OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-5283
AN ACT CONCERNING THE EDUCATION COST SHARING
GRANT FORMULA AND THE FUNDING OF OTHER EDUCATION
PROGRAMS.
Primary Analyst: JS 4/12/22
Contributing Analyst(s):
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 23 $ FY 24 $ FY 25 $
Education, Dept. GF - See Below Savings of
1.2 million
Savings of
2.5 million
Costs of
237.4
million
Legislative
Mgmt.
GF - Cost 68,000 68,000 68,000
State
Comptroller -
Fringe Benefits
1
GF - Cost 27,560 27,560 27,560
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 23 $ FY 24 $ FY 25 $
All
Municipalities
See Below See Below See Below See Below
Explanation
The bill, which overhauls funding for five major state education
grants or programs, is anticipated to result in substantial costs
beginning in FY 25. The bill's costs to the Department of Education are
estimated to be $237.4 million in FY 25. Some of the additional state
funding essentially replaces town tuition, which the bill largely
1
The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 40.53% of payroll in FY 23. 2022HB-05283-R000469-FN.DOCX Page 2 of 6
eliminates. The bill also results in minor savings to the General Fund in
FY 23 and FY 24, due to changes to one grant. An overview of the FY
25 cost impacts by program is provided in the table below.
sHB 5283 Estimated Impacts to the General
Fund in FY 25
Program
FY 25 Cost
(In
Millions)
FY 25
Percent
Change
ECS 107.9 5%
State charter schools 22.7 18%
RESC Magnets 86.5 66%
BOE Magnets 6.4 5%
Vo Ag
1 13.9 74%
TOTAL 237.4 9%
1 Costs and increases to program operators may exceed these
estimates by amounts that cannot be determined, if the bill's
lifting of the Vo Ag out-of-district enrollment cap results in
more such students.
The bill additionally provides for annual, inflation-based grant
increases to state charter schools and to magnets operated by regional
educational service centers (RESCs) and Goodwin University,
2
beginning in FY 26.
The bill has a net positive impact to nearly all school operators in FY
25. The most substantial funding increases are to: (1) state charter
schools; (2) towns that are significantly underfunded in the Education
Cost Sharing (ECS) grant; and (3) RESC magnets. Savings are
experienced by towns that send many students to Vo Ag programs or to
magnet schools which currently charge tuition. The bill's impacts vary
by program, as described below in the table and text.
Finally, the bill results in an additional cost to the General Fund of
approximately $95,560 annually beginning in FY 23 associated with
hiring one nonpartisan analyst within the Office of Legislative
2
The RESCs and Goodwin University are referred to as "RESC magnets" in this fiscal
note, for simplicity. 2022HB-05283-R000469-FN.DOCX Page 3 of 6
Management. This will maintain the nonpartisan staff's ability to
model, upon request, potential changes to the programs affected by the
bill. Due to the bill's new grant structures, every request affecting
certain ECS components must also consider the impacts to two other
grants. This work will be complex and cannot be done within available
resources.
sHB 5283 Estimated Net Impacts to Program
Operators (Grant Recipients) in FY 25
1
Program
FY 25 Est.
Positive Net
Impact
(In Millions)
Number of
Operators With
Positive Net
Impact in FY 25
2
ECS 107.9 99 of 169
State charter schools 22.7 All 20
RESC Magnets 25.7 5 of 6
BOE Magnets 1.7 7 of 11
Vo Ag
3 1.8 3 of 20
TOTAL 159.8 Not applicable
1 The table includes the impacts of both the change in the state grant and
any tuition savings for operators. (A few BOE magnet and Vo Ag
operators currently pay tuition to other operators in the same program.)
2 Besides ECS, the operators without a positive impact are projected
to have no net impact from the bill in FY 25.
3 Increases to program operators may exceed these estimates by amounts
that cannot be determined, if the bill's lifting of the Vo Ag out-of-district
enrollment cap results in more such students.
ECS. The bill continues the phase-in and phase-out schedule for FY
23 and FY 24 with some adjustments that result in minor savings, and
then fully funds the underfunded towns beginning in FY 25 at an
estimated cost of $107.9 million (five percent) above current law.
3,4
These towns receive no further ECS increases after FY 25, under the
3
The bill contains language for FY 25 through FY 27 that makes the grants for some
towns incalculable. In order to produce an estimate for this fiscal note, the analysis
assumes that when determining whether a town is under- or over-funded, the basis is
how full funding compares to the town's grant for the previous fiscal year.
