PA 15-99—sHB 7019

Education Committee

AN ACT CONCERNING THE MINIMUM BUDGET REQUIREMENT

SUMMARY: This act (1) extends, to FY 16 and FY 17, the minimum budget requirement (MBR) for local education spending; (2) exempts certain high-performing school districts from the MBR; and (3) expands a town's authority to reduce its MBR under specified circumstances.

The MBR requires towns receiving Education Cost Sharing (ECS) grants to budget a minimum annual amount for education. Prior law allowed a town, with certain limitations, to reduce its MBR if it (1) experienced a decrease in student enrollment, (2) could demonstrate savings through increased efficiencies or regional collaborations, or (3) was a district without a high school that paid tuition for its students to attend high school out of town and the number of high school students declined. Prior law allowed a town to choose one of these three methods but allowed an additional method not tied to the others: MBR reduction for savings related to closing a school due to declining enrollment.

The act (1) maintains these permitted MBR reductions through FY 17, (2) increases the maximum MBR reduction for drops in student enrollment and establishes a new mechanism for such reductions, and (3) allows a town to reduce its MBR under more than one condition.

The act prohibits alliance district towns from reducing their MBR. (PA 15-5, June Special Session, 511, specifies the prohibition applies to current or former alliance districts. ) Under prior law, the education commissioner could approve an MBR reduction for an alliance district town if it could demonstrate that it had increased its local contribution for education in that fiscal year. Alliance districts are the 30 school districts with the lowest District Performance Index (DPI) (see BACKGROUND) in the state.

It also repeals obsolete language regarding the MBR and the minimum expenditure requirement (the MBR's precursor) and makes a number of technical and conforming changes.

EFFECTIVE DATE: July 1, 2015

MBR FOR FY 16 & 17

The act extends the MBR to FYs 16 and 17, while making several changes to it. Under the act, each town's base MBR is the amount it budgeted for education in the previous fiscal year plus any ECS aid increase received from the state.

The act exempts from the MBR school districts that have DPI scores in the top 10% of all districts statewide.

CHANGES TO MBR REDUCTIONS

Under prior law, towns could reduce their MBR by only one of the methods the law provided (a reduction due to a school closing was exempt from this restriction). These were reductions due to:

1. decreased enrollment,

2. documented savings from increased efficiencies or regional collaboration, or

3. declines in the number of high school students in districts without high schools that pay tuition for their students to attend high school out of town.

The act removes the limit on the number of these MBR reduction methods a town can use.

Reduction Due to Enrollment Decline

Under prior law, a town could reduce its MBR due to an enrollment decrease by $3,000 for each student no longer enrolled up to a limit of 0. 5% of the town's education budget for the previous fiscal year. The act increases the per student dollar amount to 50% of the school district's net current expenditure (NCE) per resident student.

The act defines NCE per resident student as, in any school year, the NCE (see BACKGROUND) for a school year divided by the town's number of resident students for the same school year. Resident students are the number of students that a school district must educate.

In addition, the act creates a two-tiered mechanism for determining the maximum MBR reduction for declining enrollment based on the percentage of students eligible for free and reduced price lunch (FRPL) under the federal school lunch law. Under this provision, districts with (1) 20% or more of their students qualifying for FRPL can reduce their MBR by up to 1. 5% and (2) less than 20% of students eligible for FRPL can reduce their MBR by up to 3%.

The act specifies that the decreasing student enrollment reduction for FY 16 must use the data of record as of January 31, 2015 and consider the decrease in the student count from October 1, 2013 to October 1, 2014. The student enrollment reduction for FY 17 must use the data of record as of January 31, 2016 and consider the decrease in the student count from October 1, 2014 to October 1, 2015.

Potential Additional MBR Reduction

Furthermore, the act allows towns in either FRPL tier to exceed the MBR reduction limits described above if (1) the education commissioner approves, following a review of the proposed reduction, and (2) the town's board of education approves by a vote held at a duly called meeting.

Other MBR Reductions Extended

The act maintains three other types of MBR reductions allowed in FYs 14 and 15 under prior law:

1. A town without a high school that pays tuition to other towns for its resident students to attend there and is paying for fewer students than it did in the previous year can reduce its MBR by the full amount of its lowered tuition payments.

2. A town can reduce its MBR to reflect half of any new and documented savings from (a) increased efficiencies within its school district, as long as the education commissioner approves the savings, or (b) a regional collaboration or cooperative arrangement with at least one other district. This reduction is limited to a maximum of 0. 5% of the FY 15 MBR.

3. A town that is permanently closing a school due to declining enrollment at the school in FYs 13 to 16, inclusive, may be granted an MBR reduction for FYs 16 and 17 in an amount to be determined by the education commissioner.

BACKGROUND

DPI

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. Under PA 15-5, June Special Session, 326-333, SDE is authorized to revise the performance index for measuring academic achievement.

NET CURRENT EXPENDITURES (NCE)

A district's NCEs are its total education expenditures, excluding (1) student transportation, (2) capital costs supported by school construction grants and debt service, (3) adult education, (4) health services for private school students, (5) tuition, (6) income from federally- and state-aided school meal programs, and (7) fees for student activities (CGS 10-261(a)(3)).

OLR Tracking: JM: RP: PF: cmg