State legislators gave final approval Wednesday to a landmark education bill designed to raise graduation standards, turn around failing schools and hold teachers more accountable for student progress.

The bill grew out of the state’s effort to win millions of dollars in federal stimulus funds under the Obama administration’s $4.3 billion Race to the Top competition, an incentive program designed to spur school reform.

Whether the state qualifies for the money won’t be known for months, but lawmakers and educators said it significantly improves the chances.

“This is as bold a set of moves as Connecticut could possibly put together,” state Education Commissioner Mark McQuillan said. “This will help us establish a comprehensive reform agenda for the next decade… It’s a great day for us.”

McQuillan has been pushing for some of the reforms, including more rigorous high school standards, since becoming commissioner three years ago. The bill increases graduation requirements, asking students to acquire additional credits in mathematics, science and foreign language. Starting with the class of 2018, students also would be required to complete a senior project and pass graduation exams in algebra, geometry, biology, American history and English.

The state Senate voted 31-4 to approve the reforms before the legislative session ended Wednesday night, sending the bill to Gov. M. Jodi Rell for her signature.

The reforms also would ease restrictions on charter schools, create a fast-track system for training and licensing school principals, revamp the state’s education data collection system, and establish a system to evaluate teachers based in part on how their students perform.

In addition, the bill requires low-performing schools to establish governance councils of parents, teachers, and community leaders with the authority to recommend a complete overhaul of schools that consistently fail to improve.

Many believe the reforms would not have been possible without the incentive of winning up to $175 million under Race to the Top.

Connecticut is making a second attempt to win the funds after finishing well out of the running when the U.S. Department of Education announced winners of the first round of grants in March.

Of 40 states and the District of Columbia in the competition, 16 states were named finalists and only two – Tennessee and Delaware – were picked for the first awards. Tennessee won $500 million, Delaware $100 million.

Connecticut’s application was ranked 25th by federal reviewers, but state officials have expressed hope that a revised application, along with the passage of strong school reform laws, will significantly improve chances of winning in a second phase of the competition.

The bill is designed to align state policy with goals of Race to the Top. As many as 10 to 15 states could win grants in the second round.  Winners will be announced in late August or early September.

Lawmakers crafted the bill with the help of a wide range of education groups, including some who hold widely different views on how to improve schools.

The school reform group ConnCAN, for example, has lobbied aggressively for charter schools – a position that has put it at odds with teacher unions and others who fear that charters will drain money from traditional public schools. ConnCAN also has backed efforts to hold teachers more directly accountable for student performance while unions have been wary of such plans.

“Clearly we’ve pushed the state to go farther and faster,” said Alex Johnston, ConnCAN’s executive director. He said, for example, ConnCAN would have preferred a stronger funding system for charter schools and more specific provisions linking teacher evaluation with student progress.

Nevertheless, Johnston praised the bill.

“This legislation really is a significant step forward,” he said. “It really would have been unimaginable a couple of years ago to make this kind of progress.”

John Yrchik, executive director of the Connecticut Education Association, the state’s largest teachers’ union, said, “I think this legislation is important not just because of what’s in it, but because of the process by which it was arrived at.

“Bringing together contrasting viewpoints and forging consensus . . . was a remarkable achievement.”

Some lawmakers have questioned the potential cost of the reforms, saying there is no guarantee Connecticut will win the stimulus funds.

The bill could require the hiring of as many as 380 additional teachers statewide at a cost of nearly $21 million, according to an estimate by the legislature’s Office of Fiscal Analysis. Another $7 million is projected in training costs related to the new teacher evaluation program.

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