Malloy proposes shaking up state education aid

New Britain – Standing in the library of an elementary school that was at the center of a recent school-funding trial, Gov. Dannel P. Malloy Monday released his plans for redistributing existing levels of state education aid in ways he said would help the most impoverished school districts.

“There will be a shift. There will absolutely be a shift,” Malloy, a Democrat, told reporters when releasing his plans at Smalley Academy. “We are failing children because their parents are poor.”

His plan overhauls the highly criticized Education Cost Sharing (ECS) formula by changing how student poverty is determined and creating a grant pool of roughly $575 million to help towns pay for special education.

The new pool of money – for educating physically or developmentally disabled students – would be funded almost entirely by redirecting nearly one-quarter of the $2 billion in state dollars that currently go toward the ECS grant and all of the so-called Excess Cost grant, which helps school districts pay for services for severely disabled students.

The administration plans to release how each city and town would fare under the new plan later this week. Malloy said he wants legislators and the public to understand the policy reasons for the proposed changes before focusing on how each town would be affected.

Education aid for individual towns typically has been shielded from state cuts over the years, a so-called “hold harmless” provision that makes it politically easier to get a state budget through the legislature.

On Friday, Malloy proposed that the state start billing municipalities for one-third of the cost of their teachers’ pensions, which would save the state $407.6 million next year. The state currently pays the entire cost of public contributions to the teachers’ pension fund while teachers contribute 6 percent of their salary.

It was not clear whether the governor plans to reinvest some of those pension contribution savings into the other state education grants, use it to reduce a projected state budget deficit, or some combination of both.

The changes to the ECS formula the Democratic governor is seeking come a few months after a state judge ruled after a lengthy trial that “the state of education in some towns is alarming,” that state education aid is distributed in a way that is “irrational” and thus unconstitutional, and that aid decisions are made in a “black box of secrecy.”

Malloy said he agrees with the judge’s basic tenet that gaps in achievement between the most impoverished school districts and wealthier ones is worrisome and unconstitutional, and he said his proposed changes would address that.

New Britain officials were pleased by what they thought the proposed changes would mean for their schools, including Smalley Academy, whose teachers and social workers testified at length during the school funding trial about having to pick-and-choose which struggling students got counseling or tutoring.

New Britain Mayor Erin Stewart, a Republican, praised Malloy for the priorities he emphasized Monday, though she said her administration would carefully review the specifics of the governor’s state budget plan, which is due to legislators on Wednesday.

“For a city like New Britain, obviously this is great news,” Stewart said, praising the governor for acknowledging longstanding inequities in how Connecticut funds education. “We’re a very poor community, there’s no doubt about that. Our children don’t have a lot,” she said, adding that the $13,000 New Britain spends annually, on average, on each of its 10,000 students is “almost dead last in the state.”

New Britain High School teacher Sal Escobales, president of the local chapter of American Federation of Teachers, reacted cautiously to the governor’s proposals. “Clearly we would need to see more details,” Escobales said. “Anything we can bring to help those students we would be in for.”

Measuring wealth

To accomplish the goal of redirecting education dollars to the districts most in need, Malloy would change how the state measures poverty in schools

Currently, the state uses the number of students who qualify for free or reduced-price meals. That measure has become outdated, however, because the state and federal government began allowing free or reduced-price meals to all students in schools where more than 40 percent of students qualify.

Malloy would replace it with the number of participants in Husky A, health care provided through Medicaid.

“I think that Husky A is a far better existing tool to measure true, deep poverty in a community,” Malloy said.

Some advocates are leery.

“The concern is that you would underestimate poverty,” Daniel Long, the research director for Connecticut Voices for Children, a left-leaning advocacy group that lobbies at the state Capitol, said during a recent interview. “The question is who is given access.”

Both undocumented residents and poor students whose families nonetheless have private health insurance would not be counted. There are also concerns that the state would not be able to determine which Husky A recipients are school-aged. (Read more here.)

Long said that in other states that have shifted to using Medicaid to measure poverty “it was used as a tool to lower who is counted.” By using the number who qualify for free or reduced-price meals, the state is “erring on the side of providing that additional aid,” Long said.

To qualify for Husky A, a family of four must make no more than $48,500 per year, which is 201 percent of the federal poverty level.

