$8.6 Billion - Not Enough For School Construction
Jack Spencer, chief executive officer of the Schools Construction Corp., told lawmakers that $5.7 billion of $8.6 billion initially promised by the state has already been spent and that by January 2006, the program will no longer have the funds to approve construction of any new schools.
Meeting the continued need, he said, will cost billions more -- including $2 billion just to cover one additional year of court-ordered construction work in 31 of the state's neediest communities. In these needy districts, Spencer said, New Jersey has so far approved $3.5 billion worth of schools or school repairs, including $433 million in design costs, or about 12 percent of the project totals, and most of the $479 million approved in project management fees so far.
Lawmakers endorsed plans to extend funding for the program beyond the $8.6 billion already earmarked for the initiative. But they were unsuccessful in getting a firm estimate from Spencer as to how much the program might ultimately cost. "I believe the figure to be in the billions," Spencer told the Assembly Education Committee. He said he will not have a more precise estimate until late next year, after school districts across the state have submitted five-year projections of the school building needs.
The Assembly panel endorsed legislation to set up a committee to review school program's needs and to suggest alternative financing methods. In addition, Sen. Ronald Rice (D-Newark) said he is sponsoring a bill that would authorize the state to borrow another $2 billion for the program in 2006 -- enough to keep it running for one extra year, Spencer said. So far the state has borrowed $3.4 billion for the program, which will cost about $250 million a year to repay over the next 20 years.