For over a year, various departments of the Massachusetts Treasurer's office worked diligently with the state legislature to craft and pass a responsible reform plan for the school building assistance program in Massachusetts. This reform plan pledges 20% of the state's future sales taxes as a dedicated revenue stream to pay down the existing $10.7 billion in debt, while creating a new authority charged with managing the cost and operations of the program in the future. On July 28, 2004, legislation was signed creating the Massachusetts School Building Authority ("MSBA") as a new independent public authority.
The passage of this legislation and the creation of the MSBA provide a solution that keeps the state's commitment to cities and towns, provides an ongoing revenue source for new school construction for our children, and presents a significant opportunity for new economic development. All promises made by the state will be kept - ensuring that hundreds of new schools across our state will be built.
Katherine Craven was the first to be appointed Executive Director of the MSBA. Understanding the financial complexities behind this reform, she promised to bring a great deal of experience and professionalism to the role of Executive Director.
Staff at the Authority has worked tirelessly to resolve a backlog of over 800 audits for local school building projects to resolve remaining payments which are owed to the community. Some of these projects have been occupied by students and teachers for over a decade without the Commonwealth or the municipality knowing what the proper reimbursements should be. By the end of 2006, MSBA has made over $3B in accelerated payments to communities long-awaiting school project payments from the state. The infusion of the Authority’s cash has helped many cities, towns and regional school districts with local operating budget shortfalls, lowering local tax rates, or using funds formerly tied up in school debt service for other local capital improvement projects.