OLR BACKGROUNDER: STATE FUNDING FOR INTERDISTRICT MAGNET SCHOOLS
By: Judith Lohman, Assistant Director
On July 9, 1996, the Connecticut Supreme Court ruled that the racial, economic, and ethnic isolation in the Hartford school district and those of its surrounding towns violated Connecticut's constitution and ordered the state to remedy that violation (Sheff v. O'Neill, 238 Conn.1).
Among the strategies the state adopted in response to the Sheff decision was to greatly expand its system of state-funded interdistrict magnet schools. Each of these schools has a specialized educational theme or focus designed to attract students from various districts, who voluntarily enroll in them. Since 1994, the number of state-funded interdistrict magnet schools has increased from five to 61.
Over the same period, the state's system for funding interdistrict magnet schools has become increasingly complex. This report describes the state's magnet school grants and how different types of magnet schools are currently funded.
TYPES OF INTERDISTRICT MAGNET SCHOOLS
Connecticut's interdistrict magnet schools operate according to two basic models: “host” magnets, which are operated by the school districts where they are located and RESC magnets, which are operated by regional education service centers (RESCs) or other types of nonprofit entities, such as colleges and universities, approved by the education commissioner.
Host and RESC magnets are divided into two subcategories: Sheff and non-Sheff magnets. Sheff magnets are interdistrict magnet schools that help the state meet the requirements of settlements agreed to by the state and the plaintiffs in the Sheff v. O'Neill case. Sheff settlements apply to Hartford and 27 towns in the Hartford region. Under the most recent Sheff settlement that runs from 2008 to 2012, the state is required to ensure a diverse educational experience for an annually increasing annual percentage of Hartford students. The Hartford area interdistrict magnet schools are a key part of the state's implementation plan for the settlement. To ensure its goals are achieved, the state provides higher per-pupil grants for interdistrict magnet schools located in the Hartford region compared to those located in other parts of the state. The interdistrict magnet schools in the Hartford region are referred to as Sheff magnets.
Interdistrict magnet schools located outside the Sheff region such as those in New London, New Haven, and Bridgeport, are called non-Sheff magnets because they are not part of the settlement.
MAGNET SCHOOL FUNDING
Interdistrict magnet schools receive a mixture of state and local funding. Local funding consists of tuition many magnet schools charge their students' home districts. Local districts that send students out of the district to magnet schools pay for magnet school tuition from state and local funding appropriated to them, including from local property taxes and state Education Cost Sharing (ECS) and other education grants. Local school districts that operate interdistrict magnet schools support their own students who attend those schools through local property taxes and state education grants.
The magnet schools receive state grants for three major expenses: (1) construction and capital costs, (2) operations, and (3) student transportation. The latter two grants are distributed on a per-student basis. Construction grants reimburse the magnet school's operator for up to 95% of the eligible cost of its construction. In addition, the education commissioner can provide supplemental grants to an interdistrict magnet school after conducting a comprehensive financial review of its operating budget, including all revenue and expenditure estimates. These supplemental grants depend on available appropriations.
Per-student grants are established in statute. They are based on annual appropriations, the number of qualifying schools, the number of students attending the schools and where they are from, and where the schools are located (CGS § 10-264l, as amended by PA 09-6, September Special Session, §§ 22 & 24).
Host Magnets Generally. Host magnet schools (other than those run by the Hartford school district – see below) receive a state grant of $6,730 for each enrolled student from a town other than the one operating the school. For each student who lives in the school's host town (the town operating the school), the state grant is $3,000. All towns, including towns operating interdistrict magnet schools, also receive an ECS grant for each of their students enrolled in the magnet school. This is because, under the ECS formula, students attending full-time interdistrict magnet schools are counted as if they are attending regular public schools in their home districts.
In some cases, the combination of the state magnet school operating grant and the ECS grant for its own students gives the host town sufficient funding so that it charges no tuition to other local school districts for sending their students to the school. In other cases, the host town charges tuition.
Hartford Sheff Magnets. For students from outside Hartford attending a Sheff magnet school operated by the Hartford school district, the city receives a state per-pupil operating grant of $12,000 for FY 10 and $13,054 for FY 11. For each Hartford student, the city receives $3,000, plus an ECS grant. In addition to these grants, for FY 10 the education commissioner may provide supplemental grants of up to $1,054 to Hartford for each out-of-town student attending one of its magnet schools. The supplemental grants must be approved by the Office of Policy and Management secretary and the Finance Advisory Committee.
