into resistance, such as a House GOP border adjustment proposal to tax imports and exempt exports which would have raised an estimated $1.2 trillion over 10 years. That proposal has lost support. A proposal to eliminate the deduction for state and local property taxes is meeting strong resistance, as is a proposal to repeal the corporate interest expense deduction. The tax committees might consider keeping those deductions around in limited form.

 Tax Extenders - Many tax extender provisions including, Qualified Zone Academy Bonds (QZABs) and energy tax credit bonds will be in play for extension or potential elimination to offset costs as the tax reform packages are assembled.

 Tax Reform Timeframe - The Administration will push hard for passage of its tax reform/cut proposal between now and December. Congressional Republicans share the Administration’s objective to cut taxes. The House Ways and Means Committee and the Senate Finance Committee will have to balance the goals of tax cuts/reform with what changes can be made to the tax code at what cost in revenues and resulting deficits. A critical question is what will be the greater priority cutting taxes or limiting the deficit.

 Administration Infrastructure Initiative - The Administration has called for investing $1 billion in our nation’s infrastructure under the following principles:

1. Make targeted federal investments.

2. Encourage self-help. Many States, tribes, and localities have stopped waiting for Washington to come to the rescue and have raised their own dedicated revenues for infrastructure.

3. Align infrastructure investment with entities best suited to provide sustained and efficient investment. The Federal Government provides services that non-Federal entities, including the private sector, could deliver more efficiently.

4. Leverage the private sector. The private sector can provide valuable benefits for the delivery of infrastructure, through better procurement methods, market discipline, and a long-term focus on maintaining assets.

The Administration has not provided detailed specifics for the President’s $1 trillion infrastructure package. The White House spending proposal would, “provide an infrastructure plan to support $1 trillion in private/public infrastructure investment,” including injecting $200 billion into transportation projects over 10 years, with the goal of creating $1 trillion worth of overall investment. Overall, the Administration plans to reach its $1 trillion target through a mix of new federal funding, incentives for private sector investment and expedited projects. The Administration plan also aims to speed up project delivery by eliminating or reforming regulations that can slow down projects.  

School Facility Needs Nationwide - The American Society of Civil Engineers estimates the need for $4.6 trillion in infrastructure investments over 10 years, with more than half of that sum currently unfunded. 

The 2013 Center for Green Schools Report State of Our Schools - The Report estimates that schools are facing $271 billion in deferred maintenance costs and that the cost to bring schools into good repair and to address modernization needs is $542 billion over the next ten years. These numbers are clearly beyond the capacity of state and local community resources.

 California School Facility Needs - Estimates are that $40 billion is required to build California’s new schools and to modernize old schools.

 Infrastructure Investment Alternatives - The Congressional Progressive Caucus introduced a resolution outlining the progressive alternative plan calling for investing $2 trillion over ten years, which it estimates would employ 2.5 million Americans in the first year to rebuild transportation, water and energy systems while also focusing on unsafe schools, homes and public buildings.

 School Infrastructure Legislation - CSF appreciates the leadership of Congressman Bobby Scott (D-VA) and Senators Jack Reed (D-RI) and Sherrod Brown (D-OH) in introducing comprehensive bills: The Rebuild America’s Schools Act (H.R. 2475) and The School Building Improvement Act (S. 1674) call for grants and bonds to finance the renovation, repair, and construction of public school infrastructure.

 Rebuild America’s Schools Act (H.R. 2475) - Key components of The Rebuild America’s Schools Act include investing $100 billion to create over 1.9 million jobs by addressing critical physical and digital infrastructure needs in schools. The bill would:

  • Create a $70 billion grant program and $30 billion tax credit bond program targeted at high-poverty schools with facilities that pose health and safety risks to students and staff.
  • Leverage federal, state, and local resources for an overall investment of $107 billion, creating over 1.9 million jobs based on an Economic Policy Institute analysis that each $1 billion spent on construction creates 17,785 jobs.
  • Develop a comprehensive national database on the condition of public school facilities; such a national database currently does not exist and would provide much-needed insight into the condition of our public schools.
  • Expand access to high-speed broadband to ensure that public schools have the reliable and high-speed internet access they need for digital learning.  

