Troubled schools on trial: Building boom, pensions lock in big costs statewide
Last spring Connecticut lawmakers decided the state would provide $40 million to help enlarge and improve the high school in urban Danbury and $11 million to help add preschool classrooms and make other improvements down the road in tony Wilton.
The costs were part of $562 million in authorized bonding added this year to a robust school construction program in which virtually every project that local districts apply for gets state aid, though at a level that heavily favors poorer districts. The state is currently paying off more than 600 projects.
All this borrowing has added up – and the state is now spending about $700 million each year to pay off debt from construction projects. Coupled with well over $1 billion the state must contribute each year toward teachers’ pensions, about 40 percent of the state’s annual education spending is locked in for years to come.
Whether the state has spent wisely on school construction is disputed. And in a time of increasing state budget duress, questions are being raised about whether it should be reined in or reallocated.
“We have to contain those costs,” state Sen. Beth Bye, the co-chairwoman of the legislature’s powerful budget-writing committee, said during an interview. “It needs to be looked at, fixed, and improved… We need a systemwide approach, that’s what’s missing.”
In a recent trial over whether the state meets its educational obligations under the state constitution, a coalition of educators and others suing the state said Connecticut’s massive construction program still unfairly left some poor-district schools in tough shape. But attorney’s defending the state said the plaintiffs’ evidence amounted to nothing more than a few anecdotes and not proof of a systemic problem with the condition of Connecticut schools.
‘A state of disrepair’ or a ‘building boom’?
In a small number of schools, conditions are rough.
At Smalley Academy in New Britain, students are taught in the cafeteria, hallway or auditorium when the air conditioning or heat stops working. It’s a huge disruption, the principal told the Superior Court judge presiding over the school funding trial.
“A brain does not function in a place where you are freezing,” testified Principal Elsa Saavedra-Rodriguez. “You just don’t concentrate. Your 100 percent is not there. You are focusing on taking care of a basic need – being warm.”
At Edison School in Bridgeport, gym class is in the parking lot. In winter desks are pushed back to make space in classrooms. When the heating system fails, students wear coats and mittens during class.
“We can’t have kids in mittens learning to write,” testified Jacqueline Simmons, the school’s principal until 2015.
Social worker Catina Caban-Owen counsels elementary students in the locker room off the gym at crowded North Windham School. At times there’s no heat so students have to wear coats, the roof leaks and “there is excruciating noise of children playing next door,” she testified.
At New London High School, some teachers apply duct tape to their windows to keep wind and snow out, Principal William Thompson said. Trash cans catch rain leaking into the building, and the boilers work intermittently. The New England Association of Schools cited concerns with the facility dating back to 1988. In 2008 it concluded the building was “in a state of disrepair.”
After years of waiting for a new building, Thompson said, the project finally won the nod of local taxpayers and is moving forward. The school is expected to open in 2020, with New London residents covering 20 percent of the bill and the state the rest.
“Hope is not a strategy,” said Thompson of the years of waiting.
The state spent $5.9 billion on school construction and capital projects between the 2006 and 2015 fiscal years.
Of that, $2.1 billion (36 percent) went to the state’s seven poorest districts, including the state’s four largest – Bridgeport, Hartford, New Haven and Waterbury. Another $1.2 billion (21 percent) went toward projects in charter, regional magnet and vocational schools largely aimed at improving education for low-income students. The state’s 30 wealthiest communities got $355 million – 6 percent of all school construction aid from the state. The bulk of this spending, 92 percent, went to renovate or expand existing schools and the remainder to build new schools.
The portion of a project a local district must finance is based on town wealth and its ability to cover the cost locally. For the poorest district, which is Hartford, the state covers 80 percent of a project’s cost. For the wealthiest district, Greenwich, the state covers 20 percent. A 10 percent bonus is provided for regional schools that enroll students from multiple districts and for suburban districts that enroll city students.
Throughout the funding trial, neither side offered any sort of system-wide review or analysis of the condition of Connecticut school buildings.
“I don’t know how you can possibly draw any conclusions beyond the roof of this school, or this social worker’s office in this school…” said Joseph Rubin, the state’s lead attorney from the attorney general’s office. “So, I don’t know how you can possibly generalize, and I submit that you can’t generalize from one incident.”
However, a survey the state does every three years of Connecticut’s 1,400 public schools provides some perspective.
