OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-1
AN ACT INCREASING RESOURCES FOR STUDENTS, SCHOOLS
AND SPECIAL EDUCATION.
Primary Analyst: CF 4/9/25
Contributing Analyst(s): SB, DD, LD, LG, EMG, NN, BP, CR, CW
Reviewer: JS
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 26 $ FY 27 $
Resources of the General Fund GF - Potential
Revenue Loss
Up to 300
million
See Below
Teachers' Retirement Bd. GF - Potential
Cost
None 49 million
Resources of the UPE Trust UPE Trust - See
Below
See Below See Below
Office of Early Childhood GF - Cost See Below See Below
Education, Dept. GF - Savings 14,204,582 18,539,116
Policy & Mgmt., Off. MRSF - Savings 7.8 million 7.8 million
Education, Dept. GF - Cost 5,774,433 6,174,433
Treasurer GF - Cost 130,000 130,000
State Comptroller - Fringe
Benefits
1
GF - Cost 212,100 212,100
Treasurer, Debt Serv. GF - Cost See Below See Below
Connecticut Higher Education
Supplemental Loan Authority
(CHESLA)
CHESLA - See
Below
See Below See Below
Probate Court PCAF - Potential
Cost
See Below See Below
Note: GF=General Fund; PCAF=Probate Court Administration Fund; MRSF=Municipal Revenue Sharing
Fund
Municipal Impact:
Municipalities Effect FY 26 $ FY 27 $
Various Municipalities Revenue
Loss
7.8 million 7.8 million
Various Municipalities See Below See Below See Below
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 40.71% of payroll in FY 26. 2025SB-00001-R000637-FN.docx Page 2 of 11
Local and Regional School
Districts
See Below See Below See Below
Explanation
The bill establishes a universal preschool trust, eliminates Alliance
Districts, Educational Reform Districts, and the Commissioner's
Network of Schools, and makes various other changes resulting in the
fiscal impacts described below.
Sections 1 – 10 set up the Universal Preschool Endowment (UPE)
Trust and associated Board, describe eligible programmatic expenses
and reimbursements for the trust, and provide investment thresholds to
enable additional allowable uses of the trust.
Revenues of the UPE Trust
The bill requires up to $300 million of unappropriated General Fund
(GF) surpluses after the close of accounts for FY 25, and the entire
surplus if the Budget Reserve Fund (BRF) is at its maximum threshold
(18% of net GF appropriations for the current fiscal year) after the close
of accounts for FY 26 and beyond, to be transferred into the Universal
Preschool Endowment Trust. To the extent there are General Fund
surpluses at the close of FY 25, FY 26, and in the out years, there will be
a transfer of resources of the General Fund to the UPE Trust in each
fiscal year following the surplus year. General Fund surpluses would
otherwise be deposited in the Budget Reserve Fund (BRF), subject to
statutory requirements regarding the use of BRF excess when
applicable.
The bill also requires the resources of the UPE Trust be invested by
the Treasurer separate and apart from other state investments, but in the
same manner as several other state investment funds. Investment
revenues are indeterminate, as they are dependent on available
resources, market returns, and future investment decisions.
Expenses of the UPE Trust 2025SB-00001-R000637-FN.docx Page 3 of 11
To the extent revenues are deposited in the fund and amounts on
deposit in the fund meets or exceeds the amount needed to fund the
program, there will be ongoing annual administrative and investment
costs associated with the UPE Trust as a result of the bill starting no
earlier than FY 27. Administrative expenses include a one-time cost to
the State Treasurer associated with the establishment of the UPE Trust
of up to $100,000.
The bill allows the UPE Trust to enter into contracts for various
administrative, legal, and investment services. It also requires the
Treasurer and Commissioner of Early Childhood to enter into a
memorandum of understanding regarding information sharing, and
with the child care resource and referral agency designated by the
Commission of Early Childhood. The bill specifies the ongoing costs of
administering the UPE Trust are to be covered by the resources of the
fund. As such, there is not anticipated to be a cost to appropriated funds
or municipalities due to these sections.
Additionally, Section 9 exempts the UPE Trust’s property and
earnings from all state and local taxes. To the extent these would
otherwise be taxable, this precludes a revenue gain to the state and
municipalities.
Section 11 results in a cost to the Office of Early Childhood to
establish a state-wide Tri-Share Child Care Matching Program. The total
cost will be dependent on how many employers and employees sign up
for the program. The state portion of funds are to be paid out of the
Universal Preschool Trust. For context, under the program, costs for
child care are shared equally between participating employers,
employees, and the state.
