Zohran's Green Schools Platform
I mentioned in a previous email that I’ve been working with the Zohran Mamdani campaign’s education policy team. One of the platforms I’ve contributed to recently went live, and it’s so exciting!
This week I wanted to write about the tiny little piece I made for this platform, and how it relates to a larger project of studying the potential for green fiscal mutualism in New York City school finance.
Zohran’s campaign launched their Green Schools plan on Earth Day last week. The platform itself is amazing: it focuses on renovating 500 schools with clean green technology (solar, geothermal HVAC, etc), construction of 500 new school yards, and the transformation of 50 schools into resilience hubs that provide crucial resources as we adapt to climate catastrophe, like storm surges, heat waves, and blizzards.
As always, the ugly question emerges: how we gonna pay for it? And that’s where I usually come in to figure out some socialist solutions to financing our dreams for public education.
In this case, I had two ideas, but the team came up with four good ones and I want to go through each of them.
First, spending money already waiting to spent through the Department of Citywide Administrative services:
Starting with the money waiting to be spent! The Department of Citywide Administrative Services (DCAS) is in charge of energy management and was allocated $3.8 billion in 2019 for improving public buildings’ energy efficiency. DCAS’ remaining allocation will be directed to prioritize schools for HVAC upgrades and solar rooftops.
The second one is partnering with the New York Power Authority on the projects themselves, as part of the Build Renewables Act, one of the signature socialist accomplishments of the last decade of New York politics:
Public power for public schools. Schools will not lease the solar power from a third-party provider through purchase power agreements (PPAs). Instead, the Mamdani administration will partner with the New York Power Authority (NYPA) as part of the Build Public Renewables Act (BPRA) to build these projects. By eliminating the corporate incentive to maximize profit, we can lower energy bills and return those savings back to workers. Currently, NYPA has planned only one renewable energy project in the city. Building NYPA renewables in the city will also lower our energy bills through the Renewable Energy Access and Community Help (REACH) program, which provides bill credits to low and middle income households. A direct partnership will reduce the administrative costs that hold NYPA back from building more renewables in the city and provide economic relief to working families.
But I didn’t work on those specifically. I worked the latter two pieces of the policy financing architecture.
I found a state report that detailed how school facilities are financed in New York and paid particular attention to the formulas that allocate money, their limits, and presumptions. New York state governments plays a big role in financing school buildings, much bigger than Pennsylvania, which I’m more familiar with. But also, Pennsylvania has laws that New York doesn’t when it comes to green school infrastructure that I thought we should demand.
So, the formulas. It turns out that there’s a “maximum cost allowance” in the formula for school facilities financing from the state, which limits how much a district can get.
Building projects get covered 56.9% maximum through this MCA, which means that the actual cost of a project could much higher than the amount a district gets from the state. Pennsylvania has laws that create waivers for green infrastructure, called the Guaranteed Energy Savings Act (GESA).
So my idea is for Zohran, who’s a state legislator now, to get legislation passed that would create a green waiver for the MCA to cover more than 56.9% of actual green building costs. Here’s the section from the platform:
Lifting state spending limits for decarbonizing schools. Currently, New York State calculates aid to NYC schools for its buildings based on a maximum cost allowance policy (MCA). This policy heavily impacts the amount the city gets in aid for construction projects. According to a recent IBO report, “[d]epending on the difference between the MCA and the actual cost, the share of actual costs covered by building aid could be any percentage up to 56.9 percent. For new school construction projects in particular, which have high costs, the MCA is likely to be significantly less than the actual cost.” MCA policy therefore prevents districts from decarbonizing their buildings, given that the costs of green tech can be higher. The Mamdani administration will work with state legislators to create a green waiver for this MCA percentage threshold to incentivize decarbonization of city school buildings, akin to Pennsylvania’s Guaranteed Energy Savings Act (GESA).
My other idea comes from what’s become my bread and butter: green fiscal mutualism. I think Zohran should finds ways to incentivize the city’s Teachers’ Retirement System to buy green school bonds specifically to finance the city’s schools. His administration could interface with the state’s green bank to derisk a portfolio of bonds that are specifically green and in NYC, leveraging the pension fund’s size and purpose (serving retired educators) to benefit the city’s kids now. Here’s the part of the platform:
Green school bonds. The Mayor and Comptroller can work together to incentivize the Teachers’ Retirement System (one of the country’s largest pension systems) to invest in green school bonds for NYC, drawing from state financing authorities like the NY Green Bank to de-risk this investment by backstopping potential losses, setting lower interest rates, and charging fewer fees by working with green non-profit legal and financial advisors. The NY Green Bank—an institution with a mission to finance the transition to clean energy and address the climate crisis—is especially qualified to build capacities for project development and can provide low to no cost loans for school districts. Green banks often have larger capacities to borrow, as their portfolios are likely more creditworthy than any school district’s; lenders trust that a green bank can manage energy projects.
It’s this second proposal that I want to dig into more in the coming week. For instance, I want to know about the structure of the TRS’s board and managers. How much control does the teachers union over this board, for instance? As the NYC teachers union election comes up fast, it’d be good to know exactly what the relationship is between the union and the pension fund.
I also want to know more about the NY green bank: who’s on its board, where does it sit in the larger scheme of the state state apparatuses, whether there are previous connections between it and the school district.
I’ve got questions about the nuts and bolts of the financing structures in the IBO report too. What are the different financing possibilities when it comes to infrastructure money in the state? Where can we be creative?
Finally, the politics of green fiscal mutualism are super important: what’s the terrain? How viable are these ideas? It looks like the current comptroller, who’s also running for mayor, Brad Lander, wants to do some fiscal mutualism for housing (and Mark Levine, who’s running from comptroller now, is pushing the same plan).
This post is the first in a series looking into these questions, using Zohran’s Green Schools Platform as a diving board into the rabbit holes.