The depressed economy continues to have a major effect on all areas of business, including education. But as schools and universities trim staff, eliminate programs and cut operating budgets, capital- expenditure spending remains strong.
More than $41.5 billion worth of new, addition and retrofit construction projects were completed in 2001 by the nation's education institutions — a 14 percent increase over the amount spent in 2000 (see p. 24). Even more impressive is the record amount spent last year was during a recession, reflecting the intense need to add, improve and repair facilities.
And there are no signs that this robust spending on construction will slow anytime soon. For example, in the past couple of months:
The Cleveland (OH) school district announced it is embarking on a $1 billion construction program.
Four counties in the Atlanta area approved referendums that will bring in nearly $2 billion for school construction, renovation and equipment.
The Orange County (Fla.) school district is proposing a sales-tax referendum that would bring in more than $2 billion for school construction.
In California, lawmakers are preparing a proposal that would provide a total of $25.35 billion to help finance school construction and renovation.
In fact, spending on construction is projected to total almost $169 billion over the next three years. While school districts will do the majority of the spending ($108 billion), colleges and universities will complete close to $61 billion of construction projects.
Why is there so much construction going on during these difficult financial times? Among the reasons:
- Growing enrollments
There are more students attending the nation's schools and universities than at any other time in history. And growth will continue for school districts through 2006 and colleges for at least the next decade, resulting in tremendous demand for space.
- Inadequate, deteriorating buildings
The repair needs of education institutions continue to grow exponentially as the cumulative effects of deferred maintenance plague facilities, and developments in technology and security require building improvements.
- Increasing program demands
Schools today truly are becoming “cradle-to-grave” environments, encompassing space for pre-K students through senior citizens, and embracing more of a “community center” role.
The focus on education construction by state and local governments is a welcome sign. And, hopefully, will be the start of a serious attempt to address the facilities crisis faced by America's schools.
Amount spent in 2001 by education institutions on construction.
Amount schools and universities project to spend over the next three years on construction.
Percentage of school district construction dollars that will be spent on additions and modernization through 2004.
Type of new facility most often constructed by K-12 institutions in 2001.
Type of new facility most often constructed by colleges and universities in 2001.