Pennsylvania Gov. Tom Wolf put out his 2021 agenda yesterday. The third point from the top is “Invest in Public Infrastructure, Including School Buildings.”
It’s a predictable move. Wolf had already wanted to fix lead and asbestos in school buildings before the pandemic. To finance it, he wanted to increase money in the Redevelopment Assistance Capital Program (RACP). Plus there’s probably going to be some kind of money from the Biden administration for this purpose.
In his new agenda, he’s calling for school remediation and broadband funding to the tune of $1 billion. This is good news for districts like Philadelphia, where buildings are toxic.
In my ongoing fascination with the apparatuses involved in school funding, particularly school infrastructure, I thought we could take a little tour of RACP and Wolf’s plan.
What is it
RACP is a grant program in Pennsylvania’s budget office. It’s part of the laws around the budget, specifically itemized capital projects (specific large-scale expenditures).
When a budget gets made, you can set aside a certain amount of money for redevelopment assistance grants as long as they “have a regional or multi-jurisdictional impact, and generate substantial increases or maintain current levels of employment, tax revenues, or other measures of economic activity.”
This is all under the Governor’s purview initially, so he can propose to increase RACP funding by a billion dollars as part of his budget if he wants (though it has to get passed by the state legislature). The program started in 1986 and has been amended several times since.
The last eight amendments increased the funding of the program, the most recent of which was in 2010 (after that it was all decreases, even in 2019). Each time, there was an increase in the “the Commonwealth’s General Obligation borrowing authority” for the program.
The means RACP is debt funded. The state issues bonds for the capital projects to get money, probably through the Department of Community and Economic Development (since it’s their application you fill out if you want the money). This is the same Department that houses the Commonwealth Financing Authority and a ton of other cash spigots.
How it works
Let’s say you want a RACP grant for fixing up your school. Your project has to get a line in the capital itemization part of the yearly budget, and then the state legislature has to approve the budget.
Death-drive Republicans continue to hold both houses. So we’ll see how far Wolf’s proposal actually goes. He didn’t get a chance to really test the boundaries since COVID hit after he announced his agenda.
Here’s a fun chart showing the process around passing and then applying for RACP funding (and then reimbursing it). Notice that first arrow where the itemization gets enacted.
Who’s gonna use it?
The recipient in this case is the school district. When it comes to Philly schools, the district would apply for grants.
It’s not clear how initiatives like Fund Our Facilities fit into this picture, since it relies on legislation drawing from different funding sources (including fracking tax revenues). In their recently updated material, they haven’t specified where this money is going to come from.
Maybe they knew the Governor was going to keep pushing for more RACP money? And given the Biden administration’s relatively generous approach to pandemic relief, the money for Pennsylvania will pay for the bonds issued? In this case, the state would be the entity taking on the debt, passing along a grant to the district, and refunding the bond issuance. We’ll see.