OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

sSB-12

AN ACT AUTHORIZING AND ADJUSTING BONDS OF THE STATE FOR CAPITAL IMPROVEMENTS AND OTHER PURPOSES.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 19 $

FY 20 $

Treasurer, Debt Serv.

GF - Cost

See Below

See Below

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 19 $

FY 20 $

Various Municipalities

Revenue Gain

See Below

See Below

Hartford

Precludes Cost Savings

See Below

See Below

Explanation

Table 1 below summarizes the increases and reductions made to General Obligation (GO) bonds in FY 18 and FY 19:

Table 1: FY 19 Increases and Reductions to GO Bond Authorizations (in millions)

Description

FY 19 $

General Obligation (GO) Bonds

Authorizations

8.5

Reductions to Existing Authorizations

-40.0

TOTAL GO BONDS

-31.5

To the extent that the reduced bond authorization otherwise would have been allocated and spent, the bill has the potential to slightly lower debt service costs after the biennium.

Language Changes, Corrections, and Other Fixes

The bill makes a number of changes and corrections to previous bond authorizations, including:

● Obligating $5 million of funds previously authorized for school construction for “school security projects involving multimedia interoperable communication systems;”

● Obligating $5 million of funds previously authorized for low-performing schools for specified co-location costs in the Hartford school district;

● Restoring authorizations to bond programs when necessary to reach allocated levels and making concurrent cancellations where applicable; and

● Changing authorization language on several programs to allow for expanded use of previously authorized bond funds.

To the extent any of these changes allow for use, or expedited use, of bond funds, there is a potential acceleration of debt service costs.

Municipal Impact

To the extent that newly authorized bonds, or newly obligated authorizations, are allocated, the bill will result in an additional revenue gain to various municipalities, including Hartford.

In addition, the bill co-locates the Montessori Magnet school in Hartford at the L.W. Batchelder Elementary School, and maintains the operation of the L.W. Batchelder Elementary School. This could result in foregone savings to the City of Hartford associated with the recommendation to close the school, by the District Model for Excellence Restructuring Recommendations and School Closures approved by the board of education for the Hartford school district. The extent of the foregone savings is unknown. Additionally, the foregone savings may be partially or completely offset by the bond funds described above.

The bill also makes procedural changes to the school choice lottery. This is not anticipated to have a fiscal impact to the State Department of Education (SDE), as Hartford does not receive magnet school grants for the enrollment of Hartford students in Hartford host magnets.

The Out Years

To the extent that bonds are allocated and issued, debt service payments may extend up to 20 years from the time, and under of the terms, of issuance.