Lawmakers Look At Loosening Local Funding Requirements Amid Declining School Enrollment
House Speaker Brendan Sharkey wants to change a state law that restricts local school districts from decreasing their spending — regardless of enrollment decreases — in order to receive the same amount of state funding.
“In just about every school district in the state of Connecticut, enrollments have declined over the last five years,” said Sharkey, D-Hamden, citing state Education Department data.
On the other hand, local education spending has gone up.
In Sharkey’s district, enrollment decreased by 3.28 percent in 2014 while expenditures rose by 6 percent. In other communities like Essex the disparity was even greater. That town saw a 14.33 percent decline in its student body while its expenditures went up by 8 percent.
“There is a complete disconnect between enrollment and expenditures on education. Part of what is driving that is the MBR,” Sharkey said of the “minimum budget requirement” statute.
Connecticut’s MBR statute requires each school district to budget the same amount for education as it did in the previous fiscal year. Under the current regulations, the state can assess a penalty in its funding for districts that spend less than their previous year’s education budget by more than half of 1 percent.
And officials say that the penalty would be levied at a 2-to-1 ratio, meaning that if a town cut its budget by $50,000 and breaks the one-half of 1 percent threshold, the state could penalize the town by cutting $100,000 from its education grant.
The Education Committee’s new bill, H.B. 7019, would allow municipalities to dip 3 percent below the minimum budget requirement, if necessary, instead of remaining within one-half of 1 percent. Currently, towns can request a waiver, but under the new legislation no waiver would be required. A district facing more significant enrollment declines would have the option to petition the state Education Department to recoup 50 percent of the net current expenditures per student, according to the bill.
Currently, schools serving fewer students than they did the previous year may qualify for partial relief at a rate of $3,000 for each empty seat, according to the Education Department — but the credit maxes out at half of 1 percent of the prior year’s budget.
“Guess how many school districts in our state have actually done that in the last several years?” Sharkey asked legislators. “Answer: none.”
The department’s spokesman, Kelly Donnelly, confirmed that she is not aware of any municipalities that have submitted requests for a reduction in MBR calculations because of declining enrollment.
Sharkey told the committee he would recommend reconsidering the 3 percent threshold, which he said is still low. But he acknowledged the proposed threshold is “workable and probably responsible” when it comes to ensuring that students’ prospects for a quality education are not compromised by voters who don’t want to pay more taxes.
Essex Board of Education Chairman Lon Seidman testified that the current requirement guarantees a difficult discussion when he presents the school board’s spending plan to the Board of Finance.
“I will have to explain to them that because we are making responsible reductions to our budget due to enrollment declines, the MBR mandate requires us to leave in at least $45,000 we would have otherwise reduced,” he said. “Due to the compounding nature of this mandate, I will also need to inform them that we could see this number climb to as much as as $320,000 in five years. That figure is nearly 5 percent of our projected education spending in 2020.”
While many districts bring up unfunded state mandates and increasing contractual obligations as the driving force behind rising budgets, Seidman said the Essex school board was able to craft a lean spending plan this year. He credited the reduction of two full classroom positions, a portion of an administration position, and a decline in the number of special education students. The district also has regionalized many services and sought opportunities for energy savings, he said.
According to Sharkey, situations like the one in Essex exemplify the current paradox in minimum budgeting.
“It doesn’t do much good to create efficiencies in our programs for our local school boards if they can’t decrease their budgets accordingly to reflect the savings,” Sharkey said. “Some of that should get filed back into the education budget for our kids, but some of it can actually be realized in property tax relief, frankly.”
Education Committee co-Chairwoman Gayle Slossberg, D-Milford, said it’s important for the state to be flexible in balancing the needs of students with the ability of taxpayers to fund those needs.
“I have a district that’s high performing and has had enrollment decline and would like relief from the MBR,” she said, “but I also have districts where there is that chronic fight every year between our certain taxpayer groups and our education system and it’s really hard to really have the people behind that level of funding for our education system.”
The bill would eliminate the minimum budget requirement completely for the top 10 performing schools as identified by the Education Department.
Sharkey recommended expanding that figure to the top 10 percent of excelling districts.
Rep. Gail Lavielle, R-Wilton, told Sharkey she is familiar with the needs of schools that perform well, such as Wilton and Westport, and those that don’t, such as Norwalk. She said exempting the top performers from the minimum budget requirement benefits the whole state.
“Contrary to what people think, it’s not giving them something special. It’s actually freeing up resources for the districts that need them,” Lavielle said.
Sharkey said the minimum budget requirement is “is hurting us fundamentally and we have to recognize that there’s a new world that we’re facing.”