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School Construction Spending in North Carolina by Charles D. Liner IN 1981 THE ESTIMATE of total school construction ings and improving school facilities. Counties, which needs in North Carolina was $1.8 billion. Over the next are responsible for financing school construction, were twelve years, the state and its school systems actually then suffering from a severe economic recession and spent more than $3 billion on school construction and had to pay historically high interest rates if they bor- other capital needs.' Despite these expenditures, the rowed money to build schools. They had received no 1993 estimate of school construction needs stood at state money for school construction since funds from $5.6 billion. a 1973 state school construction bond were exhausted. a After twelve years and $3 billion, how well have In 1981 school units reported that they needed a North Carolina's counties and their school systems suc- total of$1.8 billion to meet their long-range needs for ceeded in meeting their previously stated needs for building school facilities.2 This seemed a staggering school construction? sum at a time when all units together were spending This article looks at changes in reported school $100 million a year or less for school construction, and construction needs and at North Carolina's efforts to when enrollment was declining in almost every unit. meet those needs.It focuses on the role of state money in Unlike some earlier surveys that had asked local helping counties meet their school construction obliga- school officials to estimate only their most critical tions and on the state's efforts to assist the poorest coun- needs, the 1981 survey asked them to estimate their to- ties in meeting their needs. It also examines the choices tal needs for providing "attractive, safe, and functional that counties have made to spend,save,and borrow. facilities" for their students.3 Apparently the schools were far from meeting that standard—more than half The Explosion in the total amount was needed to replace temporary and p obsolete buildings. Citing these needs, the state school School Construction Needs board in 1981 unsuccessfully petitioned the General During the early 1980s, North Carolina faced a Assembly to put to the voters a $600 million state daunting problem in replacing obsolete school build- school bond issue. and reno%aeon and(3)furnishings and equipment averaged 95.6 percent of The author is an Institute of Government faculty member who spe- total capital ouda%. However.not all purchases of furnishings and equip- cializes in public finance, including public school finance. This article is ment are ate sated with construction and renovation. reprinted from Popular Government 60 (Fall 1994): 30-43: it was pub- : \,,nh Carolina Department of Public Instruction.Public School lished under the title "Twelve Years and $3 Billion Later: School Con- Fa(i r\ ,1. m .Forth Carolina(Raleigh.N.C.: NCDPI.Jan. 1981). struction in North Carolina." liar_ Phillips (state superintendent of public instruction). 1.The figures on construction spending cited in this article include Puhli, .,.i fit,din .Needs in North Carolina, 1984-85(Raleigh.N.C.: not only spending for actual construction but also purchases of furnishings. NCDPI. \ I OS4). The 1981 survey did not specify the time period for equipment, and other capital needs. which are all counted together as e+umate, ,.) Ionr_-range needs. This was true also of the 1984 and 1986 "capital outlay." ,un e\. I he 198m and 1993 surveys asked specifically for needs during Figures from the Department of Public Instruction on statewide the nect ten%ear,.as prescribed by the 1987 School Facilities Finance.pct. capital spending show that from 1989 to 1993 spending on(1)construction G. S. I I;C-�-1.