OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
EMERGENCY CERTIFICATION
HB-5524
AN ACT AUTHORIZING AND ADJUSTING BONDS OF THE STATE
AND CONCERNING PROVISIONS RELATED TO STATE AND
MUNICIPAL TAX ADMINISTRATION, GENERAL GOVERNMENT
AND SCHOOL BUILDING PROJECTS.
Primary Analyst: MM 5/7/24
Contributing Analyst(s):
OFA Fiscal Note
State Impact: See Below
Municipal Impact: See Below
Explanation
The fiscal note below is divided into three sections: 1) one addressing
bonding changes; 2) another section addressing all other changes in the
bill; and 3) the last section dealing with school construction.
Section 1 - Bonding Sections
State Impact:
Agency Affected Fund-Effect FY 25 $ FY 26 $
Treasurer, Debt Serv. GF - Cost See Below See Below
Treasurer, Debt Serv. TF - Cost See Below See Below
Note: GF=General Fund; TF=Transportation Fund
Municipal Impact:
Municipalities Effect FY 25 $ FY 26 $
All Municipalities Revenue
Gain
See Below See Below
2024HB-05524-R00-FN.DOCX Page 2 of 20
Sections 1 to 66 - Bonding
Table 1 below summarizes the increases and reductions made to
General Obligation (GO) bonds and Special Tax Obligation (STO) bonds
in FY 25.
Table 1: FY 25 Increases and Reductions to GO and STO Bond
Authorizations (in millions)
Description FY 25 $
General Obligation (GO) Bonds
New Authorizations 372.4
Changes to Pending Authorizations -23.5
Reductions to Current Authorizations -40.2
NET TOTAL GO BONDS 308.7
Special Tax Obligations (STO) Bonds
NET TOTAL STO BONDS 111.6
Table 2 indicates the eventual total General Fund fiscal impact of the
bill, through debt service, if all GO bonds authorized by the bill for FY
25 are allocated by the State Bond Commission and issued by the Office
of the State Treasurer. If new authorizations are fully allocated when
effective, there would be a cost to the General Fund for debt service of
approximately $15.4 million in FY 26. The remaining debt service costs
identified in Table 2 would be repaid after FY 26.
The debt service associated with additional GO bond authorizations
that become effective after FY 25 are shown in Table 2 and discussed
further below.
2024HB-05524-R00-FN.DOCX Page 3 of 20
Table 2: Net GO Bond Authorizations and Estimated Total Debt
Service Cost (in millions)
Fiscal Year
Authorized
Authorization Amount
$
Total Estimated Debt
Service Cost
1 $
2025 308.7 441.7
2026-2031 547.0 782.6
TOTAL 855.7 1,224.3
1
Debt service estimates are based on market rates and repaid over 20-year terms.
Table 3 indicates the eventual total Special Transportation Fund
(STF) fiscal impact of the bill, through debt service, if all STO bonds
authorized by the bill for FY 25 are allocated by the State Bond
Commission and issued by the Office of the State Treasurer. If new STO
authorizations are fully allocated when effective, there would be a cost
to the STF for debt service of approximately $8.5 million in FY 25. The
remaining debt service costs identified in Table 3 would be repaid after
FY 26.
Table 3: STO Bond Authorizations and Estimated Debt Service Cost
for the Infrastructure Improvement Program (in millions)
Fiscal Year
Authorized
Authorization Amount
$
Total Estimated Debt
Service Cost
1 $
2025 111.6 179.1
1
Debt service estimates are based on market rates and repaid over 20-year terms.
Municipal Impact of Bonding Provisions
To the extent authorized bonds are allocated by the State Bond
Commission, the bill may result in a collective municipal revenue gain.
New authorizations for multiple other bond programs may also result
in additional revenue gain to various municipalities.
Bond Authorizations After FY 25
Sections 19-24 include bond authorizations where a portion of the 2024HB-05524-R00-FN.DOCX Page 4 of 20
funds becomes effective after FY 25 for the UConn 2000 program, as
shown in Table 4.
