January 18, 2005
STATE-FUNDED INTERDISTRICT EDUCATION PROGRAMS
By: Judith Lohman, Chief Analyst
You asked us to explain the funding mechanisms for the following state-funded inter-district education programs: charter and inter-district magnet schools, the Open Choice Program, and vocational agricultural centers.
Although, in general, students are required to attend school in the school district where they live, the state provides several mechanisms for students from different districts to attend school together. These inter-district programs are wholly or partly funded by the state. Although funding mechanisms vary, in most cases state grants are provided on a per-student basis and several provide financial incentives for districts and programs to include students from as many districts as possible.
STATE CHARTER SCHOOLS
Connecticut law allows both state and local charter schools, but currently all Connecticut's charter schools are state charter schools. This means that the State Board of Education has approved their programs and operating plans. Charter Schools are funded by the state and may also receive federal and private funds. School districts do not participate in charter schools other than to provide transportation to school in certain cases. Student attendance is voluntary.
Each state charter school receives an annual state operating grant of $7,250 for each student enrolled in the school. By law, if the annual appropriation for charter school grants for any year exceeds $7,250 per student, per-student grants must be proportionately increased. But the increase for FY 2005 is limited to $110 per student. At the end of any year, a charter school may retain any unspent grant funds. It may use up to 10% of the amount for expenses in the following year and may deposit up 5% in a reserve fund to finance a specific capital or equipment purchase (CGS § 10-66ee).
No Education Cost Sharing (ECS) grants are paid for students attending state charter schools, either to the school or to the student's home district (CGS § 10-66ee (a)).
For FYs 2002, 2003, and 2004, charter schools whose charters were renewed in FYs 2001, 2002, or 2003 could apply for a state grant of up to $500,000 to help them finance new capital projects or repay debt incurred for prior capital projects (CGS § 10-66hh).
The school district where the charter school is located must provide transportation to any of its students attending the charter school unless the school makes other arrangements. Any district may voluntarily provide transportation for any of its resident students to a charter school in another district. In either situation, the district providing transportation to a charter school is eligible for state reimbursement for those costs in the same way it receives state reimbursement for other public school transportation costs (CGS § 10-66ee(f)). The state reimburses districts for public school transportation costs on a sliding scale from zero to 60%, depending on district wealth.
INTERDISTRICT MAGNET SCHOOLS
There are two kinds of magnet schools in the state: “host” magnets, which are operated by the school districts where they are located, and magnet schools operated by regional education service centers (RESCs). All inter-district magnet schools are funded by a mixture of state and local funding. Some schools also receive federal and private funding and part-time arts magnets may also charge tuition to students' parents.
Construction and Capital Costs
The state reimburses 95% of the eligible capital costs for an inter-district magnet school. Reimbursements are made through the state's regular school construction grant program and process and can cover the full cost of purchasing, constructing, extending, replacing, leasing, or performing major alterations in inter-district magnet school facilities (CGS §10-264h).
State funding for magnet school operating costs is tied to the ECS foundation amount, which is currently $5,891 per student. Magnet schools receive a percentage of the foundation amount for each student who attends the school. The per-student amount depends on the enrollment mix among communities and is set according to a formula that gives schools an incentive to attract a significant share of students from each participating district.
For each student from a participating district whose students make up 30% or less of the magnet school's total enrollment, the state grant is up to 90% of the foundation amount, or $5,302 per student. For a district whose students make up between 30% and 60% of the school's enrollment, the grant is between 60% and 90% of the foundation amount in inverse proportion to its percentage of the school's enrollment. And the grant for a district whose students are 60% to 90% of the magnet school's enrollment is between zero and 60% of the foundation amount in inverse proportion to its enrollment percentage.
If the magnet program operates less than full-time but at least half time, the grant amount is 65% of the above amounts (CGS § 10-264l).
Funding is provided through the normal state school transportation grant program for students transported to magnet schools in their home districts, and through a separate grant of up to $1,200 per student for students transported out-of-district. Expenditures over the $1,200 limit may be submitted for reimbursement in the following year in the normal school transportation grant (CGS § 10-264i).
In FY 2004, the legislature directed at least $1 million of the $57.8 million appropriation for magnet schools to supplemental grants to RESC-operated magnet schools.
For FYs 2003 and 2004, the education commissioner was permitted to give supplemental grants, within available appropriations, to enhance educational programs at magnet schools. He first had to review and approve schools' total operating budgets, including all their revenue and spending estimates.
In FYs 2001 and 2002, RESC-operated magnet schools received additional aid from surplus funds.