In 2013, it found that one out of every 40 elementary schools needed asbestos remediation and the local district had no immediate plans to address it. One out of every 25 elementary or high schools and one out of every 29 middle schools had a roof problem and had not scheduled repairs to fix the underlying issue. One in 13 schools had poor air conditioning and one in 70 had a poor heating system.
In the state’s most impoverished districts – Bridgeport, Hartford, New Haven, New London, New Britain, Waterbury, Windham – a lower percentage of the schools had areas of their buildings rated as being in fair or excellent condition, according to the survey.
In the most affluent districts – Darien, Easton, New Canaan, Redding, Ridgefield, Weston, Westport, and Wilton – 88 percent of the schools either had been built in the last 20 years or had had a major renovation compared to 71 percent in the high-poverty districts.
In an era of declining enrollment in many communities, the survey also found that 71 percent of high schools were less than 90 percent full and less than 85 percent of middle and elementary schools were full.
State officials testified at the trial, however, that state aid for school construction or renovation has been provided to all comers.
“The only hurdle I cannot overcome is if a district wants to cancel a project,” testified Linda Dixon, who oversees school projects at the Connecticut Department of Administrative Services. “I don’t think that I have ever said that you are not approved. I have said you are missing documentation.”
Local educators are quick to point out, however, that the state might be capable of funding its share of a project, but the amount they must raise from local taxes, though often a small proportion, is at times too much.
In East Hartford, the town must pick up one-quarter of the cost.
“The reality is the 25 percent stops these programs from moving forward,” testified East Hartford Superintendent Nate Quesnel. “That’s a roadblock.”
In Hartford, local officials turned down $54.4 million in state aid to renovate Martin Luther King Jr. School because city government could not finance its $13.6 million share of the project. The amount of debt looming over Hartford amounts to 15.1 percent of the value of its taxable property – by far the largest rate in the state, reports the governor’s budget office.
The school was built 92 years ago, and it has been 30 years since sections of it were renovated.
So now, the district is considering closing some schools.
“There is a universal recognition that we do a disservice to our kids by spreading scarce resources across too many schools with low enrollment and poor facilities,” Hartford Mayor Luke Bronin wrote his school board in October. “We should all feel a fierce urgency to ensure that no child in Hartford should have to attend a school that is falling apart or failing to provide students with the education they deserve.”
Despite the obstacles, many projects have managed to make it to the finish line in low-performing communities.
For example, the new $44.7 million Roosevelt Elementary School in Bridgeport opened for the 2015-16 school year. In Stamford, local officials held a ribbon cutting in September for a new $61.8 million elementary school. The state picked up 80 percent of the tab for both schools.
Judge Thomas Moukawsher, the Hartford Superior Court judge who spent five months hearing evidence during the school-funding trial, wasn’t convinced that the condition of schools in Connecticut is a systemic problem.
“There is anecdotal evidence of physical deficiencies in some schools – a leaky roof here, an unreliable boiler there – but nothing to suggest a statewide failure to provide adequate facilities, including classrooms which provide enough light, space, heat and air to permit children to learn,” Moukawsher ruled in September.
Magnet school mandate
State spending to build and operate new regional magnet schools has skyrocketed, a trajectory only partially within lawmakers’ control.
The growth of magnet schools represents the state’s attempt to address the requirements of a state Supreme Court school desegregation ruling – the 1996 decision in the Sheff v. O’Neill case, which focused on Hartford area schools. The ruling called the state’s use of town lines to set school district boundaries “the single most important factor” in the concentration of minorities in segregated schools, which it said had “devastating effects.”
Instead of redrawing school districts, state lawmakers decided to build and open themed regional magnet schools in an effort to attract white students from the suburbs to voluntarily attend schools with city residents. While the majority of the new magnet schools opened in the Hartford region to comply with the Sheff order, some also have opened in other parts of the state.
The more than 80 magnet schools that enroll about 40,000 students statewide cost the state billions to build or renovate and now cost $313 million each year to operate. Over half of Hartford’s students still attend segregated schools.
“That was the result of judicial intervention that continues to this day. No one in the General Assembly has control over that spending,” Rep. Andy Fleischmann, the House chairman of the legislature’s Education Committee, said of the cost of magnet schools.
Pressure to slow spending
Borrowing for school construction traditionally has received favored treatment at the Capitol, partly because it funds high-profile local projects and partly because it is typically paid off over many years.
