Thank you for the opportunity to address the Committee in the context of the President's revenue provisions. Rebuild America's Schools recognizes the President's emphasis on education in his budget and revenue proposals. Leaving No Child Behind is the goal and objective of public education. We believe parents, school boards, educators, and community leaders in urban, rural and suburban school districts across America are committed to meet the President's challenge.

Rebuild America's Schools also supports the President's call for accountability. Schools boards, teachers, parents and students are ready to be accountable. But, as we call for greater accountability, we should also make sure that the students' workplace-where he or she is performing and being accountable-is a safe, modern learning environment.

We need to give students the classrooms that will help them succeed. A clean, safe, modern classroom is more likely to help a child succeed than a dark, overcrowded, hot or cold, under-equipped classroom built for the 1950's not the 21st Century.

We read an interesting parallel in the Wall Street Journal of March 19th about Treasury Secretary O'Neill's concern for safe working environments. Secretary O'Neill is quoted that his focus on worker safety and worker relations " …is a precondition for beginning to get people to believe that you care about them and that they matter as human beings." Our coalition asks what is the message we are giving to America's students if they are not provided clean, safe, up to date work environments in their schools?

Rebuild America's Schools thanks Congresswoman Johnson and Congressman Rangel for the leadership they are providing on the important issue of school facilities. Their "America's Better Classrooms Act" will give local communities a tool to finance modern schools to help students meet the President's challenge.

Rebuild America's Schools: $ 268 billion Necessary to Modernize Schools Rebuild America's Schools is a national coalition of education organizations, school boards and districts, PTAs, architects-- all helping local communities find the resources to give their children modern classrooms.

Rebuild America's Schools Coalition was organized in 1997 in response to the 1996 Government Accounting Office Study documenting the national cost to renovate and repair school building at $ 112 billion. Communities across the country knew they were struggling at the local level to find the resources to finance school repairs and renovations. The GAO study documented that schools in every state were in need of repair and modernization.

Since the GAO study in 1996 subsequent reports placed the estimates for school repair even higher. In 1999 the National Center for Education Statistics estimated repair costs at $127 billion. A study by the National Education Association projected the cost of renovating, repairing schools and building new schools, for rising student enrollments, to be $268 billion. This need was documented again in the recently released report of the American Society of Civil Engineers grading federal support for infrastructure. Schools again received the lowest grade, D-.

The American Institute of Architects estimates that thousands of schools- all across the nation in urban and rural schools are in desperate need of repair. Nearly, 60 percent of the schools need either new roofs, plumbing or heating systems, or electrical power and lighting systems. Many of these schools were built nearly 50 years ago and most cannot accommodate growing enrollments. The AIA also estimates that 36 percent of schools use portable classrooms. There are at least 16,000 portable classrooms in use in Florida. More than 2 million California school children attend classes in portable classrooms.

The need is real.

California: One State's Student Enrollments as an Illustration
The California Federal School Infrastructure Coalition supports Rebuild America's Schools. Cal-Fed has written to the Committee on this issue and I will use their information to illustrate one state's school construction situation. Every state faces the same problems to differing degrees.
The California Department of Finance estimates that California's student population will grow by an average of 37,653 pupils per year between 2000-2005. Currently, California has a K-12 student population of approximately 5,951,612 students. Projections are that by the year 2005, California will have a student population base of 6,134,412 students.

In 1998 California voters passed Proposition 1A that provided state funds for modernization and new construction. The state funding from the proposition requires a match from local school districts. The entire $2.1 billion has been apportioned to school districts and there is a pending project list totaling over $1 billion. These state funds were intended to last through 2002.

Despite this investment, the additional need for deferred maintenance and modernization in California over the next five years is estimated conservatively at $7 billion while new school construction needs are estimated to exceed $ 9.6 billion. To illustrate these costs, a 1999 estimate placed the cost of a 600-student elementary school at $7.75 million in California. A 1,000-student middle school would cost $13.75 million and a 2,000-student high school would cost $ 36 million if not higher. Many communities in California will have to build more than one elementary school, more than one middle school and more than one high school per year.

