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.
As Amended by Senate "A" (LCO 8591)
Senate Calendar No.: 165
Primary Analyst: EMG 5/25/23
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 bill 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 bill, and administrative costs associated
with the Public Schools Solar Power Systems and Energy Efficiency
Projects Financing Program. The bill also results in potential revenue
gain for local and regional school districts. These impacts are detailed
below. 2023SB-00961-R01-FN.DOCX Page 2 of 5
Local and Regional School Districts Impact
To the extent that local and regional school districts use the programs
established by the bill, 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 bill.
State Impact
Public Schools Solar Power Systems and Energy Efficiency Financing
Fund Capitalization and Program Implementation
The bill 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 bill itself. Likewise, no bonds of the state are
authorized for the purpose specified in the bill, either under current law
or within the bill itself.
To the extent the fund is capitalized, the bill 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 Power 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 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 2023SB-00961-R01-FN.DOCX Page 3 of 5
million from the resources of the Green Bank annually, as the bill 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 bill 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 bill 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 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. 2023SB-00961-R01-FN.DOCX Page 4 of 5
Specific costs for projects eligible for both school construction
programs, including the marginal increase from the requirements of the
bill, 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 bill 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 bill 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 an increase in long-term debt service costs to
the state and increased revenue to participating municipalities.
Senate “A” eliminates the original bill and its associated fiscal impact,
and results in the impact described above.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the terms of any bonds issued for the
school construction program
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-R01-FN.DOCX Page 5 of 5
consulted as part of the analysis, however final products do not necessarily reflect an assessment from any
specific department.