Section 12 results in a cost to the Office of Early Childhood of at least
$1 million in FY 26 and FY 27 to contract with a consultant to create and
implement a centralized online enrollment portal.
For context, the portal must: 1) include information on early care and
education program slot availability; 2) determine eligibility for available 2025SB-00001-R000637-FN.docx Page 4 of 11
programs; 3) provide opportunities for families to apply for government
financial assistance; 4) allow designated beneficiaries to apply for
payments from the Universal Preschool Trust; and 5) estimate the
amount of tuition a family would pay after deducting subsidies and the
amount covered by the Universal Preschool Trust.
Sections 13 – 15 make procedural changes that have no fiscal impact.
Section 16 establishes regional education accountability review
boards for each planning region, to provide “intensive technical,
financial and other assistance” and “review and analyze all education
spending” of each Priority School District.
These requirements result in an additional annual cost to the Office
of the State Treasurer and the State Department of Education (SDE),
who are required to serve as chairs of each board, of approximately
$182,900 to each agency annually beginning in FY 26. Each agency
would require one additional full-time employee to address the
requirements of the bill for all planning regions and the budgets of every
Priority School District. Annual costs include $130,000 in salary and
corresponding fringe benefits of $52,900.
Section 17 has no fiscal impact. It makes procedural changes to the
annual expenditure report process between school boards and SDE.
Section 18 has no fiscal impact. It requires SDE to include a tool that
identifies students at risk of becoming disconnected in their chronic
absenteeism prevention and intervention plan. SDE already utilizes
such a tool.
Sections 19 – 21 have no fiscal impact. They make technical and
procedural changes to school boards' annual budget reporting
requirements.
Section 22 requires school boards and similar entities to collect and
report certain data quarterly and requires SDE to make it available on
their website, which results in annual staffing costs to SDE and
potentially districts starting in FY 26, and a one-time development cost 2025SB-00001-R000637-FN.docx Page 5 of 11
to SDE in FY 27. SDE will require one full-time Education Consultant
(annual salary of $130,000 and $52,900 in fringe benefits) and an IT
contractor ($50,000 annually) to collect new data from districts and
report quarterly on SDE's website. Additionally, there is a $400,000 one-
time development cost in FY 27 for SDE to create a new system for data
collection and integration.
There are potential staffing costs for school districts to collect and
report the required data quarterly, dependent on existing staffing levels
and their current data collection processes.
Section 23 has no fiscal impact. It requires schools to contact the local
homeless education liaison to determine if a student is homeless before
a school expulsion hearing and to take certain steps if the student is
homeless, which can be accomplished with existing resources.
Section 24 establishes a student success coach pilot program within
SDE for FY 26 through FY 28 and results in a cost of: (1) up to $16 million
for grants to certain districts, and a corresponding revenue gain of up to
$2 million for each of the districts, spread across the program's three-
year timeframe; and (2) $131,100 for the salary of an Education
Consultant staff position and associated fringe benefit costs of $53,400
per year to administer the program. The participating districts will be
Bridgeport, New Haven, Waterbury, New Britain, Hartford, Windham,
New London, and Norwich; these districts may apply for a grant.
Section 25 expands the school construction reimbursement program
to include standalone school air quality projects, which is anticipated to
increase long-term spending under the school construction program.
This will necessitate increased GO bond use and therefore increased
long-term General Fund debt repayment. The increased GO bond
spending will finance revenue gains to municipalities and school
districts for those future air quality projects that would not have been
funded under the standalone competitive grant program.
Sections 26 – 28 have no fiscal impact. They make conforming
changes associated with the bill's elimination of Alliance Districts and 2025SB-00001-R000637-FN.docx Page 6 of 11
the Commissioner's Network of Schools.
Section 29 applies the Housing Environmental Improvement
Revolving Loan and Grant Program and the pilot program for energy
efficiency projects, to eligible communities rather than Alliance
Districts. Alliance District towns that are not environmental justice
communities would no longer be eligible.
2
To the extent there is a
redistribution of grant funds, a municipality could experience a
corresponding revenue gain or loss.
Section 30 makes a conforming change regarding the elimination of
Educational Reform Districts to an existing mortgage assistance
program that the Connecticut Housing Finance Authority (CHFA)
administers and is not anticipated to result in a fiscal impact.
