OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

sSB-299

AN ACT CONCERNING MINOR REVISIONS TO THE EDUCATION STATUTES.

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

The bill makes various revisions to the education statutes with the associated fiscal impact identified below.

Section 1 will result in an increase in General Fund debt service cost related to an increase in General Obligation (GO) bond authorizations for school construction grants-in-aid because it permits private or endowed academies to apply for funding; however the magnitude of the impact cannot be determined because there are no pending applications from these schools. Prior to the enactment of PA 11-51, Woodstock Academy, Norwich Free Academy, and Gilbert Academy could apply for funding but the public act eliminated their eligibility. 1

Section 2 is conforming and does not result in a fiscal impact.

Section 3 caps the enhancement grant for Youth Service Bureaus (YSB) at the appropriated amount and requires the grant for each YSB to be proportionately reduced if the appropriation level is insufficient. This could result in a potential revenue loss for municipalities.

sHB 5014, the revised FY 13 budget bill, as favorably reported by the Appropriations Committee, appropriated $42,000 in the YSB base grant for three new YSBs located in Voluntown, Columbia, and Watertown. However, the enhancement grant was not increased, so there is likelihood that the enhancement grants will be proportionately reduced. On average, the enhancement grant for each YSB is between $3,300 and $10,000 depending on the population of the town or group of towns the YSB serves.

Section 4 has no fiscal impact because the Department of Construction Services is currently responsible for collecting data on school facilities and producing the reports.

Sections 5 and 6 require the State Department of Education (SDE) to adjust for any overpayment of interdistrict magnet school per-student operating grants in the May 1st payment for the following year. This could result in either a revenue loss or a revenue gain for various municipalities. It is anticipated that the magnitude of the impact will be minimal.

Sections 7 and 8 are conforming and have no fiscal impact.

Section 9 makes various membership changes to the Special Education Advisory Council, which has no fiscal impact.

Section 10, which delays the deadline for SDE's biennial after-school grant program report, is not anticipated to result in a fiscal impact.

Section 11 expands eligibility for competitive grants for a pilot program to help schools establish in-classroom breakfast programs, to up to ten eligible schools. Currently, three schools are participating in the pilot program. If SDE expands the eligibility to include ten schools, the annual appropriation of $50,000 will be spread over ten rather than three schools, thus potentially reducing the funding to the original three schools. This could result in a minimal revenue loss to one of three municipalities currently operating the pilot. 2

Section 12 requires SDE to administer an Even Start program. sHB 5014, the revised FY 13 budget bill, as favorably reported by the Appropriations Committee, appropriated $500,000 for this purpose.

Section 13 makes various membership changes to the Head Start Advisory Committee, and is not anticipated to result in a fiscal impact.

Sections 14 and 15 make conforming changes that are not anticipated to result in a fiscal impact.

Sections 16 and 17 will result in General Fund debt service savings related to a decrease in General Obligation (GO) bond authorizations for school construction grants-in-aid because the sections reduce the reimbursement rate for vocational agriculture equipment and regional special education facility projects. The annual reduction in grants-in-aid for vocational agriculture equipment is estimated to be less than $100,000 (see Further Explanation below). The impact on funding for regional special education facility projects cannot be determined at this time because there is currently a moratorium on the expansion of such facilities that is expected to continue into the foreseeable future.

Further Explanation

The table below shows: (1) the state's actual expenditures at the 95% reimbursement rate for vocational agriculture equipment between FY 08 and FY 11 and (2) a savings of about $86,000 if the rate had been 80%. The General Fund debt service cost for the issuance of $100,000 in General Obligation (GO) bonds over 20 years at a 5% interest rate is $152,500 (comprised of $52,500 in interest and $100,000 in principal). There are 19 regional vocational agriculture programs currently operating.

FY 08 to FY 11 State Reimbursements for Vo-Ag Equipment

Actual Cost at 95% Rate and Estimated Savings at 80% Rate

     

State Reimbursement Rate

 

Fiscal Year

Number of Projects

Total Cost of Projects $

Actual rate: 95% $

SB 299 rate: 80% $

Savings at 80% rate $

2011

6

1,266,257

1,202,944

1,013,006

(189,939)

2010

2

782,562

743,434

626,050

(117,384)

2009

0

-

-

-

-

2008

1

246,725

234,389

197,380

(37,009)

 

Estimated Average Annual Saving at 80%

(86,083)

Sections 18-20 allow the Hartford school district to operate the Great Path Magnet School while maintaining the current funding structure, as operated by the Capitol Region Education Council (CREC). The bill provides Hartford with the same per pupil operating grant ($10,433) as CREC and the ability to charge tuition to sending towns.

This results in a foregone savings to the state of approximately $232,318 and a foregone savings to various municipalities who are currently paying tuition to Great Path (of approximately $4,000 per student). If the language contained in Sections 18-20 were not included and Hartford were still to take over Great Path, the state would save, and Hartford would correspondingly lose $232,318, plus the revenue that sending towns pay for tuition dollars.

Section 21, which requires Regional Education Service Centers (RESCs) to maintain fingerprints for up to four years, is not anticipated to result in a fiscal impact.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to the rate of inflation. The General Fund debt service fiscal impact identified above would continue into the future for the term of issuance of the bonds.

1 The estimated FY 13 reimbursement rate for the endowed academies ranges from 62% to 76%.

2 West Hartford, Winchester and Vernon are the three municipalities that currently operate this pilot program.