Rising construction costs hamstring Texas schools

Thoden said inflation costs for building materials are running at 8 to 10 percent annually, for which AGCA's price escalation estimates try to account when budgeting for building projects. School districts, too, are building inflation costs into proposed bond elections that cover construction.

Another factor influencing inflation is the effect of hurricanes - the 2005 hurricane season that spawned Hurricanes Katrina and Rita caused a spike in gas prices that resulted in significantly higher fuel fees for shipping construction materials. Labor - what Thoden calls a "finite resource" - is also being maximized by so many building projects using every available worker. The "crackdown on immigration" also contributes to the labor shortage since construction companies are heavy users of immigration labor.

The results are being felt in school districts throughout the state. Abilene ISD voters approved a $76.5 million bond issue in 2004, but found that for the final 10 projects the cost was $15.7 million more than what was budgeted due to rising construction and labor costs. The district is considering calling another bond election, part of the proceeds of which will be used to pay for the remaining projects.

Beaumont ISD could propose a $443 million bond election for a November vote, and discussed whether building the most expensive projects first would reduce the impact of inflation over time and thus save money.

It would take Galveston ISD almost $15 million to finish all projects promised to voters in the 2003 bond election, however, there's only $2.43 million of the bond money left for the work. Bond projects of the highest priority will cost $5.24 million to complete including those with safety implications, those required by law or those of critical need. Projects of lowest priority encompass those at the elementary school and expanding the baseball field's press box, which would cost the district $327,392 to finish.

In Bryan, school officials are weighing a 2008 bond election, and part of the funds would be used for projects under construction but not completed. Among the more than $500 million in projects the district will need in the next 16 years are several that were approved in previous bond elections. BISD officials say hurricane-inflated costs for construction caused overruns on some of those projects.