Table 4: GO Bond Authorizations After FY 25 (in millions)
Fiscal Year Authorized Authorization Amount $
2026 110.0
2027 107.0
2028 103.5
2029 101.5
2030 100.0
2031 25.0
TOTAL 547.0
To the extent these future authorizations are fully allocated, there
would be a total cost to the General Fund for debt service of
approximately $782.6 million after FY 25, as reflected in Table 2.
2024HB-05524-R00-FN.DOCX Page 5 of 20
Section 2 - Other Sections
The bill makes various other changes with fiscal impacts described in
some details below. Major fiscal impacts include:
Section Agency Fund Impact FY 24 FY 25 FY 26
110 Office of Policy &
Management;
State Comptroller
– Fringe Benefits
General Fund Cost - - $100,000
111 Resources of the
General Fund
General Fund Revenue
Loss
- - $400,000
111 Office of Policy &
Management
Youth Sports
Grant Account
Revenue
Gain
- - $400,000
118 Dept. of Economic
and Community
Development
General Fund Cost - $1.76
million
$1.76
million
124 N/A Transportation
Fund
Use of
Cumulative
Balance
At least
$500
million
- -
124 State Treasurer –
Debt Service
Transportation
Fund
Cost Savings - At least
$22
million
At least $60
million
143 - 145 State Dept. of
Education
General Fund Cost - $1.1
million
-
146 Office of Health
Strategy
General Fund Cost - $100,000
147 N/A General Fund Revenue
Transfer
-$110
million
$110
million
-
148 - 150 Various General Fund Adjust Carry
Forwards
-$1.5
million
$1.5
million
-
2024HB-05524-R00-FN.DOCX Page 6 of 20
Sections 67 and 68 authorize insurance premiums tax reaudits, which
results in a potential revenue gain to the extent these reaudits result in
additional deficiency assessments by the Department of Revenue
Services.
Section 69 changes income tax withholding requirements for certain
retirement income distributions and does not result in any fiscal impact
to the state or municipalities. Section 3 shifts the timing of receipt of
certain personal income tax revenue but not the overall amount due.
Section 70 results in a potential grand list reduction for various
municipalities beginning in FY 26.
1 This is associated with an increase
for the maximum allowable local option property tax exemption for (1)
farm machinery and (2) farm buildings. Section 4 increases the cap from
$100,000 to $250,000 for farm machinery and from $100,000 to $500,000
for farm buildings. This will only impact municipalities that have
adopted the additional exemption.
2 Under current law, the local option
property tax exemption for farm machinery is in addition to a state-
mandated farm machinery tax exemption of $100,000.
3
Section 71 allows municipalities to exempt between 5 and 35 percent
of the assessed value for certain owner-occupied real property. This
results in a grand list reduction beginning in FY 26 to the extent
municipalities choose to provide this exemption.
Any impact is dependent on what percentage of the assessed value
municipalities choose to exempt and the number of qualifying
properties within each municipality. There will be no impact to
municipalities that choose not to provide this exemption.
Section 72 allows taxpayers in Litchfield to receive tax exemptions
that they would have otherwise been eligible to receive if they had not
1
A grand list reduction results in a revenue loss given a constant mill rate. However,
it is likely that a municipality will adjust its mill rate to offset any predicted revenue
loss.
2
According to a 2019 survey, 30 municipalities offered these optional exemptions.
3
In FY 24, the farm and mechanics property tax exemption totaled $96 million of
taxable property across all municipalities cumulatively 2024HB-05524-R00-FN.DOCX Page 7 of 20
missed the filing deadline for such exemptions in certain years.
Depending on whether the payments have already been made, this
could result in a cost or revenue loss to Litchfield to reimburse such
taxpayers. It is anticipated that any impact would only occur in FY 25.
Section 73 allows taxpayers in Manchester to receive tax exemptions
that they would have otherwise been eligible to receive if they had not
missed the filing deadline for such exemptions in certain years.
Depending on whether the payments have already been made, this
could result in a cost or revenue loss to Manchester to reimburse such
taxpayers. It is anticipated that any impact would only occur in FY 25.
