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Katie Roy Testifies Before Education Committee on Minimum Budget Requirement, S.B. 1068

Testimony Regarding S.B. 1068, An Act Concerning the Minimum Budget Requirement

Katie Roy, Executive Director & Founder
Education Committee
Monday, March 18, 2019

Chairmen McCrory and Sanchez, Ranking Members Bethel and McCarty, and distinguished members of the Education Committee:

Thank you for the opportunity to provide testimony in support of S.B. 1068 and the common sense changes it makes to the Minimum Budget Requirement (MBR).

My name is Katie Roy and I am the executive 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 and state funding challenges that are fair to students, taxpayers, and communities.

S.B. 1068 extends the existing provisions by which a non-Alliance District municipality may be exempted from, or permitted to reduce educational expenditures, under the MBR. Additionally, this bill provides some increased flexibility for municipalities by making two reasonable changes to the circumstances under which a municipality may reduce its educational expenditures under the MBR.

The purpose of the MBR is to ensure towns provide adequate local funding to their school district and prevent towns from using state aid targeted for education for non-education purposes.

S.B. 1068 extends the existing exemptions and circumstances under which a municipality may be able to reduce its MBR, including:

  • A non-Alliance District town may reduce its MBR if it experiences a decrease in ECS funding, however, the MBR reduction may not be more than the decrease in ECS funding;
  • The state’s 10% highest-performing districts do not have to adhere to the MBR;
  • Member towns of a newly formed regional school district do not have to adhere to the MBR during the first full fiscal year following its establishment;
  • If a district does not maintain a high school and the number of students for which it pays tuition has decreased, the district’s town may reduce its MBR by the difference between the number of students it paid tuition for in the previous year and the number of students it currently pays tuition for, multiplied by the cost of tuition;
  • The commissioner of the Connecticut State Department of Education may allow a town to reduce its MBR by a determined amount if the town’s school district has closed one or more schools due to declining enrollment;
  • If a district realizes new and documented savings through increased efficiencies approved by the Commissioner or through regional collaboration or cooperative arrangements, the town may reduce its MBR by half of the achieved savings, provided that amount does not exceed 0.5 percent of the district’s budget.

More information about these exceptions to the MBR, as well as information about the MBR itself, is available on the one-pager attached to my testimony as well as online at http://ctschoolfinance.org/assets/uploads/files/Minimum-Budget-Requirement.pdf.

In addition to extending these provisions, S.B. 1068 makes two common sense changes to the MBR. First, S.B. 1068 would allow non-Alliance District towns that have had declining enrollment to use a 5-year look-back period, rather than the current 1-year look-back period, to reduce their MBR as a result of declining enrollment. Non-Alliance District towns with declining enrollment would be allowed to reduce their MBR by the number of students by which their enrollment has declined over the past five years times 50 percent of the district’s net current expenditures per pupil. Towns could only use this provision once every five years. This provision makes more sense than a 1-year look-back period because it is more practical for school districts to make structural adjustments after a larger reduction in enrollment aggregated over several years.

Second, S.B. 1068 would permit towns to not include catastrophic insurance losses in the calculation of their MBR when they are self-insured. This is a logical provision to ensure a one-time increase in a school district’s budget due to catastrophic insurance losses — which are unrelated to the education of students — do not permanently increase a municipality’s minimum floor, and therefore, increase its MBR in perpetuity.

Thank you again for allowing me the opportunity to provide testimony in support of S.B. 1068 and its minor, but important, revisions to the MBR. I sincerely appreciate the Committee’s time and discussion of this bill, and I am happy to answer any questions you may have.

Sincerely,

Katie Roy
Executive Director & Founder
Connecticut School Finance Project