Here we go again. The state legislature appears to be limping out of its 2008 session taking no action that will help cities and towns cope with the latest fiscal crisis. Once again local taxpayers will be forced to shoulder the load or face severe cutbacks in essential services. Education budgets—the biggest ticket item in most towns—are destined to end up squarely in harm’s way.

We in Connecticut, and taxpayers in other states across the country, will do what we always do in times like these. We’ll point accusing fingers at the State Capitol, and beat each other up at the local level when none of that will do any good. Not in the short run—and sadly not in the long run either.

I think the solution to this endless, cyclical dilemma lies with Uncle Sam and I’ll tell you why. For two hundred years the feds have hidden behind state responsibility and local control as justification for a smallish contribution to American education. In fairness, for much of the last two centuries, it wasn’t a bad strategy. Washington could be a silent minority partner, and get away with it. Times were different. Economic growth and opportunity were abundant for the educated and uneducated alike. Even a generation ago, many with limited education became the Greatest Generation—known for its amazing work ethic and incredible achievements.

In the latter stages of the 20^th century the picture began to change dramatically and the federal role with it. Education policy, with some funding attached, was handed down from the nation’s capital like never before. Title I (supplemental education), IDEA (special education), Head Start—just to name a few—became essential parts of the education fabric. Federal mandates, certainly well meant and necessary, supplanted local control in certain areas. But the Federal dollars have never matched the mandates—not then and certainly not now.

In the new century, No Child Left Behind (NCLB) has cemented public education at the forefront of national policy where I, for one, truly believe it belongs. America’s place in the global economy cannot be assured if education is not a national priority—perhaps the national priority—well into the future. But there’s a problem. A big problem. Our one time relatively silent partner has now firmly taken a seat at the policy table, but has yet to invest heavily enough in the enterprise commensurate with that seat.

Nationally the federal contribution lags at about 8% of total elementary and secondary education expenditures. In Connecticut, the federal share was 7% three decades ago when many of the new mandates were still young. It is now only about 5%. There aren’t many businesses where such a small share carries with it such a big voice.

As I said earlier, I believe that the future of America has never been so desperately dependent on the education of its people, and that national leadership is essential to that endeavor. However, I also believe that leadership must come with financial support that is also unprecedented in the history of this country. Federal education funding must become a national priority, perhaps the national priority, and it needs to happen now. So instead of berating your state legislators, or your local leaders, or just suffering your next property tax increase in silence, maybe you should send a message to your Congressional leaders. It’s time to reshape the national budget and put many more federal tax dollars where they will do the most good in the long run. Education!

The other shoe fell last week on the CT state budget surplus projection for the fiscal year ending June 30, 2008. What was thought to be a modest but healthy $260 million cushion just a couple or months ago has now been pegged at $16 million. Given a budget of $17.6 billion, we’re essentially talking zero at this point. The balance may even go negative when all is said and done. And while no one appears ready to conjure up a dire forecast for next year at this point, I don’t see much light when I look down the tunnel.

The surplus news has heightened the possibility that the spending plan already on the book for 2008/09—the second year of the biennium—may be allowed to stand. This would mean that some midterm changes that had gained support in recent weeks, like restoring funding for the Early Ready Program, would fall by the wayside. There are two big N’s at play here. One is Necessity. With revenues falling and the surplus gone, the wiggle room necessary for adding to the spending side has evaporated. The other is November. The fall elections are a clear disincentive to any measure that would raise additional revenue through any kind of tax increase. The only other option—reopening the budget and seeking agreement on some combination of pluses and minuses within the bottom line would be very difficult—even if the legislature went into extended session. Not a very promising scenario.

Meanwhile on the local front, some towns face double digit property tax increases just to meet the rising costs of current operations. Dwindling real estate revenues and weakening tax bases are pushing municipalities to the limit—maybe beyond the limit in some cases. We’ll find out as local budgets struggle through the final approval process in the weeks ahead. For example, in a story aired on WFSB last Friday, Middlebury taxpayers are looking at a 13% property tax increase for town services and its share of the Regional District 15 school budget. Based on an incomplete sample, several other towns have been dealing with proposed budgets—combined school and municipal services—that would mean tax increases of 8-11%.

So I have a question for you. Last I heard CT’s rainy day fund was just under $1.4 billion. At what point would you recommend that the state begin to tap into this resource to help weather the current economic situation? $1.4 billion sounds like a lot of money, but it’s only about 8% of the total state budget—about half of the percentage often recommended as a safe reserve. It’s likely the fiscal climate will be as bad or maybe worse next year. If that ends up being the case—will that be rainy enough for the rules of access to the fund to be invoked—or should we just wait it out and let local taxpayers or local services take the hits? I admit I don’t know that much about restrictions on the rainy day fund being used. If you do I would love to hear from you.

