OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

EMERGENCY CERTIFICATION

SB-458

AN ACT CONCERNING EDUCATIONAL REFORM.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 13 $

FY 14 $

Education, Dept. ; State Technical High Schools; Public Health, Dept. ; UConn

GF - See Below

See Below

See Below

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 13 $

FY 14 $

Local and Regional School Districts

STATE MANDATE - See Below

See Below

See Below

Explanation

Summary:

The bill makes various changes to the education statutes that result in a significant cost to the State Department of Education (SDE). 1 Of the changes contained within the bill, $88. 2 million is included in HB 5557, the revised FY 13 budget, and $10. 0 million in contained within sSB 25, the revised FY 13 bond package, as favorably reported by the Finance, Revenue and Bonding Committee. Table 1A, below, summarizes the state costs included in the bill that are funded in HB 5557, and Table 1B summarizes the state costs supported in sSB 25. Additionally, the bill makes various changes to local and regional school districts that result in costs and savings. A section by section breakout of the bill appears below.

Table 1A: Summary of Costs Included in HB 5557 ($ in millions)

Section

Item

Amount

1

School Readiness Slots

6. 8

4-7 and 88-97

K-3 Reading Assessment

2. 7

8

Family Resource Centers

1. 9

8

School Based Health Clinics (Department of Public Health)

1. 3

11

Technical Assistance/Regional Cooperation

0. 1

19-22

Commissioner's Network

7. 5

29-32

State Charter Schools

8. 1

52

Talent Development and Evaluation2

3. 5

53

Neag School at UConn

0. 2

59-61

ECS Increase

50. 0

63

Non-Sheff Magnet Schools

2. 5

63

Edison Magnet School

2. 2

64

Vocational Agriculture Centers

1. 4

 

Total

88. 2

Table 1B: Summary of Costs Included in sSB 25 ($ in millions)

Section

Item

Amount

3

Early Childhood Data System

6. 0

15-16

Chart of Accounts

4. 0

 

Total

10. 0

Section 1 requires the education commissioner to create 1,000 new school readiness slots. The state provides $8,346 in grant funding, per full year slot, for a total of $8. 3 million. Of the total 1,000 new slots, 500 must be located in the 10 educational reform districts, 250 must be located in current or former priority school districts that are not educational reform districts, and 250 must be located in competitive districts. HB 5557, the revised FY 13 budget bill, appropriates $6. 8 million for this purpose; $5. 8 million in the priority school district account and $1. 0 million in the Early Childhood Program account3.

Section 2 requires the Connecticut Health and Educational Facilities Authority (CHEFA) to update its 2008 study of space and facilities needed to provide universal early childhood education. CHEFA may use up to $80,000 in unused funding from the school readiness slots to update their report. The report is contingent upon the funds being available to CHEFA.

Section 3 requires SDE, rather than the early childhood system, to develop a quality rating and improvement system. sSB 25, the revised FY 13 bond package, as favorably reported by the Finance, Revenue and Bonding Committee, included $6. 0 million for this purpose, $3. 0 million for a vendor to design and rollout a federated data system, $2. 0 million to redesign the data currently collected by various state agencies, and $1. 0 million for implementation, including training for parents.

Sections 4-7 and 88-97 expand a K-3 reading assessment framework. The sections include several initiatives including:

● Continuing the existing pilot study for promoting best practices in early literacy,

● Developing new statewide reading assessments,

● Requiring various K-3 teachers to take a practice version of the reading instruction examination,

● Creating a program of professional development focusing on scientifically based reading research and instruction,

● Creating an intensive reading instruction program and an intensive reading instruction strategy,

● Requiring one external literacy coach and four external reading interventionists to be located in each of the five selected schools,

● Developing a coordinated state-wide reading plan for students in grades K-3,

● Requiring various teachers to achieve a satisfactory score on a reading instruction examination,

● Establishing an incentive program for schools that improve their reading scores.

