The Big Picture

The Big Picture

The "Great Recession" has had a significant impact on education institutions — and will continue to plague schools and universities for years to come.

The "Great Recession" has had a significant impact on education institutions—and will continue to plague schools and universities for years to come.

Administration and operations have been hit especially hard, resulting in drastic budget and program cuts, teacher and staff layoffs, deferred maintenance, and more. Although ARRA (American Recovery and Reinvestment Act) funding has helped stem much deeper operational and personnel cuts, this funding will end soon, leaving education institutions with the challenge of raising additional revenue to meet educational demands in a struggling economic and anti-tax environment.

Although operational budgets have suffered extensively, capital and construction spending have fared better. Many states and localities have had success in passing significant bond issues for capital outlay—and this is in addition to the availability of federal funding from various ARRA programs. Total spending on education construction is projected to drop to $36.7 billion in 2010 compared with $39.3 billion in 2009. However, it is projected to increase to $42.2 billion in 2011 and $49.5 billion in 2012.

There are a number of factors contributing to this:

  • K-12 and higher-education enrollments continue to grow—and are at historic highs. The school-age population will continue to flood education institutions at a record pace until at least 2018, requiring institutions to provide additional space to house this growth. Although some school districts in declining population centers (primarily urban and older suburbs) are closing schools because of budget and declining enrollment, many other institutions are experiencing rapid population growth and spending significant dollars on school construction.

  • Significant effort and monies still must be spent to provide safe and conducive environments for students. With the average age of the nation’s school buildings pushing 50 years—combined with decades of deferred maintenance—institutions must continue to upgrade, repair and retrofit facilities.

  • The rapidly changing learning environment requires continual investment in infrastructure and equipment to ensure students and teachers have the tools and functionality required for 21st-century learning.

  • Many institutions are investing in facilities and improvements to create sustainable, high-performance buildings.

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