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Analysis of Revised Executive Order Resource Allocation Plan: State Education Funding

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On Friday, August 18, Governor Dannel Malloy released revisions to his Executive Order Resource Allocation Plan that has been in effect since July 1 after the Connecticut General Assembly did not pass a budget before the start of the new fiscal year.

Just like the original, the Revised Executive Order Resource Allocation Plan covers all of fiscal year 2018 and funds state government operations while the General Assembly continues budget discussions and negotiations. At any time, however, the legislature can pass a budget, which, when signed by the governor, would supersede the Revised Resource Allocation Plan.

The governor’s Revised Executive Order Resource Allocation Plan contains significant changes to state education funding, including a more than $557 million cut (from FY 2017 funding levels) to the Education Cost Sharing (ECS) grant, which is the primary vehicle for state education funding to local and regional school districts. 

As we noted in our July analysis of the governor’s original Resource Allocation Plan, the deep cuts to education funding, as well as the cuts to municipal aid and other important services, contained in this Revised Executive Order Resource Allocation Plan are a product of Connecticut’s projected $1.6 billion deficit for FY 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 Revised Resource Allocation Plan means for state education funding, the Connecticut School Finance Project has prepared an independent analysis that compares state education funding for FY 2017 with the projected state education funding for FY 2018 under the governor’s Revised 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/Revised-Executive-Order-Resource-Allocation-Plan-Analysis.pdf.

Under the Revised Resource Allocation Plan, Connecticut’s 30 Alliance Districts – identified as the state’s “lowest-performing districts” – are “held harmless” and would each receive the same amount of ECS funding as they received in FY 2017. For the other 139 local and regional school districts, the Revised Executive Order Resource Allocation Plan takes into consideration a town’s total municipal expenditures from FY 2017, and what percentage of those expenditures were funded by state aid. According to the Office of the Governor, on average, 22.24 percent of a Connecticut municipality’s total expenditures are funded with state revenue. Fifty-four non-Alliance districts, whose towns’ total municipal expenditures are funded by more than 22.24 percent state revenue, will receive a portion (ranging from 10-60 percent) of their FY 2017 ECS grant. Eighty-five non-Alliance districts, whose towns’ total municipal expenditures are funded by less than 22.24 percent state revenue, will receive no ECS grant.

Each town’s total ECS grant is allocated in three payments, with 25 percent of the total grant being distributed to the town in October, another 25 percent being paid to the town in January, and the final 50 percent being distributed in April.

It is important to note that these cuts are amplified by cuts made in the Revised Resource Allocation Plan 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 Revised 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.”

In addition to the significant cuts to ECS funding, under the Revised Executive Order Resource Allocation Plan, special education funding remains partially incorporated in the ECS grant and the Special Education Excess Cost grant is increased to $143 million, which is an increase of $7 million over the FY 2017 appropriated amount.

We hope you find this analysis of the impact of the governor’s Revised 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.