In return for receiving these higher grants, Hartford is prohibited from charging tuition for any student enrolled in an interdistrict magnet school it operates.
Non-Sheff RESC Magnets. With two exceptions (see below), non-Sheff RESC magnets are grouped into two categories for purposes of determining their per-student grants: (1) those that enroll less than 55% of their students from a single town and (2) those that enroll 55% or more of their students from a single town. RESC magnets enrolling less than 55% of their students from a single town receive $7,620 annually for each student. RESC magnets enrolling 55% or more of their students from one town (the dominant town) receive $3,000 for each student from the dominant town and $6,730 for each student from the other towns.
The higher state grant for the former gives RESC-operated magnets an incentive to draw students from many towns and thus have a more diverse student body. Because RESCs do not receive ECS grants, RESC magnets commonly supplement their state operating grants by charging towns tuition for each of their resident students who attends the school. By law, RESC magnets must charge tuition equal to 90% for FY 10 and 100% for FY 11 and thereafter of the difference between their average per-pupil expenditures for the prior fiscal year and the state per-pupil operating grants plus any other revenue they receive (PA 09-6, September Special Session, § 22).
Non-Sheff RESC Magnets Receiving Special Grants. The 2009 education budget implementing act, established a separate per-pupil grant for Wintergreen and Edison magnet schools. The special grants apply to students from towns that make up more than 55% but less than 70% of Wintergreen's total enrollment and more than 55% but less than 80% of Edison's total enrollment.
Wintergreen receives $4,894 and Edison $4,250 rather than $3,000 for each student from their dominant towns (Hamden and Meriden, respectively). In addition, the schools receive the standard $6,730 for each enrolled student from the other towns (PA 09-6, September Special Session, § 22).
These higher per-student grants enable those schools to charge a lower tuition to their sending districts.
RESC-Operated Sheff Magnets. If a RESC-operated Sheff magnet enrolls less than 60% of its students from Hartford, its grant for each student is $9,695 for FY 10 and $10,443 for FY 11. If 60% or more of its students come from Hartford, its grants for those students are the same as the grants for any other RESC magnet enrolling more than 55% of its
students from one town, namely $6,730 for each student from a town outside of Hartford and $3,000 for each student from Hartford. These schools also charge tuition to sending towns.
Limits on RESC Magnet Operating Budgets
By law, when approving magnet school operating grant applications, the education commissioner must consider, among other things, the school's proposed operating budget and the sources of funding. However, for RESC magnets, the commissioner can only approve a budget if it does not exceed, on a per-pupil basis, the “maximum allowable threshold.”
The maximum allowable threshold is found by dividing the “net current expenditures” by the “average daily membership,” using data from two fiscal years before the fiscal year for which the grant is sought. The maximum allowable threshold is 120% of the state average of this amount. The State Department of Education (SDE) must establish the maximum allowable threshold by December 15 of the fiscal year before the fiscal year for which the grant is sought. If an applicant asks, the commissioner may waive the maximum allowable threshold requirement if he determines there are extraordinary programmatic needs.
An interdistrict magnet program that operates less than full-time, but at least half time, receives 65% of the above amounts.
The state, through its normal public school transportation grant program, provides funding for students transported to magnet schools in their home districts. It provides a separate grant for students transported out-of-district. The latter grant reimburses the reasonable costs of such transportation up to $1,300 per student for those attending non Sheff magnets and up to $1,400 per student in FY 10 and $2,000 per student in FY 11 for students attending Sheff magnets. Expenditures over these limits may be submitted for reimbursement in the following year through the normal school transportation grant (CGS § 10-264i, as amended by PA 09-6, September Special Session, § 25).
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 can cover the cost of
purchasing, constructing, extending, replacing, leasing, or performing major alterations in interdistrict magnet school facilities. The state funds these grants through general obligation (GO) bonds (CGS § 10-264h).
In addition, for FY 09 and FY 10, the state has allocated a total of $7 million in GO bond funding for capital start-up cost grants for new interdistrict Sheff magnet schools. These grants may be used for (1) purchasing buildings; (2) portable classrooms; (3) leasing space; and (4) buying equipment, including computers and classroom furniture (PA 08-169, § 29, as amended by PA 09-2, September Special Session, § 63).