Sections 31 – 33 have no fiscal impact to the state. These make
conforming changes and replace Alliance Districts with literacy districts
for various programs. Alliance Districts will not be eligible for these
programs unless they are identified as literacy districts.
Section 34 has no fiscal impact. It expands the Early Childhood
Cabinet to include the executive director of the Connecticut Library
Consortium, and makes conforming changes to the cabinet membership
associated with the bill's elimination of Alliance Districts and
Educational Reform Districts.
Section 35 has no fiscal impact. It makes a conforming change
associated with the bill's elimination of Alliance Districts, regarding the
responsibilities of the Connecticut Technical Education and Career
System.
Section 36 has no fiscal impact. It expands eligibility for the Aspiring
Educators Diversity Scholarship to students who graduated from any
school district in Connecticut, rather than just Alliance Districts, and is
2
The "eligible communities" criteria is the 50 towns with the lowest equalized net
grand list. No Alliance Districts are currently in that group. 2025SB-00001-R000637-FN.docx Page 7 of 11
not anticipated to change the total amount of scholarship awards.
Sections 37 – 38 replace Alliance Districts with Priority School
Districts and with applicants that have previously received grants, for
priority consideration, within the CT Grown for CT Kids Grant Program
and for supplemental grants within the Local Food for Schools Incentive
grant program. To the extent there is a redistribution of grant funds, a
school district or municipality could experience a corresponding
revenue gain or loss. There is no anticipated cost to the state, as the
grants are capped.
Section 39 has no fiscal impact. It repeals a pilot program for
examining incidents of physical restraint and seclusion. The pilot
program has been completed.
Sections 40 – 41 replace Alliance Districts with Priority School
Districts for the ECS formula's minimum base aid ratio (i.e., state aid
percentage) and total entitlement hold harmless provisions beginning
in FY 26, resulting in an estimated savings to the General Fund within
the State Department of Education of $4,335,184 in FY 26 and $8,669,718
in FY 27.
3
There is a corresponding revenue loss to overfunded towns
that are classified as Alliance Districts and are not Priority School
Districts. There are 14 such towns in FY 26. The General Fund savings
and revenue loss to impacted towns continues into the future, growing
in magnitude through FY 32, when the overfunded towns reach ECS full
funding.
Section 42 has no fiscal impact. It makes a conforming change
associated with the bill's elimination of Alliance Districts.
Section 43 has no fiscal impact to the state. It applies a prohibition on
reducing a town's minimum budget requirement (MBR) to PSDs instead
of Alliance Districts. Districts that are Alliance Districts and not Priority
School Districts will be able to reduce their budgeted appropriations for
3
The bill and the current law formula (which is the comparison point) both resume the
ECS phase-out decreases to towns considered overfunded beginning in FY 26. 2025SB-00001-R000637-FN.docx Page 8 of 11
education in circumstances allowed by statute.
Section 44 alters eligibility for a school minor capital grants program,
which is funded through General Obligation (GO) bonds. Current law
limits eligibility to Alliance Districts, which the section replaces with
Priority School Districts. Future General Fund debt service costs may be
incurred at a different rate to the degree that it causes authorized GO
bond funds to be expended at a different rate than they otherwise would
have been absent the eligibility change.
As of April 1, 2025, there is an unallocated bond balance of $18 million
for the Alliance District grant program. The section does not change GO
bond authorizations.
This section would preclude a potential revenue increase for Alliance
Districts that are not also Priority School Districts, if awards would have
been given for otherwise eligible expenses.
Section 45 has no fiscal impact. It replaces Alliance Districts with
Priority School Districts for eligibility for the Municipal Aid for New
Educators Grant Program, which is not currently funded.
Sections 46 – 47 have no fiscal impact to the state. They expand
eligibility from Educational Reform Districts to Priority School Districts
for a wraparound services grant program and a science grant program,
which are not currently funded. There are six Priority School Districts
that are not also Reform Districts.
Section 48 makes technical and conforming changes to the Office of
Early Childhood statutes related to eliminating Alliance Districts,
which does not result in a fiscal impact to the state.
Section 49 has no fiscal impact. It makes conforming changes
associated with the bill's elimination of Alliance Districts, regarding a
grant program administered by the Office of Higher Education (OHE).
These changes are not anticipated to change the total amount of OHE
grant awards. 2025SB-00001-R000637-FN.docx Page 9 of 11
Sections 50 – 51 expand eligibility for an existing loan subsidy
program to any teachers employed by a local or regional board of
education, instead of being limited to only teachers in Alliance Districts.
