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Hard Lessons

The real costs of Michigan’s school construction boom

February 22, 2004 | By Mac McClelland
and Keith Schneider
Great Lakes Bulletin News Service

MLUI/Gary Howe
  Building new schools in undeveloped areas is encouraging Michigan’s unfortunate trend toward increasingly dispersed development patterns, according to a report by the Michigan Land Use Institute.

With its red brick exterior and aquamarine metal roof, Okemos High School in Meridian Township near Lansing makes an impressive statement about a growing suburb’s desire to educate children. Wide, bright halls link eager teenagers to comfortable classrooms wired for 21st century media; a spacious library draws students to rows of networked computers. Outside is a handsome football stadium, a soccer field with new stands, and baseball diamonds, tennis courts, and practice fields.

When it opened in 1994, $40 million Okemos High School was seen as a state-of-the-art facility that advances public education and better prepares youngsters for promising futures. The community raised property taxes 4.7 mills — roughly $500 annually for a $200,000 home — to pay for it.

But the school also prompted a host of questions in and out of Meridian Township not about whether a new high school was needed, but where it would be built. The consequences of that school location decision affected all of Meridian Township. Development proposals in Meridian Township have been endorsed or opposed based on the proximity to the high school and whether construction would increase or diminish the number of students. The construction of Okemos High School also influenced development patterns in other fast-growing communities in the mid-Michigan region.

Okemos High School, according to a new study by the Michigan Land Use Institute, was at the leading edge of a boom in school construction that is causing school districts to actively compete for students, and is reshaping the urban, suburban, and rural landscape in Michigan.
Encouraging an Unfortunate Trend
The Institute’s report, Hard Lessons: Causes and Consequences of Michigan’s School Construction Boom, is the first detailed assessment of how school construction decisions — whether to renovate existing buildings or build new schools on green fields — are made in Michigan, and their effect on development patterns. Hard Lessons reports the results of a joint project of the Michigan Chamber of Commerce and the Michigan Land Use Institute and aims to help school officials and community leader better evaluate the full cost of new school construction or renovation.  Hard Lessons also recommends changes in state policy that, if implemented, will capture the economic and cultural benefits of renovating older schools or building new ones in town.

Hard Lessons was prompted by the Institute’s observation that building schools in undeveloped areas might be encouraging Michigan’s unfortunate trend toward increasingly dispersed development patterns. Although its population is growing slowly, Michigan is one of the fastest sprawling states in the nation, according to a study by Michigan State University. The study also found that Michigan is consuming land for new development at a rate eight times faster than the increase in population.
Business and government leaders recognize that spread out growth patterns are increasing taxes and fees that pay for expanding infrastructure, hurting the cities left behind and diminishing the quality of life as open space and farmland are paved over. Hard Lessons concludes that Michigan is building ever-bigger schools ever farther out of town at a faster rate than most other states. A 2002 construction report by School Planning and Management, a national trade magazine, found that annual expenditures in the U.S. for school construction doubled since 1992. In Michigan they tripled.

A List of Lessons
Hard Lessons also notes that new school construction is raising tax, economic, and community stability issues with long-term consequences. Among our findings:

  1. New school construction is dramatically raising property taxes for Michigan homeowners and businesses and tripled related debt from $4 billion to $12 billion since 1994.
  2.  In 1995, the year after the passage of Proposal A, which tied school operating funds to student populations and halved property taxes, the state saw a 150 percent increase in the dollar amount of bond issues for school construction — from $499 million in 1994 to $1.25 billion. The state continues to spend more than $1 billion annually on school construction.
  3. Since 1996, districts built at least 500 new schools in Michigan and closed 278 older ones while the school age population grew by just 4.5 percent. Even though southeast Michigan will lose 1.5 percent of its school age population within 30 years, according to the Southeast Michigan Council of Governments, that region recently spent $6.2 billion on expanding or building new schools.
  4. In every case we studied, building a new school cost more than renovating an older one.
  5. School districts use spacious new schools to attract families with students. Last year Leslie school officials spent $11,000 on advertising, attracted 112 “outside” students — nearly 10 percent of its enrollment — and collected an extra $750,000 in state school revenues. It spent $20 million in 1999 to build a new, rural high school.
  6. The broader the public’s involvement in school construction decisions, the more effectively a school board develops long-term, less costly solutions.