School districts and voters in California are struggling to provide the resources to meet these documented needs. Federal support does help. California has succefully used the Qualified Zone Academy Bond program (QZAB) to renovate, repair, and reform programs helping to create innovative and model schools.

As of January 2001 California has fully allocated the QZAB allocations for 1998, 1999, 2000, and 2001 totaling approximately $222,488,000. Local districts have requested an additional $85,000,000 for QZAB projects. Some of the successful QZAB projects include a Technology Academy in the Pomona Unified School District, the Center for Advanced Research and Technology in the Clovis and Fresno Unified School districts, and two Computer Certification Academies in the Baldwin Park Unified School District. An extension or expansion of the QZAB program would be quickly utilized in California and other states as well.

In addition to California, QZABS are being used in 23 of the 25 states represented by members of the Ways and Means Committee.

State and local governments are trying to provide the school facilities that will Leave No Child Behind. But, state and local resources cannot address the magnitude of the problem. There is a role for the federal government. The federal government supports transportation, and science--areas of national interest. Maintaining our public schools and providing students safe schools and classrooms is in the national interest.

Congresswoman Johnson and Congressman Rangel and members of this committee on both sides of the aisle have introduced HR 1076 the America's Better Classrooms Act. This bill will use an estimated federal investment of $2.7 billion over 5 years to leverage almost $25 billion in local school construction bonds. This is a frugal and wise investment.

In the 106th Congress 231 members of the House cosponsored the America's Better Classrooms Act. We expect a clear bipartisan majority of the House to again support this legislation. Providing students the decent, modern classrooms they need to learn and succeed is an issue that should unite members from both sides of the aisle.

As this Committee addresses the issue of tax reduction, Rebuild America's Schools believes Mrs. Johnson's and Mr. Rangel's bill provides local property tax relief. Local communities are constantly struggling to balance local tax rates with the need to modernize existing schools and to build new schools. The America's Better Classrooms Act uses a tax credit in lieu of interest to support local community efforts to finance school construction bonds. The interest saved through the Johnson Rangel tax credit over the life of the typical school bond will lessen the burden of local property tax necessary to finance the bond.

School Modernization Tax Credits: Local Decision Making

The school modernization bonds in the America's Better Classrooms Act provide a federal tax credit in lieu of interest. The responsibility for the bond principal is with the states and local communities. At the same time, all decision-making prerogatives related to the actual school renovation and construction remains a local community decision. The federal government provides an interest subsidy while leaving the decisions about the construction of the schools at the local level. The Johnson Rangel bill allocates the credits to the states through the Treasury Department. States then make sub-allocations to school districts. That is the extent of the federal involvement. Decisions about where to build, how to build and what to build are made at the local level.

Private Activity Bonds: One of a Menu of Options

The President has proposed private activity bonds as a means to address the nation's school facility problems. We appreciate that this proposal recognizes the need for federal support for local school districts. Private activity bonds, which require the participation of a developer, can be used by some school districts. Some school districts may be able to find such a partner. But, other districts will not. Many more will have difficulty finding the resources through their operating funds to pay the required lease fees. For example, in California, school districts do not have the revenue source to make lease payments to a developer constructing a school through private activity bonds.

Many rural schools will have difficulty finding a developer to build a school with private activity bonds. Rebuild America's Schools and Organization Concerned About Rural Education (OCRE) estimate that one out of every two public schools in America is located in a rural area or small town. Thirty eight percent of America's students go to schools in rural areas. Forty-one percent of public school teachers work in rural schools. Rural communities will have difficulty using the private activity bonds.

If combined with Mrs. Johnson's and Mr. Rangel's school modernization bonds private activity bonds could be part of a menu of federal options available to help school districts address their pressing school construction needs.

Conclusion

Rebuild America's Schools appreciates the attention the Ways and Means Committee is giving to the issue of federal support for local community efforts to modernize schools. The Committee included some components of the America's Better Classroom Act in the tax bill passed last year. Rebuild America's Schools asks the Ways and Means Committee to include the America's Better Classrooms Act school modernization bonds and the QZAB extension in addition to the private activity bond proposal in your education tax package this year.

Students need and deserve safe, modern classrooms to achieve the standards called for by the President.