UCF building slowdown?
Lawmakers want 1-year freeze on new construction at colleges
TALLAHASSEE — The construction cranes that perennially dot the University of Central Florida’s campus have earned it the moniker “Under Construction Forever,” but the Legislature could soon slow the school’s building boom.
House leaders are considering a one-year freeze on new construction projects for universities and colleges.
“Why don’t we fund everything we already made a commitment to?” said Rep. Carlos Trujillo, RMiami, chairman of the House budget committee, said during a meeting last month. “Let’s take a year off.”
Ongoing projects such as the UCF downtown campus would not be affected, but the brief moratorium could put a dent in UCF’s shortterm building plans.
More worrisome is the long-term trend of how university construction projects are funded and the lack of other options to fund buildings, said Dan Holsenbeck, UCF director of governmental relations.
“I don’t think there’s going to be a lot of money” for such work, Holsenbeck said.
The problem is that the growth plans of colleges and universities are outstripping Florida’s revenues
“There’s growth ... there’s pent-up demand ... and the tax revenues available aren’t going to meet the demands.”
Dan Holsenbeck, UCF director of governmental relations
dedicated to such projects.
UCF wants to expand its nursing program in the Medical City area at Lake Nona — plans that would involve multimillion-dollar projects over several years.
Valencia College also wants a new building at its Lake Nona campus, where its existing building is struggling to house the 5,000 students there. A bill filed by Rep. Rene Plasencia, R-Orlando, asking for $34.4 million for the project, however, was filed in error, school officials said. That price tag is for the whole building, and the school only wants $3.5 million to begin the planning process next year.
Securing money for those projects is likely to be difficult in the years ahead if the Legislature sticks to its recent history of not borrowing money through bonds to pay for school construction.
“We would hope that within good debt management that the governor and the Legislature would bond PECO,” Holsenbeck said.
Holsenbeck was referring to the Public Education Capital Outlay, the main funding source of construction projects for universities and colleges that also helps pay for K-12 school buildings. State economists project $343.4 million in PECO funds will be available next year, about half the amount allotted for the current year. About $200 million is typically set aside for maintenance, leaving little for new projects.
Part of the reason PECO funds are short has to do with Gov. Rick Scott’s aversion to debt. Lawmakers used bonds to borrow money for school construction projects for at least 19 straight years before Scott came into office in 2011.
In the seven years since, the Legislature has approved bonds for such projects in only one year. If bonds could be purchased for fund projects next year, $2.6 billion would be available instead of $343.4 million.
The other reason is how the construction projects are funded. PECO revenues largely come from a 2.5 percent charge on electricity and gas utilities, as well as taxes on communication services such as cable and satellite television, landlines and cellphones.
Because of changes in technology, that revenue source is expected to grow at a tepid 2 percent per year during the next 10 years.
Landlines are quickly joining faxes and beepers in going the way of the dinosaurs. More consumers are dropping cable packages in favor of video-streaming services, and energy efficiencies mean consumers don’t have to use as much electricity in their homes.
But the need for space at Florida’s 12 growing universities is not expected to diminish anytime soon. Holsenbeck said UCF needs to grow its program to produce enough nurses to meet the needs of rapidly growing Central Florida.
One of the factors universities are judged on in national rankings and in performance funding by the state is the amount of faculty per student and quality of facilities. Because of the halt on borrowing, many schools have not been able to build as quickly as they would like.
“There’s growth in all those areas; there’s pent-up demand in all those areas, and the tax revenues available aren’t going to meet the demands,” Holsenbeck said, adding that he did not mean lawmakers should raise taxes.
Legislators, though, are eager to pay down state debt and are not looking to change how college buildings are financed. In the past six years they have used an average of $177 million each year from the state’s general revenue to supplement PECO funds to help pay for new construction.
For Trujillo, the answer is to take a year off from approving anything new.
“If you look at the out years, even if we don’t add additional projects, we have so many projects that we spend money on — engineering and architectural and surveying plans — that we never will have the money to actually break ground and develop the buildings,” Trujillo said.