The School Building Improvement Act (S. 1674)

  • Provides competitive grants for school repair, renovation, and construction. These grants focus assistance on states and communities with the greatest financial need, encourage green construction practices, establish equitable access for public charter schools, contain state matching criteria, and outline permissible criteria for spending. Projects also require the use of American-made iron, steel, and manufactured products.
  • Provides $30 billion for Qualified School Infrastructure Bonds (QSIBs), $10 billion each for FY 2018 through FY 2020.
  • Expands Qualified Zone Academy Bonds (QZAB) for use on school construction.
  • Requires the GAO to report on projects carried out under the within two years after enactment with periodic updates.
  • Creates a comprehensive study of the physical condition of public schools at least once every five years.

CSF October Washington Trip - CSF members will be traveling to Washington on October 25-27 to meet with the California Congressional delegation, Congressional committees and staff to make the case for investing in school facilities as part of our nation’s infrastructure to advance student achievement and success.

CSF will be working with the Senate Finance Committee, the House Ways and Means Committee, Senators Reed, Brown, Congressman Scott and other Committees as Congress undertakes tax reform and considers infrastructure.

Thanks to all who support the work of CASH and CSF to build and modernize California’s schools and classrooms.

-Bob Canavan, CSF Federal Legislative Advocate

__________________________________________________________________________________

School Infrastructure, Hurricane Disaster Aid/Continuing Resolution/Debt Ceiling, and NAFIS Report

September 8, 2017

Congress is back this week. Members of Congress began the week facing the need to increase the national debt ceiling, no Budget Resolution, the beginning of Fiscal Year 2018 on October 1 without a single completed FY 2018 appropriations bill, the pressing need to address disaster relief for Texas and Louisiana, another Hurricane heading toward Florida, and calls for tax reform. The Administration further complicated the Congressional agenda by rescinding the Deferred Action for Childhood Arrivals (DACA) program affecting many young immigrants, unless Congress acts within six months.

School facilities and school programs in Texas and Louisiana are greatly affected by the aftermath of Hurricane Harvey. School openings are delayed. Damages to school buildings and facilities are still being assessed in Houston, Galveston, Beaumont, Port Arthur and other Texas and Louisiana communities. The Administration proposed, and the House quickly approved, a $7.8 billion disaster aid package as a first step in federal disaster aid assistance. Texas Governor Abbott estimated the total disaster could be in the $150-180 billion range. 

After the House passed the initial hurricane aid package, unexpected negotiations at the White House produced an agreement between President Trump and Congressional Democratic leaders leading to Senate passage of a larger bill containing more hurricane aid, a Continuing Resolution (CR) and an extension of the nation’s debt ceiling. The Senate voted 80-17 on Thursday, September 7 to pass $15.25 billion in emergency spending for hurricane relief as well as a debt limit suspension and a short term CR that both last through December 8. The legislative package (HR 601) then headed back to the House, where it was expected to pass despite opposition from the Republican Study Committee’s steering committee. 

The package (H.R. 601) includes $7.4 billion for the Federal Emergency Management Agency’s disaster relief fund, $7.4 billion for Community Development Block Grants and $450 million for the Small Business Administration’s disaster loan program. 

Senators voting NO on the relief package were: Sens. Bob Corker, R-TN; Steve Daines, R-MT; Michael B. Enzi, R-WY; Joni Ernst, R-IA; Deb Fischer, R-NE; Jeff Flake, R-AZ; Lindsey Graham, R-S.C; Charles E. Grassley, R-IA; Ron Johnson, R-WI; James Lankford, R-OK; Mike Lee, R-UT; John McCain, R-AZ; Jerry Moran, R-KS; Paul; Jim Risch, R-ID; Ben Sasse R-NE; and Patrick J. Toomey, R-PA. 

The bill returned on Friday to the House, which earlier this week overwhelmingly passed a straight hurricane relief bill without the CR and debt ceiling provisions. The expected opposition to the new provisions from conservative Republican members was offset by support from Democratic members when the House passed the hurricane aid, CR, and debt ceiling bill on a 316-90 vote. All 90 NO votes came from Republican members. 

The short-term 3 month 2018 CR continues funding for education programs such as Title I and IDEA at current 2017 levels. 

CSF and others will now work with Congress and the Administration to assist states and damaged communities as they work to resume local education programs and services for students as quickly as possible. A critical aspect of the effort will be ensuring that school facilities are safe and functioning. Federal disaster assistance should be available to support school facility repairs.

