Sara Mead, Progressive Policy Institute
September 12, 2002
No one denies that many schools' missions are compromised by decrepit and outdated facilities. But not everyone agrees on how to fix the problem. Favored by education lobbyists and many Democrats but largely opposed by Republicans, tax credit bonds - which enable schools and districts to invest in new buildings by paying the interest on school construction bonds via a federal tax credit for bondholders - have been punted back and forth on Capitol Hill in recent years. But while Congress argues, the Qualified Zone Academy Bond (QZAB), a small federal program launched in 1997 to pilot tax credit bonds, has been quietly helping needy districts with their school facilities. The Progressive Policy Institute's Sara Mead writes that, despite obstacles such as low funding, inadequate federal and state support for implementation, and resistance from educators and financiers unfamiliar with the concept, QZABs have become well established in most states. Though less helpful to charter schools and others lacking access to capital, QZABs have been a godsend to "small, rural and innovative" schools. Tax credit bonds are no comprehensive solution to school facility needs but Mead finds QZAB a promising partial solution. This 10-pager is available at http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=110&subsecid=134&contentid=250833.