Section 74 allows taxpayers in Meriden to receive tax exemptions
that they would have otherwise been eligible to receive if they had not
missed the filing deadline for such exemptions in certain years.
Depending on whether the payments have already been made, this
could result in a cost or revenue loss to Meriden to reimburse such
taxpayers. It is anticipated that any impact would only occur in FY 25.
Section 75 allows taxpayers in Middletown to receive tax exemptions
that they would have otherwise been eligible to receive if they had not
missed the filing deadline for such exemptions in certain years.
Depending on whether the payments have already been made, this
could result in a cost or revenue loss to Middletown to reimburse such
taxpayers. It is anticipated that any impact would only occur in FY 25.
Section 76 allows taxpayers in Thomaston to receive tax exemptions
that they would have otherwise been eligible to receive if they had not
missed the filing deadline for such exemptions in certain years.
Depending on whether the payments have already been made, this
could result in a cost or revenue loss to Thomaston to reimburse such
taxpayers. It is anticipated that any impact would only occur in FY 25.
Sections 77 and 78 allows taxpayers in Waterbury to receive tax
exemptions that they would have otherwise been eligible to receive if
they had not missed the filing deadline for such exemptions in certain
years. Depending on whether the payments have already been made, 2024HB-05524-R00-FN.DOCX Page 8 of 20
this could result in a cost or revenue loss to Waterbury to reimburse
such taxpayers. It is anticipated that any impact would only occur in FY
25.
Section 79 allows taxpayers in West Haven to receive tax exemptions
that they would have otherwise been eligible to receive if they had not
missed the filing deadline for such exemptions in certain years.
Depending on whether the payments have already been made, this
could result in a cost or revenue loss to West Haven to reimburse such
taxpayers. It is anticipated that any impact would only occur in FY 25.
Section 80 allows Derby to defer implementation of a revaluation by
one year. This will shift out any fiscal impacts of the revaluation by one
year, to FY 27.
Section 81 allows Stratford to defer implementation of a revaluation
by one year. This will shift out any fiscal impacts of the revaluation by
one year, to FY 27.
Section 82 establishes the Connecticut Municipal Employees
Retirement Commission and results in a potential cost to the Office of
the State Comptroller beginning in FY 25 to the extent the Commission
makes budgetary requests to support its operations.
Section 83 allows a Municipal Employees Retirement System (MERS)
retiree who returns to work in a nonparticipating municipality to collect
their retirement benefit from MERS and earn credit towards the
nonparticipating municipality's retirement system, which results in a
potential cost to the municipality beginning in FY 24 for the actuarial
value of the credit earned.
Section 85 creates a municipal defined contribution (DC) retirement
plan which results in a one-time cost to the Office of the State
Comptroller in FY 26 to establish the plan, and an indeterminate fiscal
impact to municipalities beginning in FY 26 for matching contributions
dependent on the number of participating employees and the cost
differential between their current plan and the DC option. 2024HB-05524-R00-FN.DOCX Page 9 of 20
Sections 84 and 86 - 90 make several technical and conforming
changes related to Sections 82 – 83) that do not result in a fiscal impact.
Sections 91 – 109 make various technical changes with no fiscal
impact.
Sections 110 – 111 establish a youth sports grant program funded
with 2% of the state's sports wagering revenue, which results in the
following fiscal impacts:
Section 110 results in a cost of approximately $75,200 beginning in
FY 26 to the Office of Policy and Management (OPM) for one fiscal
administrative assistant position. There is also a cost of approximately
$30,200 beginning in FY 26 to the Office of the State Comptroller for
associated fringe benefits. This cost is associated with requirements in
Section 110 including determining eligibility and administering the
grants to distressed municipalities.
4
Section 111 requires that 2% of monthly state revenue from sports
wagering be deposited in the youth sports grant account the bill
establishes. This results in a revenue loss of approximately $400,000
annually to the resources of the General Fund beginning in FY 26, and a
commensurate annual revenue gain to the youth sports grant account
also beginning in FY 26.
