Education Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-7019

Title:

AN ACT CONCERNING THE MINIMUM BUDGET REQUIREMENT.

Vote Date:

3/25/2015

Vote Action:

Joint Favorable Substitute

PH Date:

3/19/2015

File No.:

SPONSORS OF BILL:

Education Committee

REASONS FOR BILL:

This bill establishes increased flexibility for towns to reduce their minimum budget requirement (MBR), under current law. This bill would allow the per pupil MBR reduction to be 50% of the districts net current expenditure per pupil rather than a flat $3,000 as in current law.

SUBSITUTE LANGUAGE:


Changes the amount a town can reduce its MBR without review from the State Department of Education from 3% to 1.5%.

Eliminates the MBR for the top performing 10% of districts, rather than top 10 districts in raised the bill.

RESPONSE FROM ADMINISTRATION/AGENCY:

Dianna R. Wentzell, State of Connecticut, Department of Education: This bill proposes statutory revisions that would allow saving associated with reduced enrollment at a greater level than currently authorized. As written in Section 2, the Department has been supportive of additional flexibility for districts to count deductions towards MBR calculations. The commissioner testified that other proposed provisions of this bill, such as Resident Student deduction and waivers for certain districts could add further complexity and unintended consequences to MBR calculations.

Brendan Sharkey, State of Connecticut, Speaker of the House: The speaker testified in support of this bill. Ten years ago, the legislature enacted the MBR to ensure that education cost sharing (ECS) funding was being spent on education. Since that time school enrollment numbers have declined in most districts and the result has been a number of school districts struggling under MBR due to declining enrollment. He stated his support for this bill because it addresses issues while maintaining the intended safety net.

Tony Hwang, State of Connecticut, Senator 28th District: The senator testified in support of this bill. The proposed legislation makes changes to the MBR that would help municipalities better their education budgets, especially districts dealing with declining enrollment. This bill would: eliminate the current language that limits the amount per student that districts can reduce their budget from $3,000 to a formula that is 50% of the net current expenditure per resident student, eliminates the cap of one half of one percent that a district can reduce its budget, and exempts the top ten performing districts from having to comply with MBR.

Julia Pemberton, First Selectman, Town of Redding: The selectman testified in support of this bill. The town of Redding is among an increasing number of communities with well-funded, high quality public education that are dealing with rapidly declining enrollment. The current MBR statute provides insufficient flexibility to well-funded districts seeking to appropriately adjust to declining enrollments. The current $3K per pupil allowance falls substantially short of meaningful saving from enrollment decline in many communities that have well-funded schools.

NATURE AND SOURCES OF SUPPORT:

Betsy Gara, Connecticut Council of Small Towns: She testified in support of this bill. This would provide towns with considerably more flexibility under the state's MBR mandate to reduce education funding to reflect savings associated with declining enrollment. Connecticut's communities are committed to providing high quality education for their students. However, continued years of underfunding ECS grants, special education costs, and flat funding of many other categories of municipal aid are putting a considerable strain on local budgets. It has been widely acknowledged the ECS grant is underfunded, and has resulted in between 70%- 80% of municipal budgets of Connecticut towns being allocated to fund public education.

Suzanne Bates, Yankee Institute for Public Policy: She testified in support of this bill and stated that she agrees with this committee recognizing the need to change the MBR allowing towns to have greater flexibility. However, she stated that this bill does not go far enough and the MBR mandate should be repealed completely. The MBR stops innovation by not accepting that there are new and exciting ways to deliver quality education at lower cost. Population projections state the number of children from birth to age 19 is expected to shrink 10% by 2025 or roughly 30,000. She went on to comment that, the state is not attracting young families to this state because of the high cost of living.

Craig Szwed, Resident of Union CT: He testified in support of 7019. He stated he has lived in Connecticut since 1974 and experienced an ever increasing financial burden. As a disabled combat veteran on a fixed income he believes cuts need to be made and he cannot afford to live in this state under the status quo. However, he is staying to preserve the integrity of his family.