Causes and Consequences
School construction decisions weave essential, almost indelible threads into Michigan’s economic and cultural fabric and help determine where families and businesses locate and whether those communities prosper or wither. But even as Michigan’s billion-dollar-per-year school construction boom roughly matches what the state spends on road construction each year, it leaves behind urban, older suburban, and rural school districts with stable or declining enrollments.

Although those communities often have out-of-date schools, they almost as often do not have citizens’ support for modernizing them or building new ones. And even as districts spent billions on hundreds of new schools in Michigan since 1995, accelerating a rush to settle rural regions, hundreds of other schools closed. Hard Lessons concludes that Michigan taxpayers and businesses are spending tens of millions of dollars on new schools in ways that weaken many communities and while stimulating inefficient development on farmland and open space.

There are three primary reasons for Michigan’s school construction boom:

  • Families frequently base their decisions on where to live on public school quality; Michigan’s modern highways significantly expand their choices.
  • State law gives school boards free rein in deciding where new schools are built.
  • State school finance laws tilt school boards toward building bigger, surprisingly lavish public schools at the edge of town.

Ten Recommendations
The state Superintendent of Public Instruction has exclusive jurisdiction over all aspects of school renovation, location, and construction. The state Legislature can also play a key role in school construction.  Hard Lessons urges the state superintendent and the state Legislature to implement the following policies:

The state Superintendent should:

  • Help school districts acquire better, more independent technical assistance when assessing the true needs for building new or modernizing old schools. Instead of merely selling a new, out-of-town school to residents, school boards must encourage the community to play a significant role in discussions about how best to provide better facilities, preferably in town.
  • Establish renovating existing schools as the top priority; constructing new schools in existing neighborhoods the next priority; and constructing new schools in farm fields the last resort. Schools must conserve land and reduce costs through more efficient site design, and sharing playing fields, athletic stadiums, and recreational facilities among different schools and the community.
  • Ensure that school districts provide safe routes to school so that kids can walk or bike to their classes and to after school activities.
  • Require districts to submit site plans to local, county, and regional planning commissions for review and comment to assure that they are consistent with local master plans.
  • Persuade districts to submit long-term construction and improvement plans to local governments for review and comment. School boards and local government should ensure that such plans are incorporated into community master plans.
  • Encourage districts to improve their system of assessing the condition and capacity of all school facilities by avoiding “free” feasibility studies from architects and construction managers and instead paying for independent assessments that provide truly accurate information about the costs of both renovation and new construction. These assessments must include a comprehensive comparison of the costs of building a new school versus renovating an existing one, including all short and long-range land, infrastructure, staffing, and transportation expenses.

The Legislature should:

  •  Require that whenever new construction is warranted, districts must build new schools where paved roads and storm water, sewer, and water service are either available or already planned for and financed.
  • Amend the Michigan School Bond Loan Program to strongly encourage schools to stay in existing neighborhoods.
  • Require school boards to submit much more rigorous analysis and technical justification for closing existing schools to the Michigan School Bond Loan Program in order to gain loans to build new ones. Currently, the program routinely approves applications that have scant justification for closing existing schools.
  • Provide additional financial incentives to upgrade school buildings to urban school districts to level the playing field with their suburban neighbors.

Mac McClelland, the former deputy administrator of Grand Traverse County, directs the Michigan Land Use Institute’s Neighborhood Schools Project. Keith Schneider, a journalist and editor, is deputy director of the Michigan Land Use Institute. Reach them at mac@mlui.org and keith@mlui.org.

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