4
Under current law, the underfunded towns would continue to receive annual
increases and reach full funding in FY 28. 2022HB-05283-R000469-FN.DOCX Page 4 of 6
bill.
5,6
State charter schools. The bill results in: (1) in FY 24, a cost of
approximately $2.8 million to provide a small additional phase-in to the
formula in place for FY 23, and (2) in FY 25, an estimated cost of $22.7
million (an 18 percent increase) above FY 23 to fully fund the formula.
In FY 26 and beyond, annual inflation-based growth is projected to
increase costs by approximately $6.5 million to $7.9 million (four
percent) every year.
RESC magnets. The bill is projected to increase state funding to
RESC magnets by approximately $86.5 million (66 percent) in FY 25,
when a new funding system is adopted.
7
The bill's FY 25 net revenue
increase to the RESCs is approximately $25.7 million (13 percent); most
of the increase in state funding replaces lost town tuition revenue of
nearly $61 million (the aggregate savings to sending towns). In FY 26
through FY 30, costs are anticipated to rise annually by three percent
($6.8 million to $8.1 million), due to the net impact of inflation-based
increases and formula changes affecting the Sheff region operators. The
bill allows RESCs to charge tuition to sending towns if the inflation-
based increase is not funded, which may result in aggregate board of
education costs of approximately $9 million in a year.
BOE magnets. The bill is estimated to increase state grant funding to
BOE interdistrict magnet operators by $6.4 million (five percent) in FY
25, when a new funding system is adopted.
8
It is projected that seven of
the 11 operators will experience net increases, gaining approximately
$1.7 million in additional revenues and tuition savings collectively.
9
The
5
Unless required by changes in a town's student or town data components of the ECS
formula.
6
The bill's phase-out for towns considered overfunded by the formula continues
through FY 30, as in current law.
7
The new funding system for RESC magnets is based on applying the ECS formula's
student components to the RESCs' magnet enrollments, with an additional weight
(increase) for Sheff-region operators.
8
The new funding system for BOE magnets is based on the ECS student need levels of
the sending towns.
9
Two of these seven have flat revenue under the bill but also pay a small amount of
tuition to other BOE magnet operators, resulting in a marginal positive net impact. 2022HB-05283-R000469-FN.DOCX Page 5 of 6
other four operators are projected to have no impact, with revenues
equal to what was received on a per-student basis in FY 24 from both
state and town tuition sources (due to a hold harmless provision). The
bill's tuition elimination results in a savings of nearly $4.8 million
aggregately to the sending towns that do not operate these programs.
Vo Ag. The bill is anticipated to result in additional state costs of
nearly $13.9 million (increase of 74 percent) in FY 25, when a new
funding system is adopted;
10
however, nearly all the additional funding
replaces town tuition revenue that is eliminated by the bill. Three of the
20 Vo Ag operators are anticipated to experience net increases, totaling
approximately $1.8 million in additional revenues and tuition savings.
The other 17 are expected to see flat revenue and no impact. The bill's
tuition elimination results in a savings of approximately $12 million to
the sending towns that do not operate Vo Ag programs.
The bill's lifting of the cap on out-of-district Vo Ag enrollment,
beginning in FY 25, may produce a higher number of such students. If
that effect occurs: (1) Vo Ag operators may experience revenue gains
under the proposal, and (2) state grant costs will rise. The level of
impact depends on any growth in out-of-district Vo Ag students and the
student need levels of those students' towns.
The Out Years
The bill's projected annual costs (compared to current law) in FY 26
through FY 30 range from $207.6 million (FY 26) to $164.1 million (FY
29). Costs continue in FY 30 and beyond. The bill's fiscal impact is
subject to changes in many factors, including: (1) enrollment; (2) student
characteristics; (3) the number of students sent out-of-district from each
town to a Vo Ag program and to a BOE magnet; (4) new or closed
10
The new funding system for Vo Ag operators is based on the ECS student need levels
of the sending towns. 2022HB-05283-R000469-FN.DOCX Page 6 of 6
schools or programs; (5) tuition levels; and (6) inflation.
11
11
The analysis for this fiscal note relies on: (1) Oct. 2019 student data for the RESC
magnet, BOE magnet, and Vo Ag components; and (2) Oct. 2021 student data for the
ECS and state charter school components.