News

Analysis of Executive Order Resource Allocation Plan: State Education Funding

News

After the Connecticut General Assembly missed the June 30 deadline to pass a budget before the start of the new fiscal year, Governor Dannel Malloy issued an Executive Order Resource Allocation Plan to fund state government operations while budget negotiations continue. While the Resource Allocation Plan covers all of fiscal year 2018, the legislature can pass a budget at any time, which, when signed by the governor, would supersede the Executive Order.

The governor’s Executive Order contains significant changes to state education funding, including a $506 million cut to the Education Cost Sharing (ECS) grant, which is the primary vehicle for state education funding to local and regional school districts. The deep cuts to education funding, as well as the cuts to municipal aid and other important services, contained in the Executive Order are a product of Connecticut’s $2.3 billion deficit for fiscal year 2018, as well as the fact that the governor does not have the authority to use an executive order to raise additional revenues or appropriate funds outside of what is allowed in state statute.

In effort to provide greater clarity and understanding around what the governor’s Executive Order means for state education funding, the Connecticut School Finance Project has prepared an independent analysis that compares state education funding for fiscal year 2017 with the projected state education funding for fiscal year 2018 under the governor’s Executive Order Resource Allocation Plan. The full analysis, including a town-by-town list detailing the net change in state education funding, is available at http://ctschoolfinance.org/assets/uploads/files/Executive-Order-Resource-Allocation-Plan-Analysis.pdf.

Along with significant cuts to ECS funding, under the governor’s Executive Order special education funding remains partially incorporated in the ECS grant and the Excess Cost grant is funded at the uncapped amount (approximately $191 million), which is an increase of $56 million over the fiscal year 2017 appropriated amount. It is also important to note that these cuts are amplified by cuts made in the Executive Order to municipal aid, such as the elimination of the Payment in Lieu of Taxes (PILOT) grant program, which reimburses towns for tax-exempt property from hospitals, universities, state-owned properties, churches, etc. Additionally, the Executive Order Resource Allocation Plan eliminates all Priority School District grant funding, which is designed to “assist designated school districts in improving student achievement and enhancing educational opportunities.”

Additionally, under the Executive Order, the governor allocates ECS funding to towns using a revised version of the ECS formula. The funding formula contained in the Executive Order utilizes a foundation amount of $9,500 with need weighting for low-income students and English Learners at an additional 30 percent and 15 percent, respectively. Low-income students are measured by the number of town students eligible for HUSKY A (Connecticut’s children’s Medicaid program), instead of the number of students qualifying for free or reduced-price lunch. Local wealth is measured by weighting 75 percent on property wealth as measured by a town’s Equalized Net Grand List Per Capita, and 25 percent on income wealth as measured by a town’s Median Household Income. In addition, under the Executive Order, non-Alliance Districts do not have a minimum aid ratio, while the minimum aid ratio for Alliance Districts is 5 percent.

We hope you find this analysis of the impact of the governor’s Executive Order Resource Allocation Plan on state education funding both helpful and informative. Should you have any questions or comments regarding this information, please email us at info@ctschoolfinance.org.