April 21st and 22nd are big days for the history of Connecticut and the Connecticut Coalition for Justice in Education Funding. This broad based advocacy organization—municipalities, school boards, professional education associations, unions, parents and students among its many members—will follow up an April 21^st news conference with a next day appearance before the State Supreme Court. The Coalition’s legal team will be presenting oral arguments in its fight for an “adequate” education for every Connecticut child. It will be appealing Judge Shortall’s lower court ruling that no entitlement to such a level of education exists under the state’s constitution.

I don’t doubt for a minute—and neither should you—that defining exactly what an adequate education should entail is no easy task. But that said, any difficulty in defining, quantifying or implementing the concept of adequacy in educational opportunity has no bearing on whether or not the entitlement exists.

Article Eighth, SEC. 1., of the State Constitution reads: “There shall always be free public elementary and secondary schools in the state. The general assembly shall implement this principle by appropriate legislation.” I’m no lawyer, and certainly not a judge. But it seems illogical to me that the framers direction to the general assembly to take “appropriate” action to carry out its educational duty could be satisfied by providing for an inadequate level of education. Consequently for me—and I hope the Supreme Court sees it the same way—the concept of adequacy is embedded in the constitutional instructions to the general assembly.

I also agree with the Coalition’s position that adequacy goes beyond the notion of equity, which—following Horton v. Meskill—has been the bedrock of Connecticut’s educational philosophy and much of its funding policy for thirty years. Unfortunately, while the funding philosophy and the formulas for equity have been in place for decades, the implementation has often lagged behind the intentions. This is currently the case with a one year old Education Cost Sharing (ECS) reform package that is already behind schedule. This billion dollar package—if fully funded sooner rather than later—could deliver the property tax relief everyone claims to support.

If this funding is delayed or derailed, both equity and adequacy will be diminished. Equity will be diminished whether or not towns make up for the ECS shortfalls with local dollars. Needier towns are less likely than more affluent ones to make up for the lack of state funding—decreasing the equalizing power of the ECS grant. And while more resources are not the only basis for adequacy, continued disparity of resources certainly reduces the chances for adequacy in those towns that rely most heavily on grants like ECS to support their education budgets.

It seems to me that, regardless of which way the court rules on adequacy, towns, boards of education, taxpayers, parents and children cannot afford to lose the current ECS funding battle.

Back from a much needed week in the warm Florida sunshine. Keeping on with last week’s theme of looking for positives in a negative climate, one of the first things I picked up on was the announcement of a plan to consolidate individual municipal health care programs into a larger self funded group program called the Enhanced Municipal Employee Health Insurance Plan. I haven’t seen all the details of the plan but it seems to be targeted and well suited to small to medium sized towns since some of the larger cities may already be operating under a large self funded program.

The April 2^nd press release indicated that a town of 1,000 employees counting teachers might expect annual savings in excess of $700,000. That’s impressive—and important given the spiraling costs of health care and other municipal budget pressures. Let’s try to put that figure in perspective.

If I eliminate the 50 largest communities in the state—again, many of the larger communities may already have the critical mass in their current plans to benefit from better rates through self insurance—that still leaves up to 120 towns that could conceivably participate. The 120 smallest towns spend over $2 billion on education. They spend 14-15% of that amount on employee benefits, about $280 million. I don’t know for sure, but would estimate that about 2/3 of that amount is for health benefits—maybe more since the state pays the teachers’ retirement contributions on towns’ behalf. Health costs have got to be the lion’s share of benefits in school districts.

Two-thirds of $280,000,000 is about $185 million. If the Enhanced Plan saves 5%, that could means as much as $9 million in savings statewide. Ten percent savings would mean $18 million. Put another way, each 1% reduction in costs could mean about $2 million in savings—or resources that can be put to use elsewhere in school budgets. If anyone knows more of the detail about the new plan, I would love to hear from you. I will try to track down some additional facts as well to see if any aggregate savings estimates have been computed by the planners. Meanwhile, hats off to the Comptroller and the leadership of small towns for coming up with a great way to stretch municipal resources. It couldn’t be better timed.

And anyone who would like to sound off on some other regional or statewide partnership—where pooled resources might yield a more economical or more effective service—please speak up. You may have the next great idea.

Some of you have rightfully pointed out that much of the information posted on “06106” so far talks about school funding negatives—a weakening economy, slowing state revenues, the threat to ECS phase-in, rising energy and health costs, looming local budget battles. You have gone on to suggest it would be a nice change to hear a suggestion or two of a more positive nature. I agree.