HB 5557, the revised budget includes $2. 7 million in funding for the K-3 framework. $440,000 will be used to continue the existing pilot program; $1. 77 million will be used to fund the twenty-five new positions in the five selected schools (20 reading interventionists and 5 literacy coaches), and the cost of the new reading assessments for the students in the five selected schools, and $500,000 for SDE to provide support for the expanded K-3 framework.

Section 8 requires the commissioner to establish, in alliance districts, at least 10 new family resource centers and at least 20 new or expanded school based health clinics (SBHC). Each additional family resource center is anticipated to cost an additional $97,000 annually, and each SBHC is anticipated to cost an additional $123,803 annually. HB 5557, the revised FY 13 budget bill, appropriates $1. 94 million in SDE for new family resource centers. The budget bill also includes $1. 3 million in the Department of Public Health for competitive grants in the alliance districts to support the establishment of up to two SBHCs in each of these districts for half the school year in FY 13.

Section 9 requires public schools to include twenty minutes of physical exercise in each regular school day. This is not anticipated to result in a fiscal impact.

Section 10 establishes a municipal aid for new educators grant program, which would begin in FY 14. The program is estimated to cost approximately $2. 0 annually starting in FY 14, as it will provide grants of up to $200,000, to each of the ten educational reform districts.

Section 11 establishes a program to provide grants to support school districts in developing plans to implement significant cost savings, while maintaining or improving educational quality. The grants must be used for technical assistance or regional cooperation. HB 5557, the revised FY 13 budget bill, appropriates $100,000 for this purpose.

Open Choice (Section 12):

Section 12 increases the out-of-district student grant for the Open Choice program. Districts with more than 4,000 students that have increased their Open Choice enrollment by at least 50% on October 1, 2012, will qualify for a state grant of $6,000 per out-of-district student. It is anticipated that only Hartford would qualify for any additional funding in FY 13 and the additional funding for the seats would be covered in the original FY 13 Open Choice appropriation of $22. 1 million.

Section 13 allows SDE to publicly recognize exemplary schools and promote their best practices; this is not anticipated to result in an additional cost.

Section 14 requires local and regional boards of education to post information about school choice programs on its website. This is not anticipated to result in a cost.

Sections 15 and 16 require SDE to develop and implement a uniform system of accounting for school expenditures. sSB 25, the revised FY 13 bond package, as favorably reported by the Finance, Revenue and Bonding Committee, included $4. 0 million for this purpose. 4 It is not anticipated that SDE will require any additional operating funds for this purpose.

Additionally, it requires, beginning in FY 15, each board of education, regional education service center, and state charter school to implement the common chart of accounts and to submit annual financial reports. This is anticipated to result in a significant cost to local and regional boards of education. The cost of implementing the common chart of accounts will vary greatly by district, depending on the current financial systems being used within the district, and the extent of financial and accounting resources that the town has available.

Section 17 requires SDE to study issues related to districts with fewer than 1,000 students. This is not anticipated to result in a fiscal impact as the agency currently has staff members with the expertise necessary to perform the study.

Section 18 makes a number of changes to low performing schools, including:

● Proposed changes to the school accountability law and the creation of a school performance index (SPI), which does not result in a fiscal impact.

● A transition plan to switch from the current accountability plan to the new statewide management and support plan, which does not result in a fiscal impact.

● Imposing certain requirements on category three schools, which could result in an additional significant cost to local and regional boards of education that have category three schools.

● Imposing certain requirements on category four and five schools, which could result in an additional significant cost to local and regional boards of education that have category four and five schools.

● Proposed changes to reconstituted school boards, which does not result in a fiscal impact.

Currently, SDE uses approximately $4. 0 million of the federal Title I, school improvement, Part A funding for schools that are identified as in need of improvement. It is anticipated these funds will be used to support the initiatives described above for category 3, 4 and 5 schools. Additionally, $1. 8 million of School Accountability funds will also be used for this purpose. Going forward, SDE will require that certain schools set aside up to 20% of their Title I funds to target areas of need.

Additionally, Section 18 makes various changes to reconstituted boards of education. The changes involve notice to local officials regarding the electoral process when a reconstitution starts and when it concludes. The changes could result in an additional election being held, there is a cost to municipalities associated with holding a school board election separately from regular elections. Costs to a large city are estimated to be $90,000.

