Chapter I

Overview

Connecticut's system of public elementary and secondary education is made up of 166 local and regional districts, more than 1,000 schools, and about 562,000 students enrolled in grades pre-kindergarten through 12. A considerable amount of money is spent on elementary and secondary education in Connecticut -- over $6.5 billion in FY 2001. The state supported over 40 percent of those costs, which represented over 20 percent of the state budget.

This section presents an overview of Connecticut's primary and secondary education finance system as well as funding trends and patterns in education over the last several years. A comparison of Connecticut's education spending to other states is also provided.

Based on the information and analysis provided below, the committee makes the following findings about the overall trends in education finance.

• Total funding for education increased steadily since the early 1980s.
• Even though the state increased its support for education, its share of education expenses declined since 1990.
• Local governments still provide the majority of funding for education.
• As a percent of the total state budget, state funding for education was fairly flat in the mid-1990's, but has increased recently.
• While the vast majority of money the state allocates for education is distributed through the unrestricted ECS grant, more emphasis has been placed on specifically earmarked grants and school construction over the last several years.
• The wealthiest towns in Connecticut have the highest per pupil expenditures and the property-poor towns, while not the lowest, still lag about 20 percent behind the richest towns.
• The teacher retirement contribution made by the state on behalf of municipalities is one of the last significant disequalizing grants.
• In 1999, Connecticut was one of the top states when it comes to revenue raised per pupil for education. However, if education revenues are considered in relation to personal income, Connecticut raises less education revenue than 38 other states.
• Compared to other states, Connecticut is one of the most reliant on local government revenue to fund education.
• Overall school revenues declined as a share of personal income since 1992 from $46.08 to $43.84 per thousand.

Funding Trends and Patterns

Figure I-1 shows total funding for education in Connecticut from all sources, as well as funding just from state government. The figure indicates education spending increased significantly since 1981.

• Since 1981 total funding for education increased from $1.6 billion to $6.5 billion in 2001 - a 306 percent increase overall and a 71 percent increase since 1991.
• The largest increases in total spending (from 10 to 12 percent) occurred between 1986 through 1989.
• Total state funding over the 21-year time period increased from $525 million to $2.7 billion in 2001 - a 224 percent increase overall and an 80 percent increase since 1991.
• The largest increases in state funding (15 to 19 percent) occurred in 1987 through 1989. However, in 1991 and 1993 the state support declined by 7 and 2 percent respectively.

Figure I-2 presents education funding by source of revenue (local, state, and federal/other) on a percentage basis. The majority of funding for education has and continues to come from local government sources. Additionally, the figure shows the following statistics.

• Since 1980, the average share for state support of education has been 40.1 percent, local share 54.9 percent, while federal and other support was 5 percent.
• From 1980 through 1990, the average state share was 39.9 percent and local share was 54.8 percent. From 1991 through 2001, the average state share was 40.2 percent, while the average local contribution was 54.9 percent.
• Over the last two decades, the lowest percentage of state share was 31.7 percent in 1980.
• The highest percentage of state share was 45.5 percent in 1990 and declined through the decade before rising again to 41.4 percent in 2001.

As presented in Figure I-3, education spending in 1990 represented 23 percent of state spending and declined to 18 percent in the middle 1990s before rising again to 22 percent in 2000.

The majority of state education revenues - $2.0 billion (76 percent) in 2000- are allocated for state grants and direct aid to towns, though the state also supports the teacher's retirement system, the vocational technical schools, children who are in the state's custody and care, and other statewide services and support.

Figure I-4 shows the amount of state funding directed to towns by the three major types of aid: Education Cost Sharing grant program, categorical grants, and school construction grants. Funding trends include the following observations.

• The total amount of aid increased 33 percent -- from $1.5 billion in 1996 to just over $2.0 billion in 2000.
• ECS grant represents nearly 67 percent of the $2 billion distributed to towns.
• Categorical and construction grants increased 60 and 160 percent respectively over the five-year time period, while ECS increased by 8 percent.
• Categorical and construction grants increased as a share of state aid since 1996: categoricals from eight to 13 percent and construction from 10 to 19 percent.
• ECS grant as a share of state aid has declined from 82 percent to 67 percent.

The committee obtained total funding amounts for education for each town. The towns were divided into deciles based on equalized net grand list property wealth per student. Average total per pupil spending was calculated, excluding construction, for each wealth decile and is presented in Figure I-5.

• Average total per pupil spending is greatest at the top decile ($10,643), followed by the second decile ($9,336) and then the tenth decile ($8,889). The lowest are the sixth ($8,357), seventh ($8,213), and eighth deciles ($8,128).
• The difference between the top (first decile) and lowest (eighth decile) per pupil expenditure is $2,515 (31 percent lower), and the difference between the first decile and the tenth decile is $1,754 per pupil (20 percent lower).

Table I-1 shows teacher retirement contributions made by the state for each Educational Reference Group (ERG). The state's ERGs are designated by the State Department of Education and are designed to enable comparisons of districts that have a similar socio-economic status. School districts are grouped into nine ERGs, A through I, with A including the 12 wealthiest communities in the state and I comprised of the seven poorest large cities. Because of data limitations in apportioning the share of each regional district to each region's municipality, a detailed town-level analysis was not possible within the timeframe of this report.

The table also shows the percent of the total amount funded, percent of total pupils, and amount funded per pupil by ERG. Findings are summarized below.

• While often overlooked in school finance discussions, the state's contribution to the teacher retirement fund is the third largest single appropriation made by the state on behalf of education, behind the ECS grant and the school construction grant. In FY 01, the state contributed approximately $216 million to the teacher's retirement fund on behalf of the state's 166 school districts.
• The state contributed the most money (nearly 20 percent) on behalf of the municipalities in ERG I in total, which are comprised of the seven poorest cites.
• The state contributed more on a per pupil basis for the towns in ERGs A and B for teacher's retirement, which tend to be the wealthiest communities in the state.
• The teacher retirement contribution made by the state, is one of the last significant disequalizing grants.

Figure I-6 presents a comparison of revenue raised per pupil among the top states and the District of Columbia in that category according to the latest figures compiled by the U.S. Census Bureau. In 1999, Connecticut was one of the top states when it comes to revenue raised per pupil for education. At $9,864, Connecticut ranks fourth in the nation for elementary-secondary education revenue. When compared to other states, it can be noted:

• Connecticut ranks as the fourth highest state in the amount of revenue derived from local sources for education on a per pupil basis;
• when the states are ranked in relationship to the amount spent on education per $1,000 of personal income, total education spending in Connecticut ranks 39^th out of the 50 states and DC; and
• using the same per $1,000 personal income measure, Connecticut ranks 47^th for revenue derived from state sources and 13^th for revenue derived from local sources.

The result of measuring school revenue in relation to the state's total personal income is shown in Figure I-7.

• Overall school revenues have declined as a share of personal income since 1992 from $46.08 to $43.84 per thousand.
• The state's portion increased as a share of personal income since 1992 from $16.92 per thousand to $17.26, while local share declined over the same time period from $27.14 to $25.21.

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