OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-961
AN ACT CONCERNING CARBON -FREE SCHOOL REQUIREMENTS
FOR NEW SCHOOL CONSTRUCTION AND ESTABLISHING
OTHER SCHOOL CONSTRUCTION AND PUBLIC HEALTH
REQUIREMENTS FOR SCHOOL DISTRICTS.
AMENDMENT
LCO No.: 8591
File Copy No.: 240
Senate Calendar No.: 165
Primary Analyst: EMG 5/24/23
Contributing Analyst(s): ()
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 24 $ FY 25 $
Treasurer, Debt Serv. GF - Cost Significant Significant
CGB Resources of CT
Green Bank -
Cost
See Below See Below
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 24 $ FY 25 $
Local and Regional School
Districts
Potential
Revenue
Gain
See Below See Below
Explanation
The amendment strikes the underlying bill and its associated fiscal
impact.
The amendment results in significant costs to the state, including a
significant increase in debt service due to the expansion of the state’s
bond-funded school construction reimbursement program, the fund
capitalization requirements specified in the amendment, and
administrative costs associated with the Public Schools Solar Power 2023SB-00961-R00LCO08591-FNA.DOCX Page 2 of 5
Systems and Energy Efficiency Projects Financing Program. The
amendment also results in potential revenue gain for local and regional
school districts. These impacts are detailed below.
Local and Regional School Districts Impact
To the extent that local and regional school districts use the programs
established by the amendment, there is a revenue gain. The revenue
gain will vary based on the size of the project funded by the grant, but
could be significant. It is anticipated that a district would only choose to
use these programs if costs associated with solar and energy efficiency
projects were offset by the state grant funding created by the
amendment.
State Impact
Public Schools Solar Power Systems and Energy Efficiency Financing
Fund Capitalization and Program Implementation
The amendment establishes the Public Schools Solar Power Systems
and Energy Efficiency Financing Fund within the Connecticut Green
Bank and stipulates that such fund be capitalized by issuing revenue
bonds supported by solar power system and energy efficiency project
revenues and "twenty-five million dollars from the issuance of bonds of
the state or capital funds." No such revenue bond program exists under
current law or within the amendment itself. Likewise, no bonds of the
state are authorized for the purpose specified in the amendment, either
under current law or within the amendment itself.
To the extent the fund is capitalized, the amendment specifies various
eligibility requirements and uses, which would partially determine,
along with local district participation, the recipients of such loans and
grants. It also specifies that any "unspent balance of the twenty-five
million dollars from the issuance of bonds of the state or capital funds"
of the Public Schools Solar Systems and Energy Efficiency Financing
Fund "shall revert to the General Fund" in FY 53 (thirty years after
passage). To the extent such bonds are authorized and issued, but not 2023SB-00961-R00LCO08591-FNA.DOCX Page 3 of 5
spent, this represents a potential revenue gain to the General Fund in FY
53.
Administration of the fund and associated programs is expected to
require 6 employees at a total cost of salary plus fringe of at least $1.3
million from the resources of the Green Bank annually, as the
amendment does not specify that administrative costs of the program
could be paid from the resources of the fund. It is not anticipated these
costs would be incurred until and unless capitalization funds are
provided.
School Construction Program
The amendment is expected to result in an increase of state
reimbursements under the school construction program, and related
debt service payments, to the extent that the Public Schools Solar Power
Systems and Energy Efficiency Projects Financing Program increases:
(1) the number of projects sought and completed that are also eligible
for school construction reimbursement program, and/or (2) increases
the cost of projects eligible for the school construction reimbursement
program. Cost increases for school construction projects are anticipated
based on prevailing wage mandates, participation in workforce
development programs, and hiring of municipality-specific labor in
order to be eligible for the Public Schools Solar Power Systems and
Energy Efficiency Projects Financing Program.
The school construction program is funded using General Obligation
(GO) bonds, in two large tracts: priority list projects (i.e., larger projects
approved in legislation) and non-priority list projects. Non-priority list
projects currently include emergency items, such as fire or catastrophe
damage, leaking roofs, and code violations, as well as installation of
photovoltaic panels and wind generation systems.
The amendment would help finance school districts' solar panel
installations and other projects potentially eligible for the non-priority
list school construction reimbursement program, which is expected to
lead to an expansion in the number and amount of local district projects 2023SB-00961-R00LCO08591-FNA.DOCX Page 4 of 5
seeking reimbursement through the school construction program.
Priority list projects must be approved through legislation prior to
state reimbursement. The expanded costs of future priority list projects
will be shown when projects are considered in future legislation.
Specific costs for projects eligible for both school construction
programs, including the marginal increase from the requirements of the
amendment, can only be determined as project expenses are incurred by
municipalities and state reimbursements are sought and offered.
As of May 1, 2023, the unallocated bond balance available under the
school construction authorization is $586 million. The amendment is
expected to result in an increase in the use of GO bond funds for both
non-priority list and priority list reimbursable expenses, which would
expedite anticipated debt service from existing bond authorizations.
The amendment does not change GO bond authorizations relevant to
the school construction program. However, those funds are necessary
to support both priority list and non-priority list projects. The most
recent estimate by DAS indicated approximately $2.5 billion worth of
outstanding long-term liability for current grant commitments, to be
paid over the next several years.
1
The expanded use of current
authorizations through the non-priority list program will necessitate
increased bond authorizations for the program in the future, which will
increase long-term debt service costs. Likewise, expected cost increases
for school construction projects are expected to lead to greater
reimbursement levels, which will be paid through increased bond
authorizations resulting in increase in long-term debt service costs to the
state and increased revenue to participating municipalities.
The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely
for the purposes of information, summarization and explanation and does not represent the intent of the General
Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of
informational sources, including the analyst’s professional knowledge. Whenever applicable, agency data is
1
Source: 2022 Series F General Obligation Bonds Official Statement 2023SB-00961-R00LCO08591-FNA.DOCX Page 5 of 5
consulted as part of the analysis, however final products do not necessarily reflect an assessment from any
specific department.