The New York State Legislature recently passed a bill that would allow the state's dormitory authority to finance the renovation and construction of projects for nonprofit primary and secondary schools that provide educational services for handicapped children.

The authorizing legislation was sought by the New York State Coalition of Residential 853 Schools, which provide education programs for children who are emotionally disturbed, mentally ill, learning disabled, or physically handicapped. There are about 140 such schools in the state, 34 of which have residential programs.

The bill is awaiting the governor's signature. It would allow the schools, either individually or on a pooled basis, to gain access to the markets through the authority. The bonds would be supported by a funding stream, which is made up of tuition payments to each of the participating schools. Financing through the authority would provide stronger credit and reduce issuance costs.

The coalition noted that the total cost of major construction projects in the next few years is about $60 million. The statewide coalition is made up of 22 residential schools that are seeking capital for either renovation or construction.

Thomas A. Devane, deputy executive of planning and financial analysis for the authority, said, "We have been in preliminary talks with the 853 coalition. We don't have any information on the needs and projects or how much [funding] is needed. My guess is that it is a big, big program."

He noted that "there haven't been any large capital programs available to them. They get state appropriations and some modest amounts for capital programs, but this would be the first time they have access to debt markets."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.