Engineering Inc - September/October 2017 - 6

MARKETWATCH

K-12 Market Filled With Challenges,
But Still Growing
By Gerry Donohue

imilar to the overall state of the nation's infra2008 financial crisis and have yet to completely recover. As a result,
structure, the public school construction sector is while total construction put-in-place is back to where it was before
also plagued by huge need and limited funding.
the recession, school construction put-in-place is still 35 percent
Over the past two decades, the nation's 14,000
below its peak.
school districts, which serve more than 55 milSpending also varies dramatically state-by-state and district-bylion students in 100,000 public K-12 schools,
district. States in the South and West tend to spend more on their
have spent an average of $99 billion annually on
schools because they have higher rates of enrollment and stronger
their facilities, with $50 billion going to maineconomies.
tenance and operations (M&O) and $49 billion going to capital
According to the 2016 State of Our Schools report, enrollments
construction and new facilities, according to the 2016 State of
are expected to increase by 11 percent in the West and 9 percent in
Our Schools report.
the South from 2012-2024, led by Nevada (25.8 percent), North
According to the report, which was published by the 21st
Dakota (22.9 percent) and Arizona (21.2 percent). Enrollment
Century School Fund, the U.S. Green Building Council and the
growth will be below average in most Midwest and Northeast
National Council on School Facilities, school districts need to
states. Thirteen states will suffer enrollment declines, led by West
spend at least $145 billion annually to bring their facilities up to
Virginia with an 11.4 percent decrease.
modern standards, with $58 billion for M&O, $77 billion for
For 2012-2024, school districts in California are forecast to
capital construction and $10 billion for new facilities.
spend $17.06 billion on new school construction, followed by
That's where the limited funding rears its ugly head.
Texas at $13.83 billion and Florida at $7.59 billion. At the other
"A lot of districts are operating at a maintenance of effort [flat
end of the spectrum, among schools with projected enrollment
budget] level," says Brian Morgan, regional practice leader at KCI
increases, Missouri school districts are projected to spend $0.03
Technologies, Newark, Delaware. "As a result, there is deferred
billion, followed by Pennsylvania ($0.04 billion) and New Jersey
maintenance. We have a lot of catching up to do."
($0.09 billion).
Local taxpayers pay for most of the modernization and
One final factor is how much funding state governments
improvement of their schools. And there are a lot of them: The
contribute for capital construction. Hawaii has a unique stateaverage school building
is more than 44 years
10-Year Estimate for New School Construction, F.Y. 2012-2024
old, and many of
(Includes only states with projected enrollment increases between F.Y. 2012 and 2024)
the buildings built
(In billions of dollars)
$20
before 1980 may
contain hazardous
$18
$17.06
materials, such as
$16
lead in the plumbing
pipes or asbestos in
$13.83
$14
the insulation. Of the
$12
$1.26 trillion in capital
outlays from 1994
$10
to 2013, local school
$7.59
$8
$7.08
districts funded 81
$5.68
percent and the states
$6
$5.34
$4.76
funded 19 percent. The
$4.31
$4.02
$4
$3.18
$3.10
federal government
$2.95
$2.84
$2.79
$2.06
$2.04
contributes almost
$1.64
$2 $1.10
$1.05 $1.05
$0.94
$0.67
$0.38
$0.41 $0.43
$0.36
nothing to capital
$0.25 $0.10
$0.23
$0.13
$0.18
$0.12
$0.09
$0.04
$0.03
$0
improvements.
AK AZ CA CO DE FL GA HI ID KS KY MD MN MO MT NE NV NJ NM NY NC ND OK OR PA SC SD TN TX UT VT VA WA WI WY
State and local tax
Between 2017 and 2021, the education sector is projected to grow 4.5 percent annually. Population growth, a rebounding
revenues, however,
residential market and maintenance backlogs are driving that growth.
21ST CENTURY SCHOOL FUND
took a huge hit in the
6

ENGINEERING INC.

SEPTEMBER / OCTOBER 2017

Table of Contents for the Digital Edition of Engineering Inc - September/October 2017