There is a corresponding revenue gain to distressed municipalities
beginning in FY 27 associated with the grants administered from the
youth sports grant account. Any revenue gain is dependent on the
eligibility of the municipality and the amount of the grant awarded. The
annualized ongoing cost impact identified above would continue into
the future subject to inflation; the annualized ongoing revenue impact
identified above would continue into the future subject to fluctuation in
sports wagering revenues.
4
The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 41.25% of payroll in FY 25. 2024HB-05524-R00-FN.DOCX Page 10 of 20
Section 112 extends by 10 years the period when corporations may
carry forward a net operating loss deduction for corporation business
tax purposes, which results in a General Fund revenue loss estimated at
$2.8 million in FY 46 and $4.7 million in FY 47 and annually thereafter.
Section 113 permits, instead of requires, municipalities to establish a
simplified approval process to build a solar canopy and approve or
deny any land use application within a certain time period. Any impact
will be dependent on if a municipality chooses to participate in these
changes.
Section 114 limits property tax assessment appeals for which
applicants must file a property tax appraisal. This may result in an
increased number of property tax assessment appeals and a
corresponding cost to municipalities associated with this increase. LCO
5423 (Lines 134-141)
Section 115 does not alter bond authorization levels. The fiscal
impact depends on the use of other outstanding bond authorizations.
Sections 116 and 117, which require the Department of
Administrative Services to make certain amendments to the State
Building Code, results in no fiscal impact as the agency has the expertise
to accomplish this requirement within available resources. Section 116
requires the amendments to the State Building Code include changes to
encourage production of buildings that include safe housing and can be
constructed at a reasonable cost. Section 117 requires amendments to
the State Building Code to allow additional residential occupancies to
be served safely by a single exit stairway and requires the inclusion of
three-unit and four-unit residential buildings in the International
Residential Code portion of the Connecticut State Building Code.
Section 118 results in (1) an annualized cost of approximately $1.8
million to the state by establishing a pilot program to eradicate
concentrated poverty and (2) a potential cost and potential revenue gain
to various municipalities related this pilot program. 2024HB-05524-R00-FN.DOCX Page 11 of 20
Section 118 creates the Office of Neighborhood Investment and
Community Engagement (ONICE) within the Department of Economic
and Community Development (DECD) and requires ONICE to develop
10-year plans in the pilot program to eradicate concentrated poverty in
the four municipalities with the highest number of concentrated poverty
census tracts (Bridgeport, Hartford, New Haven, and Waterbury).
The establishment and administration of ONICE is anticipated to cost
DECD $1.1 million annually beginning in FY 25. This includes eight
positions at a total salary cost of $770,000 plus $313,500 in fringe benefit
costs and $10,000 in other expenses to administer the 10-year plans
under the pilot program. The bill restricts the use of bond funds to
support this cost, and no bonds are authorized or proposed for this
purpose. The bill is therefore anticipated to impact DECD’s General
Fund appropriations.
DECD will also be required to formally create the Office of
Community Economic Development Assistance (OCEDA) in order to
implement the provisions of this bill. The bill requires any participating
municipality in the pilot program to have a Community Development
Corporation certified by OCEDA. Under the bill, OCEDA must also
provide consultation to ONICE in the development of the 10-year plans.
The establishment and administration of OCEDA is anticipated to
cost DECD $698,000 annually beginning in FY 25. This includes five
positions at a total salary cost of $494,000 plus $204,000 in fringe benefit
costs. Current law permits the use of funds from the bond authorization
for OCEDA to support the administration of OCEDA, however no funds
have been allocated to date.
5
Section 118 also results in a potential cost to various municipalities
beginning in FY 28 to the extent they are brought to court by a
community development corporation for failure to carry out a
requirement. There is also a potential revenue gain to various
5
The current available bond balance for the Office of Community Economic
Development Assistance is $50 million. 2024HB-05524-R00-FN.DOCX Page 12 of 20
municipalities to the extent that they qualify for additional grants to
fund projects in poverty census tracts, public investment communities,
or alliance districts.
Section 119 creates a working group to address concentrated poverty
resulting in a potential cost to the Office of Legislative Management. To
meet the requirements of this section the working group may need to
hire a consultant resulting in a potential cost in FY 25.
