PEABODY — When Peabody decided in 2002 to renovate its high school rather than build a new one, one of the driving factors was the uncertainty of promised state reimbursements.
In theory, the state would have paid for 60 percent of the estimated $86 million cost of a new building. But persistent backlogs in the reimbursement program and a state budget crisis left that promise uncertain. Mayor Mike Bonfanti said at the time he didn't expect reimbursement to start for a decade, if it started at all.
But yesterday, state Treasurer Timothy Cahill told officials from Peabody and other local communities that the state will make good on its promises — much sooner than expected.
Peabody expects a $10,200,000 reimbursement for the high school renovation.
"This program will take a lot of the pressure off of the cities and towns," Cahill said. "You won't have to worry about, 'Will the state be able to afford and finance this over the long haul?'"
Cahill visited Peabody High School yesterday to explain the reforms to the state's school building assistance program that the Legislature passed overwhelmingly earlier this year. Superintendents from Peabody, Beverly, Salem, and Danvers, among other local officials, paid close attention to Cahill's explanation of the program.
Under the new program, the state will pay for building programs out of a dedicated trust funded by setting aside 1 cent of the state's 5-cent sales tax. For the next three years, the state will not accept new building projects while it begins to pay off a backlog of projects running into the billions of dollars. After the three-year moratorium, the state will begin accepting new projects and will pay them off in full as soon as they are completed — rather than over 20 years as they do now, and without a waiting list.
"If you get accepted, you will get payment as soon as your project is finished," Cahill said. "There won't be any waiting list. If we approve 30 projects in 2007, we will be reimbursing 30 projects."
The faster repayment will help communities by letting them avoid borrowing money while waiting for state reimbursement, said Peabody Finance Director Patricia Schaffer.
"I think it's very favorable for the city of Peabody," she said.
Cahill came to Peabody at the invitation of state Sen. Frederick Berry, D-Peabody, one of the leaders of the legislative effort to approve the reform. Berry said the change would make a major difference to local communities.
"School building assistance was really getting out of control," Berry said. "I think we've made great progress in continuing this kind of support for our schools."