OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-5212
AN ACT CONCERNING EDUCATION FUNDING.
Primary Analyst: DD 4/22/24
Contributing Analyst(s):
Reviewer: JS
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 24 $ FY 25 $ FY 26 $
Education, Dept. GF - Cost 759,000 57.4
million
Net 180.2
million
Legislative Mgmt. GF - Cost - 84,275 84,275
State Comptroller - Fringe
Benefits
1
GF - Cost - 34,763 34,763
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 25 $ FY 26 $
Various Local and Regional
School Districts
Revenue
Gain
See Below See Below
Various Municipalities Savings 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 cost to the State Department of Education
(SDE) is estimated to be $759,000 in FY 24, $57.4 million in FY 25, and
$180.2 million (net of savings) in FY 26. The bill provides a small grant
increase to vocational agriculture (Vo Ag) operators in FY 24, partially
phases in the funding overhaul in FY 25, and fully implements the
overhaul in FY 26. Costs in FY 26 and annually thereafter are minimally
offset by a savings associated with the elimination of magnet school
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 41.25% of payroll in FY 25. 2024HB-05212-R000598-FN.DOCX Page 2 of 4
tuition assistance provided by SDE totaling approximately $8.4 million
annually as follows: (1) $4.6 million for East Hartford and Manchester;
and (2) $3.8 million for low-income families who send children to
preschool programs operated by certain magnet schools.
PA 23-204, the FY 24 and FY 25 budget, provided funding in FY 25
for grant increases to the programs affected by the bill. It is anticipated
that this funding will likely cover the cost of the bill's partial phase-in in
FY 25, along with the FY 25 current law increases to charter school
operators and the Education Cost Sharing (ECS) grant.
The bill also eliminates tuition to vocational agriculture and magnet
school operators. This results in annual savings beginning in FY 26 to:
(1) districts that pay tuition to vocational agriculture and magnet school
operators that charge tuition; and (2) parents who pay tuition for
preschool programs offered by certain magnet school operators. Under
current law, tuition is capped beginning in FY 25 at 58% of FY 24 levels.
The savings to districts from the tuition cap and elimination are
anticipated to be approximately $41.2 million in FY 25 and $95.8 million
in FY 26 (and annually thereafter).
2
The bill additionally provides for annual, inflation-based grant
increases beginning in FY 27 to: (1) state charter schools; and (2) magnets
operated by regional educational service centers (RESCs) and Goodwin
University Magnet Schools.
3
RESC operators in the Sheff region receive
an additional weight which is partially phased-down from FY 27
through FY 31, lowering those operators' gains from the inflation
increases.
The bill's estimated costs to the General Fund in FY 25 (due to the
partial phase-in) and in FY 26 (due to the full phase-in) by program are
2
This analysis includes tuition savings of $1.3 million in FY 25 and $5.4 million in FY
26 associated with additional seats in these fiscal years per the 2022 Sheff settlement.
It is possible some of this component of the savings will be experienced by parents of
preschoolers attending certain magnet schools (instead of by districts). The tuition
savings will grow in FY 27 and FY 28 as more seats are added.
3
The magnet schools run by RESCs and Goodwin University Magnet Schools are
referred to as "RESC magnets" in this fiscal note, for simplicity. 2024HB-05212-R000598-FN.DOCX Page 3 of 4
shown below.
Estimated Costs to the General Fund in FY 25 and
FY 26, sHB 5212 by Program
Program FY 25 FY 26
RESC Magnets 36.8 96.8
Board of Education (BOE)
Magnets 13.5 32.5
Vocational Agriculture 7.1 16.9
Open Choice - 28.5
State Charter Schools - 13.9
Elimination of Tuition
Assistance - (8.4)
TOTAL PROGRAM COST 57.4 180.2
Notes:
1. Estimates use FY 24 data provided in February 2024. The BOE magnets,
Open Choice and Vo Ag estimates use the ECS data for sending towns
from the March 2024 version of the FY 25 ECS calculations.
2. Estimates include the impact of magnet seat increases (for RESC and
BOE magnets, and Open Choice) as anticipated by the January 2022 Sheff
settlement. Adjustments were made to some anticipated seat increases
based on information from SDE.
3. Numbers do not sum due to rounding.
The Open Choice and state charter schools grant increases are
equivalent to the net gains to program operators. Most of the increased
grant funding for magnet school and Vo Ag operators, particularly in
FY 25, replaces lost tuition revenue. Exact impacts will vary among
operators due to the structure of the funding overhaul.
Nonpartisan staff cost. The bill results in an additional cost to the
General Fund of approximately $119,038 ($84,275 in salary and $34,763
in fringe benefits) annually beginning in FY 25 associated with hiring
one nonpartisan analyst within the Office of Legislative Management.
This will maintain the nonpartisan staff's ability to model, upon request,
potential changes to the programs affected by the bill. The bill's new
grant structures substantially increase the amount of time needed to
model any changes to programs affected by the bill. For example, due
to the bill's new grant structures, every request affecting certain ECS
components must also consider the impacts to several other grants. This
work will be complex and cannot be done within available resources. 2024HB-05212-R000598-FN.DOCX Page 4 of 4
Numerous factors. The bill's fiscal impact in FY 25 and annually
thereafter is subject to changes in many factors, including: (1)
enrollment, including enrollment changes related to the Sheff
settlement; (2) student characteristics; (3) the number of students sent
from each town to any of the affected programs; (4) new or closed
schools or programs (beyond those within the January 2022 Sheff
settlement); and (5) inflation.
The bill's grants to BOE magnets, Open Choice, and Vo Ag operators
depend in large part on the student characteristics of the towns sending
out-of-district students to the programs, which vary from year to year.
While in a year the average change across towns is typically small, the
change to the grant amount associated with students from any one town
can be large (either lower or higher). Any such changes will result in
different grant totals than projected above (impacting the anticipated
General Fund appropriations) and affect grants to the towns, districts or
RESCs operating the programs. In FY 25, used for this estimate, the
grant amounts for these students ranged from $11,551 (students sent
from New Canaan) to $15,856 (students sent from New London). The
median town grant amount for FY 25 is $12,570, up $86 (0.7%) from
$12,484 in FY 24.
The Out Years
The bill's projected annual costs to the General Fund (compared to
current law) in FY 27 through FY 30 range from $197.5 million (FY 27)
to $242.2 million (FY 30). Costs relative to current law will rise annually
beyond FY 30 due to the inflation provision for state charter schools and
RESC magnets. As discussed above, the fiscal impact of the bill depends
on many factors and will vary, possibly markedly, from this estimate,
and year to year.