Adequacy & Equity: Issues in School Funding

1. Adequacy & Equity: Issues in School Funding Philip A. Streifer EDLR 478 Revision 2 for Fall 2006 Session III

2. Assignment before Class • Go to web site: http://www.csde.state.ct.us/public/dgm/reports/selectecssimp1.asp • Select your district • Execute to see the factors for calculating your state aid

4. Assignment Continued • Repeat this exercise over several districts ranging from ERG ‘A’ to ERG ‘I’ • Instead – compare these. Note: • Line 7: Grand List • Line 9: Per capita Income • Line 50: Total ECS aid • Avon • Torrington • Hartford

5. CCJF • Review UConn Public Policy Study – excellent review of ECS • Note slides 8 & 9 • Note slides 28 & 29 - Findings

10. From: CCJEF Overview by Town

13. Impact of the ECS Cap • Any provision that caps school funding or somehow veers from the intent of the ECS formula will impact the operational definition of adequacy and also probably equity • See CCJEF: ECS Allocations Over Past Due

16. Adequacy, Equity & Efficiency • Adequacy – where should the bar be set? • Equity – distribute funds equitably to achieve adequacy goals • Efficiency – are the schools achieving their goals?

17. Vermont Act 60 & 68 • Act 60: What happened in Vermont? • What did the Court do to remedy the problem? • Act 68: What happens when politics enter the equation: • Created a ‘safe harbor’ zone from minimal state aid requirement up to $10,000/pupil. Sliding scale from there.

18. Class Discussion I • As the State (Commissioner and State Board of Education) – what arguments would you put forth in defense of the current ECS distribution? • As the CCJEF Plaintiffs what arguments would you put forth to force a change in policy? • As members of the State Supreme Court – what issues would you raise and what solution would you put in place (if you found the current system unconstitutional)?

19. Models and Approaches • See WestED – From Equity to Adequacy

21. Alternative ECS Systems • See: Constructing New Finance Models that Balance Equity, Adequacy and Efficiency with Responsiveness by James W. Guthrie

22. ECS Alternative Systems

23. Class Discussion II • Do any of the models presented suggest support for the state’s case? That is, can you find evidence in any of these models to support the notion that the ECS formula is sound and should be retained? • Which models, if any, provide support and legitimacy for the plaintiffs case in the CCJEF case? • All issues considered (tax policy, tax impact, efficacy of model/approach/political reality) what do you think is the best approach overall for Connecticut should the courts determine that the current model of funding is unconstitutional?

24. Details on CT’s ECS Formula • Note Foundation provision and its current limits • Note State Guaranteed Wealth Level (SGWL) current limits

25. 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.

26. 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)

27. 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.

28. 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.

29. ECS Special Adjustment Factors - Initial Minimum (Stoploss) and Maximum (Cap) Grants For 2003-04, 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(N)(II) of the Connecticut General Statutes (C.G.S.) (1.012 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 153rd ranked town wealth. With 169 towns, the 153rd ranked town wealth represents wealth at the 90th percentile. If a town's wealth is at or below the 90th percentile, that town will receive the highest grant cap percentage (6 percent).

30. 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

31. No Longer Available On-Line!

32. Results of Simulation for Torrington raising the Foundation (SGWL) from 1.55 to 1.88