OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
EMERGENCY CERTIFICATION
HB-7010
AN ACT CONCERNING THE AUTHORIZATION OF STATE
GRANT COMMITMENTS FOR SCHOOL BUILDING PROJECTS, THE
RECOGNITION OF GOODWIN UNIVERSITY AS A LOCAL
EDUCATION AGENCY FOR PURPOSES OF FEDERAL LAW,
CERTAIN EXCLUSIONS TO THE CALCULATION OF A SCHOOL
DISTRICT'S MINIMUM BUDGET REQUIREMENT, AND DELAYING
CERTAIN REVISIONS TO THE LAW REGARDING THE PROVISION
OF CONSTRUCTION MANAGEMENT SERVICES.
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 21 $ FY 22 $ Out Years $
Treasurer, Debt GF - Future Cost See Below See Below 636.4 million
Serv.
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 21 $ FY 22 $ Out Years $
Various Future See Below See Below 444.8 million
Municipalities Revenue
Gain
Local and Potential See Below See Below See Below
Regional School Savings
Districts
Explanation
The bill approves a total of $444.8 million in state grant
commitments for school construction projects, which represents
potential revenue gain for the specified municipalities. The grants-in-
aid will be financed through the issuance of General Obligation (GO)
Primary Analyst: EMG 9/30/20
Contributing Analyst(s):
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bonds in future fiscal years. The bill does not authorize new GO bonds.
The projected debt service cost to the General Fund to issue $444.8
million at a 5.00% interest rate for a 20-year term is $636.4 million.
The bill also allows certain COVID-19 supplemental appropriations
to be excluded from minimum budget requirements for FY 21 and FY
22, which results in potential savings to local and regional school
districts, as described in section 9 below.
The fiscal impacts of specific sections are detailed below.
Section 1 approves a total of $209.2 million in state grant
commitments for eight new school construction projects on the States
school project priority list. The total cost across these projects is
estimated to be $501.3 million, of which $292.1 million is anticipated to
be paid by municipalities.
Section 2 replaces the reimbursement rate for the Chamberlain
Elementary project, which was listed in the priority list in section 1,
with a 95% reimbursement rate. Given the estimated project cost, the
reimbursement rate change is expected to increase the state grant
commitment, and increase revenues to New Britain, by approximately
$7.7 million.
Sections 3 and 4 replace the statutorily calculated reimbursement
rate for emergency roof projects with a set 95% rate for two projects in
New Britain. Without these sections, these emergency repairs would
typically be eligible for the same rate as renovation projects. Assuming
approximately $2 million total cost for each roof project, these sections
would increase state grant commitments, and increase revenues to
New Britain, by approximately $307,200 for each project.
Section 5 approves a new project in Norwalk with total costs not to
exceed $189 million, regardless of any future increase in actual project
costs. At the 80% reimbursement rate set in the section, total state grant
commitment is anticipated to be up to $151.2 million. This estimate of
total state reimbursement would decrease if the project cost less than
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the $189 million allowed or if any costs incurred and reimbursed for
the project are for a natatorium or for site acquisition, as the section
also sets reimbursement for those aspects to a 50% rate.
Section 6 establishes a pilot program to allow commercial space to
be renovated as new for a school construction project in Danbury with
total project costs not to exceed $93 million. Total state grant
commitment is anticipated to be up to $74.4 million if all costs are
reimbursed at the 80% rate established by this section.
Section 7 approves a code-violation project in Tolland with
anticipated costs of approximately $1.8 million. Given the estimated
project cost and the 100% reimbursement rate established in the
section, this section is expected to increase state grant commitments,
and increase revenues to Tolland, by approximately $1.8 million.
Related projects at Birch Grove Primary School in Tolland were
approved in 2019 (PA 19-1 July Special Session).
Section 8 allows interdistrict magnet schools operated by an
institution of higher education or nonprofit to apply for and receive
eligible federal funds. The section also clarifies that any magnet school
operated by these entities would continue to retain eligibility for state
funds. Currently one institution of higher education, Goodwin
University, partners with a regional educational service center (RESC)
to operate two magnet schools. This section clarifies that if the magnet
schools governance structure is changed, the schools will retain
eligibility for state funds, which is not anticipated to result in a fiscal
impact to the State Department of Education or local and regional
school districts.
Section 9 allows districts to exclude from the minimum budget
requirement (MBR) any FY 20 or FY 21 supplemental appropriations to
pay for expenditures related to COVID-19 and federal funds received
under the CARES Act (P.L. 116-136), in the year after the additional
funds were received. This provision results in a potential savings to
local and regional school districts that receive such supplemental
appropriations, because in the absence of the bill these districts would
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be required to increase education funding in the subsequent year (FY
21 or FY 22), to reflect total prior-year appropriations. The exclusions
and resulting potential savings are available to all districts, including
the 33 Alliance Districts (which otherwise cannot lower the MBR
through reduction options available to other towns).
Section 10 suspends implementation of several changes to
contracting requirements for the school construction process through
June 30, 2021, reverting to prior practice until that time. To the extent
suspension of these changes alter the total cost of future projects, there
would be a proportional change to the states cost for school
construction reimbursements.
The Out Years
The ongoing fiscal impact identified in sections 1-7 and section 10
above will continue into the future subject to project completion,
successful municipal application for reimbursement, and the costs of
borrowing.
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 analysts 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.