When President Donald J. Trump met with the Congressional Black Caucus (CBC) yesterday no one expected a game-changer. But the CBC did the President a huge favor by giving him a packet of legislation to consider including H.B. 922, introduced by rookie CBC members Dwight Evans (Pa.) and Donald McEachin (Va.).
Their proposal offers Trump an opportunity for a historic bipartisan policy breakthrough on infrastructure that would profoundly affect the quality of public education throughout the country. It doesn’t require tax hikes or federal borrowing. It merely encompasses a technical correction to maddening IRS bureaucratize that has unintentionally undermined K-12 school renovation for the last 31 years. The positive result will be huge. Some background:
{mosads}In 1986, Republican President Ronald Reagan and House Speaker “Tip” O’Neill (D-Mass.) put aside differences to enact the “federal rehabilitation tax credit” law. America’s decrepit building infrastructure threatened our future. But it took private capital to help fix.
The credits – equaling up to 26 percent of the qualifying modernization costs – could be earned on any building modernization project preserving the structure’s valuable federally recognized historic qualities. This ‘historic tax credit” financing spawned over 40,000 projects.
The Trump DC Hotel – a renovation of the Old DC Post office building – is one. But buried elsewhere in the IRS Code is that aforementioned governmental glitch known as the “prior use” rule. It perversely denies these vital credits for local school modernization projects. Like the Old DC Post Office, many local K-12 facilities are government-owned, originally constructed with public funds and deemed federally historic. But whereas the Trump Hotel project created a new use, a local school project self-evidentially keeps the same use. The “prior use” bureaucratize bars credits when the post-modernization use doesn’t change.
The real-world consequence to this anti-education bias? Denying localities access to historic tax credit financing increases their school modernization construction costs by 20 percent -40 percent depending on state law and market conditions. This infuriating legalize is only now being appreciated.
In 1995, a federal study shockingly revealed the average K-12 student in rural towns, suburban enclaves and urban neighborhoods attended an obsolete facility.
In 2008, candidate Barack Obama became the first president ever elected decrying the situation. As president, he asked the Democratically-controlled Congress to pass a proposal aimed at addressing these “crumbling…corridors of shame.” They refused.
By 2016, studies indicate nearly 40 percent of K-12 facilities were sufficiently aged to potentially qualify as “historic” under federal law. Renowned Virginia Tech Professor Glen Earthman quantified the educational tragedy: forcing children to attend rundown, dysfunctional, moldy facilities during their K-12 lifetime penalized them statistically by a loss of one year’s worth of learning. This situation demoralizes parents, students and teachers.
Every dollar saved locally on construction is a dollar available for investment in improving classroom instruction without raising local taxes or debt.
Many experts claim President Trump cannot keep his promise to modernize outdated local infrastructure through tax credits. But when it comes specifically to education infrastructure, these experts are wrong. H.B. 922 builds on an infrastructure tax credit already proven to work. It isn’t a cure-all. But many thousands of projects currently unaffordable to localities will become affordable. The economic activity generated, and jobs created, could be explosive.
The Census found that a majority of Americans don’t graduate from a university or a junior college. K-12 learning reminds the key educational variable in teaching job skills and instilling our societal values.
Rev. Martin Luther King wisely noted that because education is the great equalizer and “that’s why they make it so hard to get.”
America knows how to build stuff. Republicans last year promised to “remove legal roadblocks to public-private partnership agreements that…bring outside investment to meet a community’s needs.”
H.B. 922 does precisely that. It helps level the playing field as Reagan and O’Neill intended. By tapping in to President Trump’s business experience in this area, both parties can join together to do precisely what Dr. King had hoped: put our children and grand-children, the keys to America’s future, first.
Goldman is former chair of the Democratic Party of Virginia. Rozell is dean of the Schar School of Policy and Government at George Mason University.
The views expressed by this author are their own and are not the views of The Hill.