The problem—there’s that word again—is that viable options are a little harder to come by than challenges. But there are some positives, and I don’t mind throwing out a few ideas for the sake of discussion. I also don’t mind confessing up front to my own belief that the education dollar is the most important dollar in every state and local budget. But with that said, I think any real answers are not just about more dollars and higher taxes. I think it is equally—maybe even more—important that every education dollar go as far as it possibly can.

With the above in mind, I’d like to use the next two or three posts to talk about a couple of positive steps with potential benefits, both short and long term.

For both economic and ecological reasons energy consumption is—or should be—a big issue in all public buildings. I think that’s even truer for school buildings because of the teaching opportunities that can be derived from any program designed to a make a school building “greener.” Take, for example, a story about Wolcott School in West Hartford that appeared in the Courant earlier this week.

Wolcott’s principal has an impressive goal of converting the entire building from conventional energy to greener, more economical solar sources in five years. Other steps are being implemented now—modest in scope and potential savings—but important because they are easily doable. Every school in the state should have a program in place to a) stretch the energy dollar as far as is will go; b) plan for longer term permanent changes to greener energy consumption; and c) use the program as a teaching tool.

On a larger scale, the state legislature passed legislation in 2006 that will require school construction projects for new or renovated facilities to achieve a high rating based on national or global standards for energy or conservation. Read the statute and the reference to the green building standards here.

I have been told that projects authorized by the legislature in 2009 will be the first required to comply. That of course doesn’t prohibit towns with projects already in the pipeline to go “green.”

The thing I like about an energy initiative is that it is both near sighted and far sighted. There are small economic benefits to be achieved in the short run; and potentially greater savings in the long run—both resulting from a policy that promises added environmental and educational benefits. Kudos to the folks at Wolcott School in West Hartford!

Each and every year the State Education Cost Sharing (ECS) grant becomes a major bone of contention in the local budgeting process in many Connecticut towns. The question is always the same. Is ECS funding—especially any increase—making its way into the BOE budget, or is a chunk of it going to fill the proverbial pothole? With a couple of easily obtained facts and very little math, you can figure out whether a proposed or appropriated BOE budget includes some or all of any new state money.

Here is a list of the handful of readily obtainable numbers you will need to check this in your own town, and an example from my town of East Hartford.

Information available locally:

• 2007-2008 BOE Budget* $80.34 Million*
• 2008-2009 BOE Budget* $82.10 Million*

Information available from the State Department of Education (May be available locally if town/school officials have previously requested it from SDE):

• 2007-2008 ECS Grant $39.95 Million
• 2008-2009 Preliminary ECS Grant $41.71 Million

*Does not include town provided services called in-kind which may increase the actual total cost of education in many towns each year.

Budget increase: $1.76 Million

ECS increase: $1.76 Million

Tax Relief: $0.00

The BOE Budget increase is exactly equal to the ECS increase for 2008-09. Note that even with the entire increase being passed through, the BOE budget is only going up a very modest 2.2%–which I think is the real question for my town and for yours as well. Most BOE budgets will increase by at least the size of the ECS increase—often by much more. So do the math, make the ECS question go away, and focus your effort on the critical issue. Is the BOE budget, with or without new ECS, going to do the job or not?

It was nice to see the comments from several of you over the weekend. Hopefully it’s just the beginning, and more of you will see something in one or more of the comments that you would like to discuss. I am happy to answer factual questions if I can, and expand on earlier posts where you have expressed interest. But it will be great if the discussion evolves among you readers—so feel free to respond to any of the reader comments as well as the main posts. Agree or disagree as you see fit—but respectfully would be best.

For starters let me offer a little feedback to a few of the submitters:

To T.C. and Senior Citizen who both expressed concerns about the impact of Minimum Budget Requirement (MBR) provision on ECS funding:

I think you have hit on one of the potentially most problematic components of the new ECS program. I get it that that town tax bases have been overburdened for many because of ECS under funding, and that given a very large ECS increase, the MBR rules could help reduce that burden in some towns. (See February 15^th posting) My concern is that after a $180 (11%) million increase in 2007-08, the ECS growth for 2008-09 drops to $80 (4%) million. And if the financial position of the state does worsen going into the next biennium, what then? Will the ECS increase shrink as it has during past fiscal crises?

It certainly doesn’t make sense to allow almost half of new ECS aid to go for tax relief if the increase ends up being 4% or less over the next few years. I still think the first 4 or 5% of any year’s ECS increase should go to education and the option of tax relief should be limited to some portion of any increase in excess of that percentage.

I have seen one or two local appropriations passed in the last few days and plan to create an illustration of how ECS and the MBR for 2008-09 compare to the actual school budget increase. Look for a Thursday posting.

