It's easy to see why the construction industry is alarmed by the state's decision to suspend Department of Education reimbursements for some types of school construction. The roughly $300 million at stake is about a third of the $1 billion Pennsylvania school districts spent last year on building projects.
But the moratorium could be what's needed to open broader opportunities in school construction.
Only certain types of projects qualify for the so-called PlanCon funds, and the state share varies widely from district to district. The process itself is cumbersome and the funding formula arcane.
Critics note that PlanCon drives districts into choosing options more expensive than taxpayers need or want, since basic renovations like rewiring, replacing mechanical systems or new roofs don't qualify. Under PlanCon, it makes more "sense" to gut a sound building needing only upgrades — or abandon it altogether and start new.
So we think it's smart to impose a nine-month moratorium on PlanCon funding to review the program.
To be sure, fear that this may be the first step in killing PlanCon altogether is reasonable. Adhering to his "no tax increase" pledge, Gov. Corbett must resort to cuts somewhere to rein in the state budget.
But simplifying the PlanCon process could be a major step toward ensuring that scarce resources are used effectively and efficiently. And there is nothing in the meantime to stop districts from initiating new, more streamlined building projects on their own.
Moreover, the Legislature has renewed incentive to tackle the elephant in the room: prevailing wage. Under current law — passed in 1961 — all projects costing more than $25,000 must be bid with this requirement. In testimony before the House Education Committee last year, the Pennsylvania School Boards Association said that "flexibility" in the bidding process would help get more tax dollars into the actual classroom. This is what PSBA meant.
Having to pay the artificially higher wage adds as much as 20 percent to a public construction project, the Commonwealth Foundation estimates — costing school districts upward of $400 million a year.
In other words, unshackled from those higher costs, more districts would actually come out ahead, even if PlanCon money went away entirely.
That's something the construction industry should be cheering for. The Legislature failed to enact prevailing wage reform earlier this year. Perhaps pressure from school officials, and taxpayers who want what's best for districts without breaking the bank, will finally goad lawmakers to act.