Katie Roy Testifies on New ECS Formula and Governor's Proposed FY 2019 Changes to State Education Funding

Legislative Testimony

Testimony Regarding H.B. 5035, An Act Adjusting the State Budget for the Biennium Ending June 30, 2019

Katie Roy, Director & Founder
Appropriations Committee
Thursday, February 22, 2018

Chairpersons Formica, Osten, and Walker, Ranking Member Ziobron, and distinguished members of the Appropriations Committee:

Thank you for the opportunity to provide written testimony regarding H.B. 5035 and Governor Dannel Malloy’s proposed fiscal year 2019 budget adjustments for state funding for elementary and secondary education.

My name is Katie Roy and I am the director and founder of the Connecticut School Finance Project, a nonpartisan, nonprofit policy organization based in New Haven that works to identify solutions to Connecticut’s school funding challenges that are fair to students, taxpayers, and communities.

Although it contained cuts that were painful to make and difficult for school districts and communities across the state to face, the bipartisan budget passed and signed into law in October did take steps in the direction of more equitable education funding for Connecticut’s nearly 540,000 public school students.

Along with putting a new Education Cost Sharing (ECS) formula into statute and moving away from — beginning in FY 2019 — the practice of allocating ECS funds to towns via arbitrary block grants, the ECS formula passed by the General Assembly incorporates several key elements to establishing a fair and equitable school funding system for Connecticut. For example, the formula includes an English Learner weight, as well as a weight for districts that serve high concentrations of low-income students, and uses a more balanced measure of property wealth and income wealth.

A side-by-side comparison of the new ECS formula to the most recent version of the formula is available at

While we are glad the governor’s FY 2019 proposed budget adjustments maintain the overall structure of the new ECS formula and do not delay the implementation of the formula, there are several areas where the ECS formula — and Connecticut’s school finance system as a whole — can, and should, be improved.

An analysis of the school finance changes contained in the governor’s proposed FY 2019 budget adjustments is available at

More than 10 Different Funding Formulas
Under the bipartisan budget and the governor’s FY 2019 budget adjustments, the new ECS formula only applies to local public schools and maintains Connecticut’s complex and disjointed system of more than 10 different education funding formulas. All other types of Connecticut public schools (magnet schools, local and state charter schools, the Connecticut Technical High School System, agriscience programs, and the Open Choice program) continue to be funded by different formulas/statutory amounts.

While the new ECS formula takes into student and community needs into account and provides additional resources for students who are low-income or English Learners, this is not the case for Connecticut’s other school funding formulas. These formulas continue to not be based on student and community needs, and are instead largely arbitrary.

Counting Low-income Students
Low-income students continue to be identified — for purposes of allocating additional funding through a low-income student weight and a concentrated poverty weight — in the new ECS formula based on whether they are eligible for the free and reduced price meals program of the U.S. Department of Agriculture, known in Connecticut as free and reduced price lunch (FRPL).

Unfortunately, the use of FRPL-eligibility as a proxy for identifying low-income students has become functionally unusable for the purposes of a school finance system. The need for a more accurate, verifiable proxy for low-income students is growing quickly as a result of the Community Eligibility Provision (CEP) of the federal Healthy, Hunger Free Kids Act of 2010, which allows all students to receive no-cost meals if their school or district qualifies and participates. To qualify for CEP, at least 40 percent of a school or district’s enrollment must be identified as eligible for FRPL via direct certification.

Since its introduction in 2010, CEP participation rates have increased annually and are likely to continue increasing as more and more eligible schools and districts adopt the program. While CEP is a valuable nutrition program for students, families, and school districts, it makes FRPL functionally unusable as a proxy for low-income students.

CEP causes FRPL rates in participating schools and districts to be inaccurate because all students receive no-cost meals through CEP, regardless of family income. Additionally, because CEP eliminates the need for families to submit applications to be eligible to receive free and reduced price meals, it will no longer provide individual, student-level data for all eligible students — further resulting in imprecise FRPL identification rates.

For the 2017-18 school year, 33 local public schools districts and an estimated 148,000 Connecticut students were participating, eligible to participate, or near eligible to participate in CEP. With nearly one-quarter of Connecticut’s students receiving no-cost meals through CEP, and participation in the program expected to continue increasing, the use of FRPL as a proxy for low-income students is not a useful measure. As a result, an alternative proxy for measuring low-income students will need to be identified in order to effectively and accurately provide critical resources to higher-need students under the new ECS formula.

Funding Special Education
State aid for special education continues to remain “incorporated” into the ECS foundation amount. Continuing this practice, while also reducing total ECS spending (compared to FY 2017 levels) in FYs 2018 and 2019, puts Connecticut at further risk of violating its federal maintenance of support (MOS) requirement, which is the primary fiscal measure by which states are judged to be eligible for federal funding under the Individuals with Disabilities Education Act (IDEA).

To be eligible for federal IDEA funding, a state cannot provide less state financial support for special education than it did in the preceding fiscal year. If a state is found to have failed to maintain support, the U.S. Secretary of Education may reduce federal funds to that state.

By leaving special education funding incorporated into the ECS formula’s foundation, and then reducing ECS funding, Connecticut runs a serious risk of violating its MOS requirement, which could result in the U.S. Department of Education reducing federal IDEA funding to the State.

Under both the bipartisan budget and the governor’s proposed FY 2019 budget adjustments, the combined special education funding through ECS and the Excess Cost grant could fall short of the level required to fulfill the State’s MOS requirement.

Sticking to the Phase-in Plan & Funding the Formula
Connecticut previously stopped using the ECS formula because the State did not have enough money to fund the formula’s phase-in plan. Connecticut could now find itself in a similar situation.

With Connecticut facing significant fiscal challenges, it is critically important for the General Assembly to use an equitable formula for distributing state education aid that it can pay for and adhere to, and not return to the practice of arbitrary, political, and inequitable block grants.

Based on the bipartisan budget, the new ECS formula is scheduled to be phased-in over 10 years, and over that period, would increase overall ECS funding by an estimated $380 million to reach full funding — including an increase of $88.9 million in FY 2019 over FY 2018 funding levels when the November 2017 budgetary holdbacks are included.

Potential declining revenues and continued growth of fixed costs, including unfunded pension and debt service obligations, are expected to stress the State’s finances for the near future, potentially causing large deficits. As Connecticut faces significant fiscal challenges ahead, the State should avoid not fully funding the formula or abandoning it altogether like it has in the past. Additionally, the General Assembly should fulfill its commitment to funding other education grants at the levels agreed to in the bipartisan budget, including grants for Priority School Districts, magnet schools, state and local charter schools, the Connecticut Technical High School System, and the Open Choice program.

As you consider the governor’s proposal and possible adjustments to the FY 2019 budget, we ask that you take these areas for improvement into consideration, and continue to take steps toward a truly equitable school finance system for all of Connecticut’s public school students.

Thank you again for allowing me the opportunity to submit written testimony regarding H.B. 5035, and please feel free to contact me should you have any questions.


Katie Roy
Director & Founder
Connecticut School Finance Project