Susan Bransfield, Connecticut Conference of Municipalities(CCM): She testified in support of this bill because it would provide meaningful relief from the state-mandated MBR. Municipalities are required to budget at least the same amount for education for FY 15 as they did in FY 13. For non-Alliance Districts, ECS increase in FY 15 must also be used for education and will be subjected to MBR. This bill is needed in order for towns and cities to achieve efficiencies when state aid is frozen or reduced and education costs are increasing. The MBR has proven unfair to residential and business property taxpayers.

Mark H von Dwingelo, Connecticut Resident: Testified that he would like to see this bill amended to allow a reduction in annual school budgets commensurate with the enrollment trends for each district. Local governments have addressed this decrease with numerous cost savings methods. Despite, many of these cost savings, fiscally responsible proposals have been thwarted by existing Connecticut law which restricts MBR decreases.

Lon Seidman, Chairmain Essex Board of Education: He testified stating in many ways Essex has been doing all the things the state would like them to do: regionalizing expensive services through cooperative agreements with our neighboring towns, creating a single administrative team, and installing high efficiency boilers to reduce fuel costs. However, our enrollment is in a free fall and our student population is down 35% since 2010 and is projected to continue in a downward trend. He continued on to state he cannot justify to local taxpayers the MBR mandated budget level based on our enrollment projects.

Stephen Bristol, Resident of Clinton: He stated he has been an outspoken opponent of the Connecticut MBR law for years. However, he believes this bill does not stop the problem and the entire MBR must be scrapped. This bill only gives slightly more relief to towns than what is available under current law.

NATURE AND SOURCES OF OPPOSITION:

Ray Rossomando, Connecticut Education Assocation: He testified in opposition of this bill. Although this bill proposes to address MBR for districts experiencing declining enrollment, 119 school districts already receive less ECS aid than is owed to them. The association stated that until schools are fully-funded it is not fair to balance district budgets on the backs of students. The proposed bill would underfund necessary school funding because declines experienced across a district of 24 students does not equate to one less teacher or one less school bus. He urged the committee to reject the proposal.

Connecticut Assocation of Public School Superintendents(CAPSS): The Association testified in opposition to this bill. They did so for the following reasons: it would allow municipalities to reduce local school district budgets by an amount per pupil of declining enrollment that is greater than a school district saves per pupil of declining enrollment. The amount saved is nowhere near the 50% of the per pupil expenditure of the district. The enactment of this bill would result in school districts being allocated insufficient funding for services by municipal budgets.

Bernard Josefberg, Superintendent of Schools, Easton, Redding, and Region 9: The superintendent testified in opposition to the bill as currently written. He stated there are two revisions which he believes should be added: include language that requires concurrence between the BOE and the BOF to reduce appropriations beyond the limits of the existing statute, and in subsection (d) (7) add additional performance and local funding metric to expand the category of school districts exempt from the provision of this bill.

Connecticut Association of Boards of Education (CABE): The association testified in opposition to this bill because it would significantly weaken the MBR. They cited the existing language in Section 10-262i(d) of the General Statutes already gives the Commissioner of Education the opportunity to approve additional reductions in the MBR when a district realizes savings through intradistrict efficiencies or regional collaboration. CABE members have adopted a position urging the legislature to provide discretion to the Commissioner of Education to adjust the MBR in a situation where a local or regional board of education seeks relief due to significant enrollment changes.

Connecticut Association of School Business Officials(CASBO): The association testified in opposition to this bill. They stated they oppose this bill because: the state funding of education ECS has been flat for many years, budgets for BOEs and municipalities have been very tight for many years, and the proposed bill would create a divisive atmosphere among BOE's and municipal leaders. For those reasons, CASBO urges the Education Committee to reject proposed changes to the MBR statute.

Christy Ryan: Testified in opposition to this bill. She stated that towns need to consolidate costs and stop building new facilities. If more towns shared facilities it would significantly cut the costs of administration and facilities. She expressed that small towns like Ellington, Somers, Tolland, and Stafford would benefit.

Kimberly Ajavananda, Chair of the Redding Board of Education: She expressed her opposition to this bill and suggested one major change. She requested language be included to respect the cooperation between the town BOE and the town Board of Finance (BOF). This would preserve continuity and importance of joint agreements between BOEs and BOFs and their ability to ensure quality school services. She wants to ensure this bill does not empower a BOF to reduce the education budget by 3% without BOE concurrence.

Reported by: Joseph Paquette

Date: April 9, 2015