By Fritz Edelstein and Tina Camba, USCM Summer Fellow
May 24, 2004

Despite budget cuts, especially operating budgets, being made by city government and school districts, there has been and is projected to be a significant increase in education construction spending over the next several years in both K-12 and colleges. Mayors are more and more involved in these matters, primarily K-12, because of their strong interest and need for partners in construction efforts to make schools centers of the community. The design and construction of new schools should be a part of a city's economic and community development plans. Mayors in numerous cities have and are playing a leadership role in connecting the schools with the community and local services as a result of the construction activity.

In 2003, the amount of construction by the nation's education institutions reached an all-time high even as other construction spending curtailed significantly. According to American School & University Magazine's 30th Annual Official Education Construction Report, school districts and colleges spent $48.1 billion on construction last year. This is almost a 20 percent increase compared to 2002 spending. It is projected that nearly $150 billion with be spent from 2004 through 2006.

This is a reversal of the slowdown in school district spending in 2002 that cannot be explained even though there continued to be an increase in school enrollment and demand for seats. In 2003, 61 percent of the construction dollars went to new schools as districts continued to scramble to find space to house the continuing influx of new students. Traditionally renovations, additions and modernization of school buildings made up the largest percentage of K-12 construction spending. It is anticipated that through 2006 some $89.8 billion will be spent on new school construction. That is 63 percent of what will be spent on school construction nationally.

The most active area of the country over the next three years in school construction are the states of Ohio, Illinois, Indiana, Wisconsin, Michigan and Minnesota. It is projected that $17.5 billion will be spent on K-12 construction in these states. These are not the states one would expect since they are not considered major population growth states. California, Arizona, Hawaii and Nevada are a close second projected to spend $16.9 billion. More than half the states (28) will be spending more on construction of new school facilities than additions and modernization. Elementary schools continue to be the primary facilities where construction spending is going (36 percent); high schools are 17 percent; and middle schools are 11 percent. With the increases in K-12 construction there have been gains over the past few years to close the gap between rising student enrollment and providing new seats. However, there is still a significant gap in many cities that is not solved with portable classroom units or construction.

For more information on school construction, click here for the proposed extension for Qualified Zone Academy Bonds that mayors have used for school modernization and economic development in their cities.