NAFIS School Facility Report: The National Association of Federally Impacted Schools (NAFIS) recently issued a report: The Foundations for Learning: The Facilities Needs of Federally Impacted Schools (click here to view the report). Data from the NAFIS Report survey identified a need of over $4.2 billion worth of ready projects that could modernize and improve the health and safety conditions of school facilities in federally connected school districts. These data cover 218 out of over 1,200 Impact Aid-recipient school districts. California schools districts are among the 218 responding NAFIS districts. Many of these school districts do not have the financial resources to address these school facility needs. Federally impacted school districts generally have fewer local resources for operational purposes due to the presence of tax-exempt Federal property. 

The NAFIS Report states, “School facilities matter. Research shows that school facilities directly impact students’ ability to learn – including academic achievement and truancy – the health of students and staff, and school finances. Shifting legal requirements and educational expectations also require school districts to invest in facility upgrades such as digital learning, early childhood and vocational programs, regulation related to health, the environment, and the Americans with Disabilities Act (ADA), state or local initiatives such as class size reduction, and increased security measures.” 

The NAFIS Report concludes, “School facilities matter. The status quo is inequitable and unsustainable. This survey data include over $4.2 billion worth of ready projects that could modernize and improve the health and safety conditions of school facilities. These data cover 218 out of over 1,200 Impact Aid-recipient school districts. As much need as is represented in this report, it represents the underinvestment of only a fraction of federally impacted school districts nationwide. Many essential construction projects are on hold due to lack of funds. The additional long-term costs of deferred maintenance are well documented. More troublesome than the economics of deferred maintenance is the impact on students. Additional funding is required to address the urgent and significant backlog of emergency and modernization needs for federally impacted schools. 

The Federal Government has a unique obligation to increase its commitment to students and taxpayers in these communities. As school districts are forced to wait to address outdated, failing, and unsafe facilities, the potential short- and long-term harm – in terms of exposure to unsafe learning environments and lost opportunities to build 21st century skills – is significant. Federally impacted schools and the students they educate deserve more.” 

Thanks to NAFIS for The Foundations for Learning: The Facilities Needs of Federally Impacted Schools report and the information it provides about the school facility needs in federally impacted school communities. The NAFIS Report highlights the difficulty federally connected school districts face in addressing school facility needs. NAFIS school district financial difficulties are compounded by the connections to federal properties. 

School Facility Needs Nationwide: The 2013 Center for Green Schools Report, State of Our Schools, estimates that schools are facing $271 billion in deferred maintenance costs. The report estimates that the cost to bring schools into good repair and to address modernization needs is $542 billion over the next ten years. These numbers are clearly beyond the capacity of state and local community resources.

California estimates are that $40 billion is required to build California’s new schools and to modernize old schools. 

School Infrastructure, Tax Reform: With the unexpectedly quick action on hurricane relief, short term CR and debt ceiling extension, Congressional talks about tax reform may become more serious as the Administration also calls for action on infrastructure this fall.  

School Infrastructure Bills: CSF appreciates the leadership of Congressman Bobby Scott (D-VA) and Senators Jack Reed (D-RI) and Sherrod Brown (D-OH) in introducing comprehensive bills, The Rebuild America’s Schools Act (H.R. 2475) and The School Building Improvement Act (S. 1674), calling for grants and bonds to finance the renovation, repair, and construction of public school infrastructure. 

CSF in Washington, D.C.: CSF members will be traveling to Washington in October to meet with the California Congressional delegation, Congressional committees and staff to make the case for investing in school facilities to advance student achievement and success as part of our nation’s infrastructure. CSF will be working with the Senate Finance Committee, the House Ways and Means Committee, Senators Reed, Brown, Congressman Scott and other Committees as Congress undertakes tax reform and considers infrastructure.

Thanks to all who support the work of CSF and CASH to build and modernize California’s schools and classrooms.

 -Bob Canavan, CSF Federal Legislative Advocate

_______________________________________________________________________________________________

School Building Improvement Act Introduction

July 24, 2017

This week, Senators Reed (D-RI) and Brown (D-OH) are introducing the School Building Improvement Act of 2017, which will provide a total of $100 billion in direct grants and school construction bonds over 10 years to help fill the $38 billion annual gap in school facility capital construction need. A 2013 Center for Green Schools Report, State of Our Schools, estimates that nationally schools are facing $271 billion in deferred maintenance costs. The Report estimates that the cost to bring schools into good repair and to address modernization needs nationally is $542 billion over the next ten years.  This is beyond the capacity of state and local community resources.  Federal support to help address school facility infrastructure improvements in California and every state is critical.  