Sections 120 - 122 make changes to the Office of Community
Economic Development Assistance, Community Investment Fund and
High Poverty-Low Opportunity Census Tract programs, which are
funded with General Obligation (GO) bonds. Future General Fund debt
service costs may be incurred sooner under the bill to the degree that it
causes authorized GO bond funds for these programs to be expended or
to be expended more rapidly than they otherwise would have been.
These sections do not change bond authorization levels.
Section 123 establishes an enhanced tax rebate under the JobsCT
program for businesses employing at least one new FTE that lives in a
concentrated poverty census tract. This results in a revenue loss of less
than $500,000 annually beginning as early as FY 28.
6
Section 124 establishes a cap on the FY 24 year-end cumulative
balance of the Special Transportation Fund (STF), wherein any
cumulative balance in the STF above 18% of FY 25 net appropriations
would be used to pay down outstanding Special Tax Obligation debt.
There is a possible initial payoff of at least $500 million in FY 25, which
is projected to result in a reduction of debt service in FY 25 of at least
$22 million, annualized to over $60 million per year in the out years for
up to 10 years.
Section 125, which limits the Department of Administrative Services
from including a higher education degree requirement for a position
6
Under the JobsCT program, rebates are provided beginning in the third year after the
qualifying job is created. 2024HB-05524-R00-FN.DOCX Page 13 of 20
classification unless certain criteria are met, results in no fiscal impact to
the state.
Section 126, which creates a working group to examine existing state
tax expenditures in order to simplify the tax code and identify
expenditures that are redundant, obsolete, duplicative, or inconsistent,
does not result in any fiscal impact to the state or municipalities. Section
60 specifies the administrative staff of the joint standing committee of
the General Assembly having cognizance of matters relating to finance,
revenue and bonding serve as administrative staff of the working group.
Section 127: (1) removes any provisions of a municipal charter that
prevents a municipality from sharing services, (2) permits collective
bargaining within service sharing agreements, (3) allows councils of
governments to make certain appointments, and (4) makes various
other changes to shared service agreements. Any fiscal impact to
municipalities is dependent on how these shared service agreements are
utilized.
Section 128, which restores the ability to apply historic homes
rehabilitation tax credits against a variety of taxes, does not result in any
fiscal impact to the state or municipalities. It does not alter the aggregate
$3 million cap on the amount of credits allowed annually, and current
projections (April 30, 2024, Consensus Revenue) assume full credit
utilization each fiscal year.
Section 129 exempts the town of Redding from paying any taxes or
benefit assessments to the district. This results in a savings to Redding
to the extent that the town is currently paying any taxes or benefits
assessments.
Section 130 has no fiscal impact by requiring the Department of
Economic and Community Development (DECD) to submit biweekly
reports on agency’s allotment of APRA funding. It is anticipated that
this requirement can be completed within the DECD’s existing
resources. 2024HB-05524-R00-FN.DOCX Page 14 of 20
Section 131, which relates to the scheduling of certain interscholastic
football games, has no fiscal impact.
Sections 132 - 136 allow municipalities to establish an ordinance to
authorize the use of noise cameras to determine violations for exceeding
80 decibels and require that violations of the ordinance result in fines for
second and subsequent violations. This results in a potential cost and
potential revenue gain to municipalities beginning in FY 25.
Any fiscal impact to municipalities is dependent on if they establish
this ordinance. There is a potential cost to municipalities associated with
the purchase and use of noise cameras or for entering into an agreement
with a vendor that provides noise camera services. There is also a
potential cost to municipalities for (1) a hearing procedure that is
required for citations issued and (2) sending citations by first class mail
as required in the amendment. There is also a potential revenue gain
associated with a $100 fine for a second violation, a $250 fine for
subsequent violations, and a $15 processing fee. Sections 132 – 136 allow
municipalities to use any revenue from these fines to pay for costs
associated with the use of noise cameras. This may partially offset any
cost to municipalities.
Sections 132 – 136 make presenting proof of passing a noise
inspection at a Department of Motor Vehicles (DMV) designated facility
an available defense to alleged violations. This results in a potential cost
to DMV to the extent it increases the number of required noise level
inspections.