“It’s a capital budget,” Fleischmann said. “You can’t treat it the same way” as operational spending.
But now that the annual bill to pay off past projects has ballooned to almost $700 million, lawmakers may be forced to rethink whether the annual ritual of placing new projects in the queue is appropriate – especially as they work to close yet another large state budget deficit.
Malloy, a Democrat, on several occasions has publicly questioned the need for the state to fund projects in wealthy communities.
“We contribute mightily to the building of school projects and programs,” Malloy said during the Sept. 30 meeting of the State Bond Commission before the panel approved funding for school projects. “I think if the legislature, led by a Republican discussion, are going to take on these issues, then you have to be willing to take all of them on – including the fact that we contribute mightily to building schools in districts where the mill rate is substantially less than it is in most other communities in the state.”
Earlier this year, state legislators passed legislation to give Greenwich – the wealthiest community in the state – more money to finish adding a music wing to Greenwich High School, setting the town up for $9.2 million in state aid, 20 percent of the cost.
However, even if lawmakers were to reduce how much new spending they put onto the credit card for school projects, it would take some time for substantial operating budget savings to show up as the state pays off what it already has borrowed.
For example, facing a massive budget shortfall in 2011, legislators considered a moratorium on funding school construction projects. Such a move, however, would not have saved the state any money in the first fiscal year and a mere $9.5 million the following year, reported the legislature’s nonpartisan fiscal office. Similar conclusions were made in prior years.
The judge gave the state a mixed review for all this construction spending.
While unconvinced that schools are in disrepair, the judge, who is a former state legislator from Groton, ruled that the way the state is pouring money into school construction projects is irrational, and therefore unconstitutional.
“Experts for both sides in this case rated physical facilities at the bottom of their lists of things that help students learn… Still Connecticut keeps on spending and does so without any rational criteria for what should be built or renovated and what shouldn’t,” he wrote. “This building boom has happened while the state’s student population has been shrinking considerably. It also goes on amidst a legislative free-for-all where… every year legislators with enough clout swoop in and change school construction spending priorities or reimbursement rates to favor projects in their districts without any consideration of relative needs across the state.”
The legislature has often granted individual school projects exemptions from various state requirements.
In his 90-page ruling, the judge ordered the state to craft a spending approach that “rationally, substantially and verifiably connects education spending with educational need.”
His order has been put on hold, however, until the Connecticut Supreme Court rules on an appeal from the state’s attorney general.
Pension spending also locked in
Unlike most other state education aid, the state contribution to teacher pensions does not factor in a town’s wealth or ability to raise local revenue. Rather, teachers pay a portion of their salaries into the fund, and the state and investment earnings cover the remainder of the costs.
The average annual pension of Connecticut teachers who retired in fiscal 2016 was $59,364, plus guaranteed annual cost of living increases. Connecticut teachers, however, do not participate in Social Security, and neither they nor the state contribute to the program. As a result teachers do not accrue Social Security benefits for their time as teachers.
More than a billion dollars each year goes to pensions for the close to 36,000 retired public school teachers – a fast-rising, locked-in chunk of state spending. It has increased by an average of $80 million since 2005, and represents half of the $1.6 billion increase in Connecticut’s annual education spending over the past decade.
And those retirement costs will continue to skyrocket, largely because legislators and governors promised teachers the benefits but did not save to pay for them for decades. The teachers pension contribution will cost the state $1.43 billion next fiscal year, a $297 million increase over the current year.
In 2008, trying to make up for some of the years of underfunding, the legislature and then-Gov. M. Jodi Rell borrowed $2 billion through bonding to shore up the pension system. As part of the deal, the state made the bond investors a promise, known as a “covenant,” that the state would contribute whatever actuaries said was necessary each year to put the system on a path to fiscal health.
“Defined benefits are considered to be rich benefit programs,” Darlene Parez, the administrator of the Connecticut Teachers’ Retirement Board, testified during the school-funding trial. “There is a covenant to the bond that makes it very difficult for the General Assembly to get out of.”
State legislative leaders say they are not trying to get out of the pension obligation, saying the state has made a promise in statute to the state’s teachers and they are reluctant to break it.
Very little time was spent during the school-funding trial on pension costs, and the judge did not single out this area for a critique in his decision, except to point out that retirement benefits for Connecticut teachers are “far above the national rate for private-sector professionals.”
This story is part of a seven-part series. Troubled Schools on Trial:
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