The Connecticut Higher Education Supplemental Loan Authority
(CHESLA), a self-supporting, quasi-public agency, administers this
program. These sections may result in an increase in subsidies paid by
CHESLA via existing resources (originally funded through General
Obligation bonds) but they do not increase program funding or provide
any new funding sources.
Section 52 results in a cumulative revenue loss of approximately $7.8
million to various municipalities in both FY 26 and FY 27 and
corresponding savings to the Office of Policy and Management (OPM)
for the Tiered PILOT grant.
The bill replaces Alliance Districts with Priority School Districts in
the Tiered PILOT formula. Currently municipalities with an Alliance
District are considered tier 1 for the Tiered PILOT formula and are
guaranteed to receive at least 53% of the grant owed. Municipalities that
no longer have an Alliance District or Priority School District and do not
otherwise qualify as a tier 1 town will see a revenue loss in their Tiered
PILOT grant.
Section 53 applies the Neighborhood Assistance Act tax credit
program to Priority School Districts instead of Educational Reform
Districts. This does not result in any fiscal impact to the state as it does
not alter the aggregate annual $5 million cap on the program.
Section 54 alters eligibility for the Community Investment Fund
2030, which is funded through General Obligation (GO) bonds. Current
law limits eligibility to public investment communities and Alliance
Districts, which the bill replaces with public investment communities
and Priority School Districts. Future General Fund debt service costs
may be incurred at a different rate to the degree that it causes authorized
GO bond funds to be expended at a different rate than they otherwise
would have been absent the eligibility change. 2025SB-00001-R000637-FN.docx Page 10 of 11
As of April 1, 2025, there is an unallocated bond balance of $100.6
million for the Community Investment Fund 2030. The section does not
change GO bond authorizations.
This section would preclude a potential revenue increase for Alliance
Districts that are not also Priority School Districts or public investment
communities, if awards would have been given for otherwise eligible
expenses.
Section 55 allows the Probate Court Administration (PCA) to
establish truancy clinics in any area of state, which results in a potential
cost to the Probate Court Administration Fund (PCAF) to the extent that
truancy clinics are established.
Currently, there is only one such clinic that serves one elementary
school. In FY 23, $3,000 was expended to support this clinic. Most of the
work for the clinic is conducted on a volunteer basis. The bill (and
current law) does not require the work of the clinic to be conducted by
volunteers. Should a clinic be established without volunteers, it will
experience significant costs. It is unlikely that the PCA will establish
additional clinics.
Section 56 repeals numerous statutes, resulting in various fiscal
impacts.
Section 56 repeals the Commissioner's Network of Schools.
Eliminating the Commissioner's Network of Schools will: (1) require
SDE to significantly revise the federally approved Every Student
Succeeds Act (ESSA) Plan, which allows SDE to receive certain federal
funding; and (2) result in an annual General Fund savings of $9,869,398,
the amount equal to the Commissioner's Network budget line item
within SDE, starting in FY 26.
Section 56 repeals the statute placing limitations on the
reemployment of teachers receiving retirement benefits, resulting in a
potential cost to the Teachers’ Retirement Board of $49 million annually
beginning in FY 27 associated with the anticipated increase to the 2025SB-00001-R000637-FN.docx Page 11 of 11
Teachers’ Retirement System’s unfunded actuarial accrued liability
(UAAL). This increase assumes active members retire earlier or upon
accruing the maximum pension benefit to seek reemployment, which
effectively reduces employee contributions and increases the number of
pension beneficiaries being paid out of the system. Actual costs will be
realized through the actuarial determined employer contribution
established in the annual valuation.
Section 56 repeals Alliance Districts and associated restrictions of
eligible spending for the Alliance District portion of ECS funding. This
may alter how current Alliance Districts choose to spend ECS funding.
Section 56 repeals the school air quality competitive grant program.
Repealing the program will result in lower future debt service costs
from not using GO bonds previously authorized for the program. As of
April 1, 2025, the unallocated balance for the program is $138.5 million.
The section does not change GO bond authorizations.
4
Various other statutes are repealed in section 56, which do not result
in a fiscal impact as the repealed programs are not currently
administered or the statutes are procedural in nature.
The Out Years
The ongoing fiscal impacts identified above will continue into the
future subject to future municipal decisions, applications for the school
construction program, and the terms of any bonds issued.
4
The Governor’s proposed bond bill (SB 1247) eliminates the remaining $138.5 million
balance of authorized and unallocated bonds for the school air quality competitive
grant program.