The potential cost depends on the magnitude of the increase and
operational decisions to be made by DMV if increased capacity is
required. If the increase is minimal then no additional costs are
expected. Currently, these tests are conducted on a limited basis at a
single location (less than 50 per year conducted at the Wethersfield
branch). DMV is also undertaking a pilot program to establish noise
level tests at five emissions stations across the state, which is expected
to be completed by October 2024. The results of this pilot will inform
operational decisions and potential costs for additional noise 2024HB-05524-R00-FN.DOCX Page 15 of 20
inspections, as may be necessitated by Sections 132 - 136.
Section 137 results in a revenue loss of indeterminate magnitude
beginning as early as FY 26 and continuing through FY 56.
Section 138 temporarily reduces certain qualifications for a final
cultivator license to be granted resulting in a potential revenue gain to
the state to the extent additional final cultivator licenses are
granted. The fee for a final cultivator license is $75,000.
This section also creates a $500 extension fee if the licensee fails to
meet certain requirements by December 31, 2025, resulting in a potential
revenue gain to the state to the extent extensions are applied for and
granted.
Sections 139 - 140 makes various changes to the membership and
duties of the Social Equity Council (SEC) and requires the SEC to submit
reports on the performance and expenditures of the council. It is
anticipated that the SEC can accommodate these changes and
requirements within existing resources.
Section 140 also modifies the permissible use of funds from the
Cannabis Social Equity and Innovation Fund (SEIF) which may
potentially increase expenditures through the SEIF to the extent that
expenditures are undertaken that would otherwise be unallowable
under current law. Section 74 does not alter any appropriation available
to the SEIF.
Sections 141 and 142 repeal Sections 45 and 46 of HB 5523 as
amended by House "A" and thus eliminate the associated one-time
printing cost to the Department of Public Health. In its place, Sections
141 and 142 make a technical change that has no fiscal impact.
Sections 143 – 144 result in (1) a potential one-time cost in FY 25 of
up to $500,000 to the State Department of Education (SDE); and (2)
additional costs to SDE in FY 25 to provide grants to local and regional
school districts and potential costs to purchase artificial intelligence
tools for districts. 2024HB-05524-R00-FN.DOCX Page 16 of 20
The amendment requires SDE to (1) administer an artificial
intelligence education tool pilot program and provide grants to local
and regional school districts for this purpose; and (2) provide
professional development for educators regarding the artificial
intelligence tool.
It is anticipated that SDE will incur costs of up to $500,000 to hire a
consultant to administer the pilot program and provide professional
development. It is assumed that SDE will purchase an artificial
intelligence tool for this purpose, resulting in additional costs of $10 per
person.
Any SDE cost associated with providing grants to participating local
and regional school districts depends on the amount of grant funding
SDE chooses to provide, and the number of participants.
Section 145 results in a cost of up to $600,000 in FY 25 to the State
Department of Education (SDE) to develop a model digital citizenship
curriculum. It is anticipated that SDE will have to hire a consultant for
this purpose.
The bill allows SDE to receive grants or donations to fund this
requirement. To the extent this occurs, it would at least partially offset
the cost to the state.
Section 146 results in a cost of $96,000 to the Office of Health Strategy
(OHS) with an associated fringe benefits cost of $39,600 beginning in FY
25. The section increases OHS's financial monitoring responsibilities,
and an associate health care analyst is required to meet the provisions
of the bill.
The section also requires the executive director of OHS to contact
certain hospitals to determine potential need for state assistance, which
will result in a fiscal impact to the extent that state assistance is
provided.
Section 147 increases the General Fund transfer from FY 24 to FY 25
to $205 million total, which is $110 million more than budgeted in the 2024HB-05524-R00-FN.DOCX Page 17 of 20
FY 24 – FY 25 biennial budget.
Sections 148 and 150 increase a General Fund carry forward
appropriation to FY 25 of unexpended FY 24 funds in Section 501 of HB
5523 as amended by House "A" from $800,000 to $1,500,000 and alter
programmatic usage of the funds. The carry forward funds will be made
available to the Office of Policy and Management.
