Adequacy & Equity: Issues in School Funding

1. Adequacy & Equity: Issues in School Funding Philip A. Streifer EDLR 477 Fall 2003 Session III

2. Assignment before Class • Go to web site: http://www.csde.state.ct.us/public/dgm/reports/selectecssimp1.asp • Select your district • Run ‘Simulation’ – you will see the base factors for calculating your state aid • Run ‘Execute’ – you will see the detailed breakdown of all the ECS factors

3. Assignment Continued • Return one page where you can modify the various factors • Modify the ‘Foundation’ from its current max value (set by law) at $5,891 to $6000 and see what impact that has on your district’s total aid • Repeat this exercise over several districts ranging from ERG ‘A’ to ERG ‘I’ (see next slide)

4. Assignment Continued • Perform this modification of the Foundation Aid Level across at least these three districts: • Avon • Simsbury • Torrington • Hartford • Who wins/loses when the State adds to the Foundation aid level? Why????

5. Assignment Con’t • Increase the SGWL (state guaranteed wealth level factor) from 1.55 to 1.65 • Run Simulations for: • Avon • Simsbury • Torrington • Hartford • Your District • What happens? Who wins/loses? Why?

8. Foundation The foundation is a per weighted student amount. The foundation began a four-year phase-in at $3,918 in 1989-90 and increased 7 percent annually, reaching $4,800 in 1992-93. Under the original legislation, starting in 1993-94 and for each year thereafter, the foundation was to be a function of the regular education expenditures per need student of the town where the 80th percentile student resided when all towns were ranked on expenditures per pupil from three years prior. The intent was to help further reduce spending disparities between the wealthiest and poorest districts. However, the legislature froze the foundation at $4,800 through 1994-95. In 1995-96, the foundation was raised to $5,711, primarily to accommodate the consolidation of special education into the ECS funding formula. The foundation was raised in 1998-99 to $5,775 and again in 1999-2000 to $5,891, where it remains.

9. Connecticut towns. The definition of wealth also uses income, because the income from which taxes are paid has an important affect on town taxing capacity. ENGL = Equalized Net Grand List (3-year average) (CT Office of Policy and Management) PCI = Per Capita Income (U.S. Bureau of the Census) HPCI = Highest Town PCI MHI = Median Household Income (U.S. Bureau of the Census) HMHI = Highest Town MHI POP = Total Population (U.S. Bureau of the Census) Need = Need Students (CT Department of Education)

11. Pg 6 of the ECS Doc Town Base and Supplemental Aid Ratios The ECS formula was designed to allow towns to tax themselves at the same equalized rate to raise their relative shares of the foundation. The state makes up the difference up to the State Guaranteed Wealth Level (SGWL). The SGWL is based on the median town’s wealth times 1.55. In determining the state’s share of the foundation for each need student, each town’s wealth is compared to the SGWL. The higher the SGWL, the higher the overall state share. The original 1988 ECS legislation set the SGWL to twice the median wealth, whereby the median town would receive from the state exactly one-half of the foundation. The SGWL was reduced to 1.835 times the median in 1989-90, to 1.6551 in 1990-91, and further reduced to 1.5361 in 1991-92. In 1995-96, it was raised to 1.55 where it remains.

12. Town Base and Supplemental Aid Ratios The ECS formula was designed to allow towns to tax themselves at the same equalized rate to raise their relative shares of the foundation. The state makes up the difference up to the State Guaranteed Wealth Level (SGWL). The SGWL is based on the median town’s wealth times 1.55. In determining the state’s share of the foundation for each need student, each town’s wealth is compared to the SGWL. The higher the SGWL, the higher the overall state share. The original 1988 ECS legislation set the SGWL to twice the median wealth, whereby the median town would receive from the state exactly one-half of the foundation. The SGWL was reduced to 1.835 times the median in 1989-90, to 1.6551 in 1990-91, and further reduced to 1.5361 in 1991-92. In 1995-96, it was raised to 1.55 where it remains. The state aid percentage or base aid ratio is inversely related to a town’s wealth. However, commencing with the 1999-2000 grant, in no case can the aid ratio be less than 6 percent. Prior to 1999-2000, the minimum base aid ratio was zero.

14. ECS Special Adjustment Factors - Initial Minimum (Stoploss) and Maximum (Cap) Grants For 2002-03, the ECS formula continues to contain provisions which limit the increase in aid to a maximum of 6 percent. In establishing the maximum aid level, there are several different factors. First is base revenue which represents the previous year’s ECS entitlement, excluding any density supplements, grant cap supplements and any supplement pursuant to Section 10-262h(M)(II) of the Connecticut General Statutes (C.G.S.) (1.68 percent increase). Next is the establishment of each town’s grant cap percentages. This percentage, like the aid ratios, will vary from town to town based on the relationship between their wealth and specified state wealth levels. The grant cap percentage is a function of town wealth relative to the 153 rd ranked town wealth. With 169 towns, the 153 rd ranked town wealth represents wealth at the 90 th percentile. If a town's wealth is at or below the 90 th percentile, that town will receive the highest grant cap percentage (6 percent). In terms of minimum (stoploss) grants, for 2002-03, no town’s ECS grant, including density, can be less than a 1.012 percent increase over the prior year’s base revenue. There is a second Stoploss provision that guarantees that no town’s total ECS entitlement be less than their prior year’s total ECS entitlement. This provision is explained under Total ECS Entitlement.

16. Summary of Student Weighting In summary, each town’s total need student count is based on resident students adjusted for remedial performance (mastery count), poverty (TFA) and LEP: Need Resident .25 x .25 x .10 x Students = Students + Mastery Count + TFA Count + LEP Count

18. See Website for Results of Simulation for Torrington raising the Foundation from 1.55 to 1.88