Source: Keith M. Phaneuf, CT Mirror
The town of Coventry needs to replace the aging ventilators in its middle and high schools — an expensive proposition, made more pressing by the continued presence of the coronavirus.
Even though the town is receiving federal money to assist with pandemic relief, it’s not enough to cover the costs of the ventilation system upgrade in the schools. And officials say Coventry isn’t the only town in this situation.
But the state of Connecticut isn’t likely to come to the rescue any time soon.
A longstanding state policy that restricts aid for heating, air conditioning and air quality control projects may get a second look from legislators, but likely not before the 2022 General Assembly session starts on Feb. 9.
And it remains unclear whether anything will change then, since Gov. Ned Lamont’s administration insists municipalities — in many cases — created their own problems with school air quality by frequently deferring maintenance.
“There are some districts that haven’t touched their schools in 40 years,” said Kostantinos Diamantis, who is Lamont’s deputy budget director and also has overseen the state’s school construction program for the past six years. “The local level needs to belly up to the bar. … The cities have an obligation to maintain those buildings.”
But Joe DeLong, executive director of the Connecticut Conference of Municipalities, said, “You’re dis-incentivizing communities from keeping their buildings up and running. What we need to do is to develop a standard for towns to work with the state and to get the state involved to work with these air quality projects.”
Representatives of CCM and the Connecticut Council of Small Towns met via teleconference earlier this month with administration officials to discuss a problem that stems from two issues — one longstanding and one recent — that have collided.
Surging school construction costs brought under control
For more than a decade, governors have faced pressure from the legislature to curtail surging costs in one of the most generous school construction cost-sharing programs in the country.
With about $27 billion in bonded debt involving all types of capital projects — and more than $90 billion in unfunded obligations after factoring in pension and retirement health care programs — Connecticut owes more per capita than most other states in the nation.
And Connecticut’s population grew by a meager 0.09% over the past decade, the fourth-slowest of all states, according to an analysis by The Pew Charitable Trusts. That means school buildings in many parts of Connecticut are under-utilized.
Connecticut spent about $450 million last year supporting projects in local and regional districts and at the state’s technical high schools, Diamantis said, noting that’s roughly $800 million less than before he began overseeing the program six years ago.
That didn’t happen by accident, Diamantis said, adding the state increasingly scrutinizes projects to ensure they’re necessary and of appropriate scale. It also means districts are being pressed to maintain and preserve what they do build.
Connecticut currently reimburses communities for between 10% and 71% of new construction and wide-scale renovation projects designed to last 20 years or longer, depending largely upon a community’s wealth.
If a district wants to perform a smaller project — such as replacing or upgrading a heating/ventilation system — the entire cost is borne locally.
State aid to towns: A history of broken promises
But cities and towns say things aren’t that simple, and that they’ve been bearing increasing costs for a long time now.
Lamont and legislators trumpeted the new state budget they enacted in June, largely because it expanded a major non-education grant program by about $240 million over this fiscal year and next, combined, while boosting education grants by an average of about $70 million per year.
But municipal officials say that aid, while appreciated, was not enough to reverse a trend that has gone on for a decades, a pattern of increasing burdens on cities and towns as long-ignored pension debt has begun to consume more and more of the state’s operating budget.
For example, PILOT [Payment In Lieu Of Taxes] grants are supposed to replace about 45% of the funds communities lose because they can’t tax state property. Prior to this year, communities got less than 15% back, according to the Connecticut Conference of Municipalities.
Similarly, the grants once designed to replace 77% of taxes lost on nonprofit colleges and hospitals had covered less than 25%.
And even with added funds in the new state budget, PILOT payments still fall well short of the target ratios.
Towns this year also have received more than $1.5 billion — and school districts another $1 billion — in emergency federal pandemic relief. But that’s enough to bolster programs, not pay for large capital projects.
For example, Coventry received $3.6 million, and its schools got another $364,000 from Washington.
The district spent most of that $364,000, as encouraged by federal and state officials, on summer school classes and other programs to help students catch up after months of remote learning during the pandemic, according to Town Manager John Elsesser.
The town used about half of its $3.6 million for a mix of purposes, including replacing two vacant police officer positions, propping up recreation programs that lost major revenue due to the coronavirus, and keeping the town’s property tax rate flat.
Elsesser said the other half, about $1.8 million, could be available to help with an air quality problem at the town’s high school and middle school — two buildings constructed in the 1960s and joined through an addition in the 1980s.
Aging ventilators that don’t distribute air well need to be replaced, in part to maximize protection for students against airborne virus spread.
The projected cost is $6 million, and the town hoped to do that along with $3 million in roof repairs. If the state covers 55% — which is Coventry’s current reimbursement rate — of the full $9 million cost, that leaves the community with roughly a $4 million share. After about $1.8 million in unexpended pandemic relief is applied, the town still has to come up with roughly $2.2 million.
But because this isn’t considered a major renovation project, the air quality work isn’t eligible for state reimbursement, and Elsesser says it would be a significant blow to taxpayers to foot the entire bill.
“These people who’ve been struggling economically are now going to be asked to kick in more taxes?” he said.
The Council of Small Towns currently is working on an assessment of all districts facing similar concerns, said Executive Director Betsy Gara. It’s unlikely Coventry is alone, she said.
“Certainly air quality is absolutely critical given the COVID-19 pandemic and the delta variant,” she added.
Some key lawmakers agree, saying the state at least should try to find middle ground.
Sen. Cathy Osten, D-Sprague, co-chairwoman of the Appropriations Committee, said she fears many group homes and nursing homes may have aging heating, air conditioning and ventilation systems.
Rep. Jonathan Steinberg, D-Westport, who co-chairs the Public Health Committee, conceded that funding all air system costs for schools and other facilities would add hundreds of millions of dollars of annual costs to the state.
And given that Connecticut finances these projects over years or decades by issuing bonds on Wall Street, the interest component would make the impact even worse.
But Steinberg said legislators should try to find some middle ground next session, possibly a program to offer even modest incentives to help communities to upgrade or retrofit existing air quality systems.
“Many schools have no program for monitoring air quality,” Steinberg said, adding, on the other hand, that “nobody can say where the pandemic will go. Discussions must go forward.”
Diamantis added that the new state budget built considerable flexibility into the $30 million grant program for Connecticut’s “alliance districts,” 32 school systems in poor communities, allowing them to utilize the grant for any purpose deemed appropriate, including capital needs.
Legislators could consider expanding this effort to help more towns upgrade their systems, he said, but municipalities, in general, must do a more to maintain them going forward.
“The first thing that goes on the education side of a budget is maintenance and repairs,” Diamantis said, adding that “The state of Connecticut does not get involved in Band-Aid approaches to maintaining buildings.”