To Retired from DRG 1 (DRG = District Reference Group, a cluster of towns with similar socio-economic characteristics used to summarize data in various statistical reports compiled at the State Education Department): You are correct that each local board of education is charged with maintaining schools that satisfy the “educational interests of the state.” Section 10-218 of the Connecticut General Statutes lists local boards’ duties with regard to this requirement and Sections 10-4a and 10-4b assign responsibilities to the State Board to ensure that this is carried out. Because school boards are financially dependent on their respective towns to appropriate school budgets, towns are ultimately a party to any claim that insufficient funds have been provided for the board to execute its duties under 10-218. The former Minimum Expenditure Requirement (MER) and current Minimum Budget Requirement (MBR) have been the most commonly used standard by the state to determine that a local board has been provided sufficient resources to satisfy the “educational interests of the state”. So long as the minimum funding is provided, a town has met its obligation.

It is conceivable, but quite rare, for a complaint of a 10-4a violation to be brought before the State Board where the minimum funding requirement has been met, but a claim is made that the minimum is insufficient to provide all mandated services to the level required by law—such as minimum hours or days of school, special education, and so on.

So far “06106” has been me sounding off on a variety of issues relating to school funding in one way or another. Tax caps, Education Cost Sharing (ECS), Minimum Budget Requirements (MBR), economic climate, local budget news—you get the picture. If you scan the right margin or scroll down—you’ll see the postings to date.

And now the time has come to hear from you. Rather than posting an endless stream of guesses on my part as to what’s on your mind, I need a little help before moving on from here. In keeping with this being an education site, I have an assignment for you. An easy one—and hopefully, worth a couple minutes of your time.

All you have to do is complete one or more of the following phrases and post it as comment on “06106”. By doing so you could kick start a discussion in an area that is most interesting to you and perhaps to others as well.

Here goes:

• My biggest concern about education funding in Connecticut in the year(s) ahead is…?
• The thing about the ECS grant that is most troublesome or the most difficult to fathom is…?
• I think education funding in my town is most likely to be negatively impacted by_____________because…?
• For 2008-09 cost increases that are beyond the control of School Boards are most likely to occur in the area of…?
• A topic not mentioned yet, or in any detail, on “06106” that I would like to discuss is_________because…?

Of course any other comment, suggestion, criticism or observation you would like to make either by posting or emailing me directly is most welcome. Thanks.

More and more school boards across the state have begun forwarding on their 2008-09 budget requests to their respective town authorities in recent weeks.  Final town approval is still a couple months way—more in some cases—but this is a good time to take a look at what’s happening so far.

Looking at a sample of just under half of all school districts, I see that superintendents submitted initial requests with increases averaging just over 6.5%.  There have been several in the 3-4% range, and a similar number at 8+%.  Most, however, ranged from 5 to 7%, in line with or slightly lower that last year’s proposals.  Maybe this suggests a little foreknowledge of what to expect this year, maybe not.  The difference is not marked enough to conclude that has been the case. 

What has been a clear message in nearly all presentations is that fixed costs in salary, transportation and tuition contracts, employee benefits, and energy costs account for virtually all of the increases.  Typically 90-95% of a school’s budget is tied up in fixed costs and fixed cost increases and this year appears to be no different.  Staffing to implement a state mandate for offenders to serve suspensions in school heads a very short list of new spending items in many of the budgets. 

School boards may add, cut or adopt a superintendent’s plan as submitted before passing it on to the town.  So far board adopted budgets are averaging about 6% above 2007-08 spending, an indication that most have reduced the initial request—though not dramatically.  In a handful of cases, the board has added a specific item or program, offsetting any reductions and increasing the overall bottom.  Boards approving budgets largely intact is pretty much what you would expect, particularly since superintendents generally enter the process knowing what their boards want.  It would be pointless for a superintendent to wander too far in crafting a proposed spending plan.

Except in a few cases the town responses to board requests will come in the weeks ahead as part of an overall municipal spending plan.  A couple of interesting things so far:

There have been some cases—Griswold, Guilford and Southington—where the town government side budget increase has come out at 8% or more versus a school request of 6-7%.  I bring that up only to point out that fixed costs in towns’ government operations, and the escalation in benefit and energy pricing, will be putting the same budget pressures on the municipal side as the school districts are facing.

Towns that have responded to board requests include New Milford, where the mayor has cut the board’s request by $1.75 million, from a 6.4% to a 3.3% increase—and directed the board to come up with the cuts to meet that figure.  While some board members spoke to the severe difficulty of achieving such reductions, at least one member expressed recognition that the current environment warrants the conversation.  I expect this to be a common theme this year, more so than most years. What do you think?