THE REBUILD AMERICA’S SCHOOLS ACT 2019 (the Act) was introduced by Rep. Scott, Robert C. “Bobby” [D-VA-3]. Introduced 01/30/2019, passed the House 02/26/2019, currently in the senate.
For too long have our representatives relied on uninformed constituents to champion weak legislation that continues to promulgate disproportionate outcomes, providing guarantees to all but the people themselves.
The Rebuild American School’s Act of 2019 sounds good, but it’s insufficient for meaningful progress. Additionally, inclusion of debt in this policy works to favor private finance. We can build our institutions and our economy at the same time, its not a zero sum game. There are some excellent provisions in this Act, such as favoring domestic steel; which is important to me as a native Clevelander and important to our district. But I still think we can do better.
The face of the bill looks nice, $100 billion dollars, sounds big, too. This figure needs to be put in stark perspective to understand what this Act, actually does.
The 2019 bonus pool for 181,300 Wall Street employees was about $27.5 billion. This legislation is proposing $10 billion a year for all the public schools in the entire country. The $100 billion is scheduled for a period of 10 years; 30 percent of these funds are actually public debt repayable by the district issuing the bond.
The force of this legislation is not the $100 billion public investment over ten years, it’s the restatement of Section 54A of the Internal Revenue Code of 1986 that had been repealed by Public Law 115–97 for “school infrastructure bonds”. This bill is the re-introduction of a debt product.
The Federal grant funds are contingent on need and purpose, but will travel through the same state determined apportionment channels. A system that inherently must spread such benevolence, leaving the most vulnerable districts still competing with less resources. Need is also becomes contingent and subject to other priorities; such as proximity to toxic sites. Point: Schools that are toxic or hazardous need a separate emergency fund, with a separate process and specialized requirements. Including such projects in this already small fund dilutes intentions to get the job done.
Also, this legislation lacks any public private partnership that is beneficial to the spirit of the legislation, rebuilding public schools. In our capitalist economy, employers benefit the most from an educated population. Those benefits are translated into wealth; wealth that has accumulated disproportionately and has lost the economic velocity to lift the working class and maintain public institutions, such as public schools.
Also in our capitalist economy, debt is seldom a solution, whereas capital is always the answer. Carving out a small percentage corporate tax to sweeten this fund would have been harmless. The only public private anything I see in this legislation is a guarantee of future syndication fees for capital projects. Fees that will translate to millions of dollars in activities that are not really that
productive. We cannot afford to finance environmental improvements and climate change infrastructure in these traditional debt-driven ways, not in the long-term; we must innovate. To reiterate, we need to address environmental hazards separately and with greater urgency. We cannot tuck environmental policy away into bills such as this, we have to break this policy out separately and/or include in its provisions in a comprehensive environmental plan.
The Act includes a very common measurement tool of free or reduced price lunch. School lunch is a vital program and in need of innovation, but this program should not be also a good measure of need or poverty. For public schools to truly be America’s great equalizer. High-quality school lunches must be made available to all children.
As your Congressman, I will not hang my political hat on election season legislation that lacks ambition, courage and resolve.
What’s the solution here?
First, no debt. It is documented that schools fair differently with underwriters. This legislation could have at least provided regulation for fair-dealing. This program is to run for 10 years, these bonds will be serviced for decades. Additionally, this opens the door to many new, smaller charter schools to enter into complex debt obligations for infrastructure improvements for which they previously had no experience.
We know the infrastructure needs of our public schools is large, so it is best to break down the challenges and address them in a manageable manner for more meaningful results than simple short-term, project-based job creation; which ultimately becomes tempered by profit motive. Quarterly result, shortsightedness is not right perspective for institution building.
We need better targets. The re-building part of this Act spreads funding too thin to fully realize complete innovation. Whereas, if 100 districts were selected to receive $1 billion each, then maybe we would have created 100 new economic centers; that might be something on which you can hang your political hat, the creation of assets of great long-term value, debt-free; not this Act. Then after the proscribed program period, this Act needs provisions for program renewal, for another 100 districts.
I am not suggesting a move away from need-based funding entirely, but you can see how need-based funding gets decimated in bills like this; for example the geographical distribution of need. A measure that is effective for spreading benefit, but there are clearly concentrations of need in states that struggle to compete geographically within their own state.
My argument is we need legislation that is more ambitious and more dynamic, that gets the job done in a big innovative way. Structures for the next century, building things that last.
I believe in corporate responsibility and a stakeholder approach, one that is informed, ethical, and just as sensitive to social responsibility as it is to fiduciary responsibility. We must include social cost in the bottom line. Those costs are otherwise kicked down the road and become accountable to taxpayers and subsequent generations; such as funding social security.
My approach to public school infrastructure projects will be directly and fully rather than this bill’s supplement not supplant approach.
Tomorrow comes today!