The School Building Improvement Act would also create an estimated 1.9 million jobs, based on an Economic Policy Institute analysis that each $1 billion spent on construction creates 17,785 jobs. 

Californians for School Facilities is among the organizations supporting the School Building Improvement Act, which will be investment in school facilities in California and every state and our nation’s infrastructure.   

Key features of the School Building Improvement Act include: 

            - Providing competitive grants for school repair, renovation, and construction.  These grants focus assistance in states and communities with the greatest financial need, encourage green construction practices, establish equitable access for public charter schools, contain state matching criteria, and outline permissible criteria for spending.  Projects also require the use of American-made iron, steel, and manufactured products.

            - Providing $30 billion for Qualified School Infrastructure Bonds (QSIBs); $10 billion each for FY 2018 through FY 2020.

            - Expanding Qualified Zone Academy Bonds (QZABs) for use on school construction and raising the QZAB amount to $1.4 billion per year FY 2018-2020.

            - Requiring the GAO to report on projects carried out under the Act within two years after enactment with periodic updates.

            - Creating a comprehensive study of the physical condition of public schools at least once every five years.

            School Building Improvement Act 2017 - Full Bill Text

            School Building Improvement Act One-Pager

Senators Reed and Brown are asking fellow Senators to join as Senate co-sponsors.  CSF will contact Senators Feinstein and Harris to join with Senators Reed and Brown as co-sponsors.

 Thanks to all who support Californians for School Facilities and CASH efforts to build, renovate, repair and modernize Californians schools and classrooms.

-Bob Canavan, CSF Federal Legislative Advocate

_______________________________________________________________________________________________

School Infrastructure Bills in the Senate and House

June 13, 2017

Below are links to the draft bill text and a summary of Senator Reed’s Senate school infrastructure bill, tentatively titled, The School Building Improvement Act of 2017. The CSF delegation met with Senator Reed’s staff during our Washington, D.C. Advocacy trip in May.  

The School Building Improvement Act of 2017 will provide a total of $100 billion in direct grants and school construction bonds over 10 years to help fill a $38 billion annual gap in school facility capital construction needs. The bill focuses assistance on states and communities in the greatest financial need by providing a grant program and School Infrastructure Bonds, and improvements to the Qualified Zone Academy Bond program. The bond provisions are similar to the bond provisions in the Rebuild America’s Schools Act

Congressman Bobby Scott and other House Members held a well-attended briefing last week for House staff on the Rebuild America’s Schools Act. The Rebuild America's Schools Act of 2017 would provide $70 billion in federal grants for school infrastructure upgrades and another $30 billion in tax credits to support school construction and to high-speed broadband internet access as well as school construction. A summary of the House legislation estimates the bill would create 1.9 million jobs. 

The Institute of Education Sciences estimates that schools nationally would need $197 billion to be brought up to good condition. 

The introduction of The School Building Improvement Act in the Senate combined with the Rebuild America’s Schools Act in the House will put two strong school infrastructure bills in the mix when Congress begins discussing infrastructure investments later this session. 

-Bob Canavan, CSF Federal Legislative Advocate

School Building Improvement Act - Summary

School Infrastructure Bill Draft Text

_______________________________________________________________________________________________

President's 2018 Budget Proposal - Infrastructure Initiative

May 24, 2017

The President's budget propsoal, released this week, included the infrastructure plan linked below. The expectation is that real details, amounts, funding and purposes will be done by congress later this year or possible early next year. This is a start, but in its current form, not particularly useful for K-12 public schools.

Infrastructure Initiative Fact Sheet

__________________________________________________________________________________

CSF Update: School Infrastrucutre Investment

April 25, 2017

Funding 2017
Congress is returning from a recess this week. Despite efforts by House and Senate Leaders and the Appropriations Committees, a bipartisan spending deal is needed by Friday when the FY 2017 Continuing Resolution funding government agencies expires.  

Congress must pass either an Omnibus Appropriations bill or another Continuing Resolution to avoid a partial government shutdown and to fund government programs for the remainder of the federal fiscal year through September 30.  While no one in Congress is calling for a government shutdown, negotiations have been complicated by Administration efforts to secure additional funding for defense programs and partial funding for a southern border wall.  Budget talks continue this week with a very short deadline even as the Administration calls for another effort to repeal and replace the Affordable Care Act and plans to announce a tax reform plan.  It will be a major task for Congress to put together an Appropriations package to fund government agencies including Education and programs such as Title I and IDEA this week.  

