New Tax Law Boosts School Construction with Public-Private Partnerships. The Heritage Foundation Backgrounder No. 1463.

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This report describes a provision in a tax bill implemented in June 2001 that allows towns and cities to build public school facilities faster, better, and less expensively by forming public-private partnerships with qualified real estate investors and developers. Private sector investors can fund construction, then lease the facilities to public school systems at annual costs below the costs communities would incur if they built the schools themselves. Benefits of public-private partnerships include more timely school construction, lower costs through competition, and savings through maximum use of school facilities. Communities benefit from off-hour use of school facilities (e.g., for day care services, supplemental education programs run by private organizations, adult education programs, civic events, and religious events). Because the concept of public-private partnerships for school construction and ownership is flexible, various other innovative subcontracting arrangements could be devised to help address a community's educational and service needs (e.g., using the partnership approach to acquire state-of-the-art music facilities, to upgrade cafeteria kitchens, or to improve sports facilities). The report presents experiences with such partnerships in Canada, the United Kingdom, and the United States. It describes partnership schools as alternatives to smart growth restrictions.
Utt, Ronald D.
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