There is no shortage of interest among education institutions looking to capitalize on the $22 billion in tax credits available over the next two years through the Qualified School Construction Bond (QSCB) program, which is part of the American Recovery and Reinvestment Act signed into law in February.
The program is accelerating interest in facilities improvement, and spurring construction plans and proposals at education institutions nationwide. The money saved by schools through the use of the credits is substantial, and administrators are working diligently to ensure they get their piece of the QSCB-program pie. Some states are looking to pool resources to sell their allocations; at least one held a lottery to determine which districts will receive the tax credits.
California recently announced the results of a lottery to determine which institutions would receive a share of more than $700 million in QSCB tax credits, as more districts applied than credits were available. The state's 11 largest school districts already received $582 million of the $1.35 billion total the state was allocated for 2009. Even though the state is among the most adversely affected by the current economic climate, education construction remains a priority — and officials see the program as a way to jump start construction, stimulate the economy and create jobs.
Alabama, Tennessee and Virginia are looking to pool financing to sell QSCBs, hoping that economies of scale will enable them to reach the bond markets less expensively. Other states and institutions are going the more traditional route of identifying capital needs and preparing bond issues — using the savings their QSCB allocations will bring as a selling point.
In addition to QSCBs, billions of dollars are available for construction and school improvement via the State Fiscal Stabilization Fund; Energy Efficiency Grants; Build America Bonds; Qualified Energy Conservation Bonds; and more — enabling education institutions to fund much-needed facilities repair, renovation and improvement.