Congress may have to pass a short-term one or two week Continuing Resolution to allow enough time to negotiate the final FY 2017 Omnibus funding bill or Continuing Resolution through September 30.  Once Congress completes work on FY 2017 funding, it will begin work on a FY 2018 Budget Resolution, and start work on tax reform which may lead to more specific discussions of infrastructure. 

National School Infrastructure Investment
CSF supports a national investment in our nation’s infrastructure, including our nation’s public schools.  The national need to modernize schools is extensive.  The 2013 Center for Green Schools Report, State of Our Schools, estimates that schools are facing $271 billion in deferred maintenance costs. The report estimates that the cost to bring schools into good repair and to address modernization needs is $542 billion over the next ten years.  This is beyond the capacity of state and local community resources. 

Federal investments through grants, tax credit bonds, low interest loans, and infrastructure banks to support state and local efforts to renovate, repair, modernize and build schools and classrooms will provide technology advanced, energy efficient, modern schools and classrooms to help prepare students for the 21st century workforce.  At the same time, school facility infrastructure investments generate local construction jobs.  

Successful Federal investments in school facilities include: Emergency School Repair grant program, Qualified Zone Academy Bonds, Qualified School Construction Bonds, and Build America Bonds.   

A School Renovation program passed in the Clinton Administration and administered by the Bush Administration at the Department of Education provided approximately $1.2 billion to help communities make emergency school repairs and renovations.  This urgently needed initiative helped states and thousands of local schools fix leaky roofs, correct faulty plumbing, heating, and electrical systems, and address other dangerous health and safety concerns in our schools, such as the presence of lead paint and asbestos in the classroom.  

Qualified Zone Academy Bond (QZAB) Program:  Provides tax credits in lieu of interest. QZABs are used for renovation and repair of schools and have been used successfully by school districts in California and every state since 1998.

Qualified School Construction Bonds: The American Recovery and Reinvestment Act (ARRA) increased QZAB authorization and created Qualified School Construction Bonds (QSCB) with more flexibility than QZABs and significantly more authorization.  QSCBs were used by school districts across the county to finance thousands of projects to build, renovate and repair schools, generating construction jobs in local communities. 

Build America Bonds: Build America Bonds were also authorized by the ARRA for use by state and local governments.  In some states, Build America Bonds were used effectively to finance school facilities.  

Recent Grant Legislation 

The 21st Century Green High Performing Public Schools Facilities (SMART JOBs): In the 114th Congress, Representative Maloney (D-NY) sponsored HR 5157 the 21st Century Green High Performing Public Schools Facilities (SMART JOBs) Act.  This bill requires the Department of Education (ED) to make grants to states for the modernization, renovation, or repair of public schools, including early learning facilities and charter schools. 

School Building Fairness Act: In the 114th Congress, S.1505 sponsored by Senator Schatz (D-HI) provided grants through the Department of Education for the repair, renovation and construction of public elementary and secondary schools.

 Rebuilding America’s Schools Act: In the 114th Congress, Representative Rangel (D-NY) and Senator Brown (D-OH) sponsored the Rebuilding America’s Schools Act which permanently extends the QZAB program, increases the QZAB authorization level to $1.4 billion and allows for construction, renovation and repair projects.  A local contribution requirement is reduced from 10% to 5 % which is critical for small and rural communities.  The Rebuild America’s Schools Act will be re-introduced in the 115th Congress. 

Government Building Private Activity Bond: H.R. 960 introduced in the House by Congressman Kelly (R-PA) would allow tax-exempt private activity bond financings for “qualified governmental buildings,” including: elementary and secondary schools, state college or university facilities used for educational purposes, public libraries, courts, health care facilities, public safety facilities, and government office buildings. The bill assumes that a governmental entity has ownership under federal income tax law, which may differ from state law title ownership. H.R. 960 provides a special $5 billion volume cap that would require issuers to submit an application to the Treasury Department for approval.  

California Investment in School Facilities – Proposition 51
In 2016 California voters approved Proposition 51, an initiative to invest $9.8 billion in bonds to assist the financing of new school facilities, modernizing school facilities, career and technical education programs, and community college facilities in California communities.  Additional federal support will supplement the resources provided by Prop 51 to meet California’s facility needs, which far exceed the resources of Prop 51. 

