Three important education issues to watch

The Connecticut Coalition for Justice in Education Funding [CCJEF] is paying close attention to three key policy issues before the General Assembly that will dramatically impact state support for K-12 public education.

These three issues are (1) education funding in the state budget for the new biennium; (2) a new mandate that towns and cities pay for some of the costs of teacher retirement; and (3) establishing a new task force to study the Education Cost Sharing [ECS] formula.

The regular session of the General Assembly will adjourn on June 5.

Education funding in the state budget for the new biennium

At over $2 billion, the Education Cost Sharing [ECS] grant is the single largest state grant to local school districts and municipalities.

Under current law [PA 17-2, June Special Session], ECS funding is scheduled to increase as “full funding” is phased in through FY 28. Towns that are considered overfunded under the formula are scheduled to have ECS grant reductions annually through FY 28, while towns that are under-funded under the formula are scheduled to have ECS grant increases annually through FY 28.   The phase-in was supposed to begin in FY 18 but was delayed until FY 19.

One component of the ECS formula calculation is a town’s number of low-income students.  Under current law, the low-income measure is the number of free and reduced-price lunch students.

Gov. Ned Lamont proposed to (1) increase ECS funding by $17.7 million in FY 20 and by $39.4 million in FY 21; (2) change the student need measure from the number of free and reduced-price lunch students as reported by school districts to a number of such students certified under the federal National School Lunch Program; and (3)  greatly accelerate the phase-out of funding for towns scheduled to receive ECS decreases.

The Appropriations Committee proposed to (1) increase ECS funding by $37.6 million in FY 20 [$20 million more than the governor] and by $78 million more in FY 21 [$38.6 million more than the governor]; (2) maintain the current free and reduced-price lunch student count provided by school districts as a student-need factor in the ECS formula; and (3) reject the expedited acceleration of phased-in funding cuts to eligible towns proposed by the governor.

The Bottom Line for ECS Funding:  While the ECS grant is estimated to be underfunded by over $600 million TODAY, and the current phase-in will add only $345 million in total ECS funding by FY 2028, the Appropriations Committee state budget proposal for ECS funding at least keeps faith with the funding increase commitment made by the governor and General Assembly in 2017. This funding proposal should be supported.

Mandated municipal contributions to the Teacher Retirement System (TRS)

Pension costs for state employees and teachers are the fastest growing-expense facing state government.  The most significant portion of these costs is teacher pensions.

The Teacher Retirement System [TRS] was established and is operated by the state.  The TRS is funded by the state and contributions from teachers.  For over 70 years state government grossly underfunded the TRS to reduce the bottom line of successive state budgets and/or divert such funding to other spending programs.  The state has only recently begun to deal with this festering, self-inflicted fiscal wound.

It is important to note that teacher retirement funding by the state is included in annual calculations of the state-local share of K-12 public education costs.

The governor proposed to: (1) defer a total of $8 billion in combined funding increases needed for the state employee and teacher pension systems from now through 2032.  This would “save” the state $640 million in contributions combined over the biennium but result in an almost $28 billion liability to be borne by future taxpayers between 2033 and 2049; and (2) require towns and cities to pay, for the first time, some of the costs of teacher pensions.  The combined up-front cost to municipalities over the next two years is $73 million.  Beginning in FY 22, a complicated formula would determine each municipality’s annual cost-sharing payments.

The Appropriations Committee and the Finance Committee proposed to: (1) not include the municipal cost-sharing mechanism in their proposed spending and revenue plans, thus leaving resolution to budget negotiations; and (2) include in their budget proposal the $640 million in saved pension contributions as proposed by the governor that appears to assume new municipal cost sharing payments for teacher pension costs.

The Bottom Line for Mandated Municipal Cost-Sharing of Teacher Pension Costs:  Yes, the self-inflicted pension obligation crisis facing the state is frightening but let’s put it in a state-local finance context.  Connecticut is one of the most reliant states in the nation on the property tax to fund K-12 public education.  The ECS grant today is underfunded by over $600 million.  The current statutory plan is to phase in a total ECS increase of only $345 million by 2028.

The price tag of a municipal cost-sharing mandate for teacher pensions will only grow and (1) negate over-all increases in ECS funding; (2) exacerbate the budget tensions at the local level between municipal and school service needs; (3) transfer a state spending responsibility onto the backs of already overburdened property taxpayers; and (4) force towns and cities to cut services, raise property taxes, or both.

Now is not the time to enact a new teacher-pension cost-sharing mandate on municipalities and their residential and business property taxpayers.  This new mandate should be opposed.

Task force to study the Education Cost Sharing (ECS) formula

The Connecticut Coalition for Justice in Education Funding [CCJEF] is the largest and most diverse education reform coalition ever established in our state.  CCJEF fought a 12- year legal battle to require the state to meet its state constitutional responsibility to provide an adequate and equitable educational opportunity to every public-school student in every school district in Connecticut.

In January of last year, a deeply divided Connecticut Supreme Court ruled 4-3 in CT Coalition for Justice in Education Funding [CCJEF] v. Rell that the State was meeting its constitutional responsibility to provide a “minimally adequate” and equitable educational opportunity to our public-school students.

While acknowledging that tens of thousands of at-risk students are not receiving the educational assistance they need to succeed, the court majority decided that the individualized educational needs of these students are constitutionally irrelevant.

After CCJEF’s historic legal battle, the CT Supreme Court majority decided they were powerless to intervene on behalf of our disadvantaged students and poorer school districts.  The court passed the buck back to the other two branches of state government.

Substitute House Bill No. 7355 (File No. 625), “An Act Concerning a Study of the Education Cost Sharing Formula” is currently before the General Assembly for action.  This proposal would establish a task force to review the ECS formula and, among other things, consider (1) the effect of such formula on the distribution of education funds to urban, suburban and rural towns; and (2) the effect of the current phase-in of funding on the predictability and sustainability of state education funding to towns.

The task force is required to report its findings and recommendations no later than January 1, 2021.

As currently drafted, the proposed task force is provided no funding to accomplish its charge.

The bottom line on a new task force to study the ECS formula:   CCJEF fought unsuccessfully in the courts for the development of a new ECS formula that (1) is truly responsive to the diversity of student and school district needs; and (2) is truly fully-funded over time to help meet those needs.  Most experts agree that the current ECS formula and phase-in funding plan fall short.

A task force to study the ECS formula, as called for in Subst. House Bill No. 7355, should be supported and amended to provide needed funding to accomplish its charge.

Connecticut continues to tolerate some of the most economically and racially segregated school districts in our nation, as well as one of the largest student achievement gaps in the country.

The 2019 General Assembly, despite fiscal challenges, has an opportunity to support the above legislative actions and put Connecticut on the path to education justice for all our K-12 public school students.

Jim Finley is the president and founder of Finley Government Strategies . He serves as principal consultant to the CT Coalition for Justice in Education Funding. He was an expert witness in the historic CCJEF v. Rell education adequacy and equity case. Jim spent over 34 years with the CT Conference of Municipalities, including a long-time stint as chief lobbyist and seven years as executive director and CEO.

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