School districts receive ECS grants for their students who attend inter-district magnet schools.
Host Vs. RESC-Operated Magnet Schools
Both host and RESC-operated magnet schools receive the same state magnet school grants. But RESC-operated magnet schools receive no ECS grants for any of the students who attend the school. For ECS purposes, those students are counted as attending school in their home districts. On the other hand, school districts operating host magnets receive ECS funding for students from the district who attend the magnet school. And like the RESC schools, they also receive a state magnet school operating grant for each of those students.
Host districts can often meet their magnet school operating costs entirely from the ECS grants they receive for their own students attending the schools, plus the state per-student magnet school operating grants. As a result, these host magnets may not charge tuition to participating districts sending students to the magnet. This tuition-free host magnet model was pioneered by New Haven and is currently also in effect at some magnet schools in Waterbury and Hartford.
Since RESCs do not receive ECS grants for students attending the magnet schools they operate, those schools typically charge tuition to districts sending students to them. For RESC-operated magnet schools, sending district tuition is a significant source of operating funds.
OPEN CHOICE PROGRAM
The Open Choice Program is a voluntary inter-district attendance program that allows students from large urban districts to attend suburban schools and vice versa, on a space-available basis. Its purpose is to reduce racial, ethnic, and economic isolation; improve academic achievement; and provide public school choice.
Funding for Districts
Under the program, a school district that accepts students (“receiving district”) receives up to $2,000 annually for each out-of-district student it educates under the Open Choice program. For each Open Choice participant, the student's home district (“sending district) receives 50% of its regular per-student ECS grant, while the receiving district receives 50% of its regular per-student ECS grant. The two amounts are different because urban districts, which are the most common sending districts, receive higher per-student ECS grants than most suburban districts, which are the most common receiving districts
If the education commissioner determines as of October 15th each year that actual enrollment in the program is lower than the number of students for which funds were appropriated, she may allocate up to $350,000 of the excess to supplemental grants of up to $1,000 per student. These excess funds must be distributed pro rata to receiving districts for any students who attend the same school as at least nine other Open Choice students (CGS §10-266aa (g), (h), and (k)).
Funding for RESCs
The RESCs coordinate the Open Choice program. They determine the number of empty seats in each school district in their areas available to program participants, run any necessary program lotteries, and provide transportation to participating students. The SDE gives each RESC an annual grant to help it administer the program in its area. SDE also gives RESCs grants for the reasonable transportation costs for the program. Transportation grants cannot exceed a statewide average of $2,100 for each student transported. But the education commissioner can use any unspent appropriations to give RESCs additional money for transportation (CGS § 10-266aa(f)).
REGIONAL VOCATIONAL AGRICULTURE CENTERS
The law allows local school boards to make agreements to establish regional vocational agriculture (vo ag) centers for their students in conjunction with their regular public school system. Local school boards that do not offer vo ag training must designate a school that their students interested in such training may attend.
Through its regular school construction grant program and process, the state reimburses school districts for 95% of the eligible costs of building and equipping a regional vo ag center (CGS § 10-65 (a)).
State Operating Grants
Districts operating vo ag centers receive annual state operating grants of $700 for each student enrolled in the center as of October 1 of the preceding year. Centers with more than 150 out-of-district students receive an additional $500 per student. A center that no longer qualifies for the $500 supplemental grant receives a gradually decreasing phase-out grant for the four successive years after it ceases to qualify. A district operating a center that is not eligible for either a full $500 per student supplemental grant or a phase-out grant, receives a supplemental grant of $60 per enrolled student.
If any funds remain after the distribution of these grants, all districts that operate centers receive an additional $100 per enrolled student. If funds still remain, they are distributed to districts operating centers with more than 150 out-of-district students based on the ratio of the number of out-of district students over 150 in each center to the total number of out-of-district students over 150 in all centers in the state (CGS § 10-65).
Districts operating vo ag centers may charge other districts annual tuition for each student they send to the center. Tuition charges cannot exceed 120% of the ECS foundation amount. Since the ECS foundation is currently $5,981, this means the maximum vo ag tuition is currently $7,177 per student per year. Tuition for students enrolled in shared-time programs is prorated (CGS § 10-65 (b)).
Sending districts are responsible for providing transportation for their students attending vo ag centers. The state reimburses the costs for the transportation on a sliding scale from zero to 60% based on the school district's wealth. The state must reimburse transportation costs exceeding $800 for any student attending a vo ag center at a rate 20 percentage points higher than the sending district's usual transportation reimbursement percentage (CGS § 10-64 (d)).