OLR Bill Analysis

sHB 7019

AN ACT CONCERNING THE MINIMUM BUDGET REQUIREMENT.

SUMMARY:

This bill extends, for fiscal years 2016 and 2017, the minimum budget requirement (MBR) for school districts and provides towns a greater ability to lower their MBR. The MBR prohibits a town from budgeting less for education than it did in the previous year unless, and with limits, the town can demonstrate a (1) decrease in school enrollment or (2) savings through increased efficiencies.

The bill affords towns greater ability to lower their MBR by (1) increasing the per-student reduction allowed for decreased enrollment, (2) raising the overall cap on how much a town can reduce its MBR, and (3) removing the limit on how many ways a town can qualify for MBR flexibility. The bill also completely repeals the MBR for school districts that have district performance index (DPI) scores (see BACKGROUND) in the top 10% of all districts in the state. Thus, there are no restrictions on these districts' ability to reduce their education budget.

It also makes technical and conforming changes.

EFFECTIVE DATE: July 1, 2015

CHANGES TO MBR FEXIBILITY

Under current law towns can ask the State Department of Education (SDE) for MBR reduction under only one of the ways provided in law. This means a town cannot seek a reduction for a decrease in enrollment and another decrease for increased efficiencies. The bill removes the limit, thus towns can use one or more MBR reduction mechanisms.

Table 1 shows the highlights of the bill's changes.

Table 1: Provisions of MBR Under Current Law and the Bill

Provision

Current Law

Under the Bill

Dollar reduction per student

$3,000

50% of the net current expenditure per student (NCEP)*

Maximum MBR reduction

0.5% of the MBR

1.5% of the MBR

or

more than 1.5% if education commissioner and the local board of education approve the entire amount of the reduction as determined under the bill's language

Districts in the top 10% of the state, based on DPI

Subject to MBR

Exempt from MBR

*For all school districts 50% of the NCEP per student is expected to be greater than $3,000, the flat number under current law. The 2013-14 statewide average NCEP is $15,729.

By law and unchanged by the bill, a school closing receives a dollar-for-dollar MBR reduction with no cap. Also unchanged under the bill is the dollar–for-dollar reduction for school districts without high schools that pay tuition to other districts to educate students who are residents of the district with no high school. The MBR flexibility for these students when enrollment drops is a dollar-for-dollar reduction.

DEFINITION OF NET CURRENT EXPENDITURES PER STUDENT

The bill defines net current expenditures per resident student as, in any school year, the net current expenditures, as defined in state law, for such school year divided by the number of resident students in the town for such school year. Resident students are the number of students living in the town that the school district has responsibility to educate (thus is does not cover students who graduate early or drop out of high school).

BACKGROUND

District Performance Index

A school district's DPI is its students' weighted performance on the statewide mastery tests in reading, writing, and mathematics given in grades three through eight and 10 or 11, and science in grades five, eight, and 10 or 11.

COMMITTEE ACTION

Education Committee

Joint Favorable Substitute

Yea

33

Nay

0

(03/25/2015)