115th Congress Infrastructure efforts are beginning in the 115th Congress
The Administration has announced infrastructure as a priority.  Senate Democrats led by Minority leader Schumer (D-NY) are proposing a $1 trillion infrastructure bill, including $75 billion for schools that they say will create 15 million jobs.  House Democrats are working on a comprehensive bill to focus on school facilities including grants and bonds.

 CSF looks forward to joining efforts to advance federal investments in our nation’s infrastructure, including school facilities. Federal investments in our nation’s schools with state and local partners through grants, tax credit bonds, low interest loans, infrastructure banks and other financing initiatives will help renovate, repair, modernize and build schools and classrooms to provide technologically advanced, energy efficient, modern schools and classrooms. Most importantly, it will help California’s and our nation’s students achieve and succeed in the 21st century workforce while also generating local jobs.

-Bob Canavan, CSF Federal Legislative Advocate

_______________________________________________________________________________________________

CSF Update: Senate School Infrastructure

January 24, 2107

Senate Democrats announced a $1 trillion infrastructure plan to rebuild the nation’s schools, roads, airports, bridges, seaports, V.A. hospitals, and broadband network. 

Senator Schumer, speaking for his Democrat colleagues said, “Each day, too many students attend school in buildings so decrepit the pipes leach lead into their drinking water…” 

The Senate Democrats initiative would invest $75 billion in public school modernization through a formula program. The initiative also would also expand the Qualified Zone Academy Bond program. 

Strengthening America’s Public Schools $75 billion – Creating 975,000 New Jobs

        - Invest $75 billion to jumpstart public school modernization. The funds would be distributed on a formula basis to the public schools with the greatest and most urgent needs. Funding will ensure that school construction and modernization projects can get underway quickly without placing an undo financial burden on local taxpayers.

- Also reauthorize the Qualified Zone Academy Bond program and expand its use to help public schools located in economically-distressed and high-poverty communities invest in their school districts.

Californians for School Facilities has been working, and will continue to work, with the Senate sponsors of the Blueprint to Rebuild America’s Infrastructure. CSF also thanks Senators Schumer, Wyden, Brown, Nelson, Sanders, Leahy, Carper, Cantwell and other members for leading this effort.

Additional details to follow when they become available.

-Bob Canavan, CSF Federal Legislative Advocate

__________________________________________________________________________________

Article: Why the Definition of Infrastructure Should Include Public Buildings

The following article from ConstructionDIVE (Dec. 1, 2016) gives strong reasons why schools should be part of any comprehenisve infrastructure program: Read the Full Article.

__________________________________________________________________________________

Senate Finance Committee Extends QZABs

The Senate Finance Committee approved a $95 billion tax extenders package extending 52 expired tax provisions for 2 years, including the Qualified Zone Academy Bond (QZAB) program...click here to read the full update.

__________________________________________________________________________________

CSF Letters in Support of Bigger, Continuous, and Expanded
Federal Bonds

July 2015: Rebuilding America's Schools Act, S. 1753

              -CSF Letter to Finance Committee Chairman Hatch

             -CSF Letter to Finance Committee Ranking Member Wyden

May 2014: QZAB and QSCB Expansion and Extension

            -CSF Tax Extenders Support Letter

             -179D CSF Support Letter

November 2013: Rebuilding America's Schools Act

- H.R. 1629

- S. 1523

______________________________________________________________________________________________

Californians for School Facilities (CSF) was formed in 1998 to advocate for federal funding for school facilities and to educate Congress and the Administration regarding the importance of clean, safe and modern schools to benefit student academic performance and the workforce of tomorrow. Since that time, CSF has been successful in advocating for more than $1.35 billion in 2009 and $1.26 billion in 2010 in Qualified School Construction Bonds (QSCB) funding, $1.4 billion in Qualified Zone Academy Bond (QZAB) funding in 2009 and 2010 and $400 million in 2011, and $100 million for emergency repair and renovation for California schools.

CSF is now urging Congress to extend the QSCB and QZAB programs to pass school emergency repair legislation and requirements. CSF continues its involvement in issues related to E-Rate, the Americans with Disabilities Act, special education facilities and the resolve to carry out related federal requirements.

Your membership in CSF ensures that your district or business will be the first to hear of federal funding opportunities. We play an active role in discussions with the United States House and Senate Education leaders to continue and expand federal funding for California’s school facilities.

Contact

David Walrath
Executive Director

Phone: (916) 441-3300
Address: 1303 J Street, Suite 520, Sacramento, CA 95814
E-mail: dwalrath@m-w-h.com