Sections 149 and 150 increase a General Fund carry forward
appropriation to FY 25 of unexpended FY 24 funds in Section 502 of HB
5523 as amended by House "A" from $1,500,000 to $2,300,000 and retain
the programmatic usage of the funds to be made available to the
Department of Social Services, for Community Action Agencies.
Section 3 – School Construction
State Impact:
Agency Affected Fund-Effect FY 22 $ FY 23 $ Out Years $
Treasurer, Debt
Serv.
GF - Future Cost See Below See Below See Below
Note: GF=General Fund
State Impact:
Agency Affected Fund-Effect FY 22 $ FY 23 $
Treasurer, Debt Serv. GF - Cost See Below See Below
Treasurer, Debt Serv. TF - Cost See Below See Below
Note: GF=General Fund; TF=Transportation Fund
Municipal Impact:
Municipalities Effect FY 22 $ FY 23 $ Out Years $
Various
Municipalities
Future
Revenue
Gain
See Below See Below See Below
Municipalities Effect FY 22 $ FY 23 $
All Municipalities Revenue
Gain
See Below See Below
2024HB-05524-R00-FN.DOCX Page 18 of 20
Explanation
Sections 151-201 – School Construction
These sections approve new priority list projects which result in state
grant commitments of $486 million for school construction projects.
Changes to projects previously approved have an additional net impact
of a $74 million increase to expected state payments or reimbursements.
Adjustments to current statutory requirements regarding various school
construction-related provisions represent a potential increase to state
payments and reimbursements of up to $429 million. New or increased
state reimbursements represent potential revenue gain for the specified
municipalities.
The grants-in-aid will be financed through the issuance of General
Obligation (GO) bonds in future fiscal years. These sections do authorize
additional bonds.
The sections also make several changes that may impact future
project costs and reimbursement levels, which in turn would affect
levels of state reimbursement and municipal revenue gain. These
changes include (1) increasing the reimbursement rate for early
childhood programs from five percentage points to fifteen percentage
points and (2) increasing the reimbursement rate for the capital costs of
full day kindergarten in priority school districts from ten percentage
points to fifteen percentage points. The impact of changes to costs for
future projects on the school construction priority list will be reflected
when such projects are considered by the legislature in the future.
These sections also expand the allowable uses for a school building
that received funding within the last 10 or 20 years, dependent on the
type of project, without needing to repay the state for a portion of the
project reimbursements. The fiscal impact is indeterminate, as it is based
on future municipal decisions.
School Air Quality
Sections 169 and 170 make several changes that expand eligible 2024HB-05524-R00-FN.DOCX Page 19 of 20
awards under the school air quality grant program, along with requiring
reconsideration of any unsuccessful applications submitted prior to July
1, 2024.
7
To the extent eligible organizations seek and are awarded funds for
projects under the expanded eligibility, this could result in both
potential revenue gain for school districts and increased or more rapid
use of state funds authorized for the program.
The program is primarily funded through General Obligation (GO)
bond funds.
8
Future General Fund debt service costs may be incurred
sooner under the stated provisions to the degree that it causes
authorized GO bond funds to be expended or to be expended more
rapidly than they otherwise would have been. Since April 2023, $225
million has been allocated for the program. An additional $150 million
of GO bonds become effective on July 1, 2024 under current law. These
sections do not change the amount of GO bonds authorized that are
relevant to the program.
The Out Years
The ongoing fiscal impact of school construction project and school
air quality projects reimbursements identified above will continue into
the future subject to project completion, successful municipal
application for reimbursement, and the costs of borrowing. All other
annualized fiscal impacts indicated above would continue into the
future, subject to inflation.
7
80 of 130 project applications were not awarded funding in FY 23. Awards for FY 24
are pending.
8
$75 million of American Rescue Plan Act (ARPA) funds were also allocated to the
program. 2024HB-05524-R00-FN.DOCX Page 20 of 20
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
consulted as part of the analysis, however final products do not necessarily reflect an assessment from any
specific department.