CHEFA partners with nonprofits to support economic and workforce development throughout Connecticut
We appreciate the point of view expressed in a recent op-ed entitled “There is too much state borrowing to benefit private colleges and schools.” However, there were several inaccuracies reported in the piece that we would like to take this opportunity to correct.
First, it is important to note that the Connecticut Health & Educational Facilities Authority (CHEFA) is a conduit bond issuer that provides access to tax-exempt financing, grants and financial assistance to educational institutions, healthcare providers, childcare providers and other qualifying 501(c)(3) organizations. CHEFA is a self-supporting entity; our operations are not funded with any taxpayer dollars.
Since its inception in 1965, CHEFA has issued over $21.3 billion in bonds. These investments underpin a critical social service infrastructure system that cares for our health, educates us, and enhances the welfare and prosperity of Connecticut residents. Capital projects funded by CHEFA are a significant contributor to the state’s economy and we are proud to facilitate these important investments.
According to an economic impact study conducted for CHEFA by IHS Markit, for the five-year period from 2014 – 2018, “CHEFA facilitated $1.6 billion in financing for capital projects over 2014-2018, focused primarily on healthcare and educational institutions. These projects had wide ranging economic impacts on Connecticut, creating 3,088 jobs, $211 million in labor income, and $301 million in gross domestic product annually on average from 2014-2018.
In addition to the economic gains attributed to the construction and capital expenditures, these projects also created long-term economic value through the institutions they supported.”
CHEFA works closely with nonprofit educational institutions to provide access to tax-exempt financing because it is typically more cost effective. This in turn makes more capital projects feasible. Importantly, almost all bonds issued by CHEFA are not obligations of the state or CHEFA, but of the underlying nonprofit entity. Their repayment does not utilize taxpayer dollars and the only exceptions to this have come as a result of legislative mandate.
In fact, the only outstanding CHEFA bonds that are a contingent liability of the State of Connecticut are bonds issued by CHEFA to fund capital projects of Connecticut State Colleges and Universities (CSCU). CHEFA has proudly issued approximately $332.2 million of outstanding bonds to make sure these important institutions have access to affordable financing.
The only CHEFA bonds that are paid by the State of Connecticut are the State Supported Child Care Revenue Bonds that we issued to fund creation of new childcare slots throughout the state. There are currently approximately $43.5 million of childcare bonds outstanding.
It should also be noted that as a mission-driven quasi-public entity, CHEFA is uniquely positioned to provide critical support to a variety of nonprofit organizations throughout the state. In addition to providing access to tax-exempt financing we have awarded more than $38 million in grants since 2002. CHEFA has awarded $805,009 to the CSCU system and related entities between 2019 and 2021 under our grant programs. This includes a recent grant of $350,000 made as part of our COVID-19 grant program. This funding provides relief to CSCU students who were ineligible for CARES Act funds.
We believe that access to high quality education is paramount in growing Connecticut’s economy and developing our state’s workforce. Accordingly, CHESLA, (the Connecticut Higher Education Supplemental Loan Authority and a CHEFA subsidiary) has made $519.7 million in student loans under its In-School Program since its inception in 1982. This has resulted in the origination of approximately 52,967 loans that have provided needed assistance to borrowers throughout the state, many of whom attended or are attending Connecticut colleges and universities.
We believe in broadening access to higher education for all Connecticut residents who wish to pursue educational advancement. This is exactly why CHESLA awarded $9.9 million to Connecticut students attending Connecticut schools under its need-based scholarship program.
These funds helped to provide access to higher education for approximately 5,312 students. In its most recent round of scholarship awards, CHESLA distributed $487,500 in financial assistance among 167 Connecticut residents for the 2020-2021 academic year. The awardees represent 64 Connecticut towns and cities and 23 Connecticut colleges and universities.
We are proud of the significant contributions CHEFA has made to Connecticut’s nonprofits including those in the fields of education, healthcare, and childcare, and the meaningful impact we have had on the state’s workforce and economy. We look forward to our continued partnership with the state and nonprofit community as we work together to grow Connecticut’s economy, develop the state’s workforce and increase opportunity for all Connecticut residents.
Jeanette W. Weldon is the Executive Director of CHEFA, the Connecticut Health and Educational Facilities Authority.
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