To qualify for free or reduced-priced meals, the same family must make no more than $44,860 per year, which is 185 percent of the federal poverty level.

A comparison between how many students would be deemed to be in poverty under the governor’s proposals and how many are under the current setup was not available Monday. The legislature’s nonpartisan fiscal office was, however, able to provide the most recent participation numbers in the school lunch program and Husky A. That data shows many more children as poor under Husky A, but the number includes non-school aged children.

As a shift to Husky A was pushed in recent years, several legislators began to push back. Fifteen Democratic state legislators – one in 12 members of the General Assembly – have proposed bills mandating that the state continue to use free and reduced-price meals to measure poverty.

The governor also wants to shake up how the state determines how much revenue a city or town is capable of raising locally for education. He did not provide specifics but said the current system, which places the most weight on how much taxable property a municipality has and a small share on median household income, is not effective.

The governor plans to dispense the new special education funding based on town wealth. The most affluent communities would get nothing from the state for special education and the poorest would get 55 percent of their costs paid for.

Currently, special education is not factored into the ECS grant. A separate $135 million grant – the Excess Cost Grant – currently exists to help districts pay for severely disabled students who are costing the district more than 4.5 times the amount of their average per-student spending. That grant does not factor in a town’s ability to pick up those costs through local taxes.

The governor also said his new education formula will run the most-recent student enrollment numbers. Over the years “hold-harmless” guarantees have prevented state aid to decline as student enrollment decreases, which has contributed to a small number of districts receiving more aid than the formula calls for.

“That idea that we held communities harmless while they were shrinking meant that we didn’t fund schools that were growing,” said Malloy.

Malloy also proposes that district that are not considered among the 30 low performing to be able to further cut their education budget than currently allowed under state law.

Current state law requires that districts spend at least as much on education as they did the previous year. However, districts that are not considered low-performing are allowed to cut spending by the amount of state aid they lose and by 1.5 to 3 percent from year-to-year if enrollment declines, a school closes or a district can document savings to the education department. The state’s highest performing districts are exempt from the spending requirements.

Municipal leaders regularly complain about the spending requirements, but the education department reports that it seldom gets requests from district leaders for permission to cut spending. Only two districts have asked for permission to cut spending in recent years, despite the existing flexibility.

A number of reactions to the governor’s proposals were cautious.

Mark Waxenberg, executive director of the state’s largest teachers’ union, the Connecticut Education Association, said that while he agrees with the governor that the education funding system is inequitable, he fears that Malloy’s solutions won’t be adequate. The governor needs not only to redistribute education funding, but also to begin expanding overall state spending by several hundred million dollars, Waxenberg said.

“I don’t believe we are coming close to adequate funding” overall, he said during an interview. “We can’t believe there’s enough money in the system now.”

Waxenberg added that simply redistributing existing levels of state aid probably will assist the poorest of poor communities while not helping — or possibly even draining state aid from — cities and towns that are average or slightly below average on the wealth spectrum.

The state Superior Court judge in the school funding trial, who lambasted state education funding practices and some educational standards in his decision, ruled that overall the state spends enough, but distributes it in an irrational way.

“There are no resources the General Assembly can afford to spare [struggling schools] in favor of indiscriminate impulse or political routine,” Judge Thomas Moukawsher ruled in September.

Patrice McCarthy, general counsel of the Connecticut Association of Boards of Education, said she is “pleased that the governor recognizes the impact of special education costs on school districts and municipalities, as well as the need to use current, accurate data in the ECS formula. We are anxious to see the details of the funding levels for ECS and special education to determine the impact on our public schools,” she said.

Others were more blunt.

“The governor’s proposed changes to ECS and special education funding, coupled with his proposal to require towns to pick up one-third of the cost of teacher pension costs, will make it impossible for small towns to fund education without staggering increases in local property taxes,” said Betsy Gara, Executive Director of the Connecticut Council of Small Towns. “This proposal will divert resources away from our smaller communities in a way that spells absolute disaster for our local property taxpayers.”

While the legislature begins to vet this proposal, Connecticut’s education commissioner hopes they agree that state funding needs to be directed to the worst-off districts.

“The impact of poverty in the classroom is heartbreaking,” said Dianna Wentzell. “Our mission is to support the kids who need it the most.”