Commissioner's Network (Sections 19-22):

On or before July 1, 2014, the commissioner must select up to 25 schools that have been classified as a category four or a category five school to participate in the network. Once a school is selected, the following steps must occur:

● The local or regional school board must establish a turnaround committee,

● SDE must conduct an operations and instructional audit of each school selected to participate in the commissioner's network,

● The turnaround committee must develop a turnaround plan for such school after the operations and instructional audit is completed,

HB 5557, the revised budget, appropriates $7. 5 million for the purposes of the Commissioner's Network. It is anticipated that each school selected for the Commissioner's Network will result in a cost of approximately $2. 0. It is anticipated that SDE has the capacity to include 2-3 schools in the Commissioner's Network in FY 13. This will result in a cost of up to $6. 0 million. The additional $1. 5 million contained in HB 5557 will be used for start-up costs by SDE.

Sections 23-28 make technical and clarifying changes that are not anticipated to result in a fiscal impact.

Charter School Funding (Sections 29-32):

Sections 29-31 specify that any Charter School funding transferred to the Education Cost-Sharing (ECS) account be distributed to municipalities. Statutory grants to distressed municipalities under the ECS account are currently exempt from the spending cap, while Charter School funding is currently not exempt from the spending cap. Thus, the bill makes the portion of Charter School distributions to distressed municipalities from ECS an exempt grant for spending cap purposes. This will result in the FY 13 budget being further under the spending cap than would have occurred in the absence of this provision.

As an example, based on the 2011 Charter School grant distribution and total appropriation of $52. 8 million, this section would result in approximately $43. 4 million in spending cap-exempt appropriations.

Local Charters:

The bill establishes minimum per pupil support for local charter schools. The minimum is the per pupil cost of the preceding year. Under current law the per pupil support is specified within the school's charter. This potentially impacts the distribution of funds within the same district, but does not alter the total district expenditure. Currently, there are no local charter schools in operation.

The bill allows the State Board of Education (SBE), beginning in FY 14 and within available appropriations, to approve operating grants of up to $3,000 per student for eligible local charters. Additionally, the bill allows SBE to award grants of up to $500,000, beginning in FY 14, for startup costs for an eligible local charter. However, based on HB 5557, the revised FY 13 budget bill, there is no funding within the charter school appropriation to support the addition of new local charters. If additional local charters are approved and SDE implemented the bill's provisions, they would incur additional costs. A new local charter with 100 students would result in an additional cost to SDE of $300,000 per year, plus any start-up grants that the school would qualify for.

State Charters:

The bill increases the state's annual per pupil grant to state charter schools, from $9,400 to $10,500, in FY 13; to $11,000 in FY 14; and to $11,500 in FY 15. This results in an additional cost to SDE of approximately $7. 15 million, in FY 13. Table 2, below, provides detailed information on each state charter school, projected enrollment for the 2012-2012 school year, and the total per pupil grant increase per school.

Table 2: Charter School Enrollment and Increase per School

School

Projected Enrollment 2012-2013

Projected Increase ($)

Achievement First (Bridgeport)

674

741,400

Achievement First (Hartford)

801

881,100

Amistad Academy

931

1,024,100

Bridge Academy

271

298,100

Common Ground High School

164

180,400

Elm City College Preparatory School

602

662,200

Explorations Charter School

85

93,500

Highville Charter School

333

366,300

Integrated Day Charter School

330

363,000

ISAAC

191

210,100

Jumoke Academy

582

640,200

New Beginnings Family Academy

400

440,000

Odyssey Community School

335

368,500

Park City Prep

250

275,000

Side by Side Community School

236

259,600

Stamford Academy

143

157,300

Trailblazers Academy

171

188,100

Total

6,499

7,148,900

HB 5557, the revised FY 13 budget bill, appropriates $67. 9 million for charter schools, an increase of $8. 1 million from the original FY 13 appropriation. 5 Assuming enrollment of 6,499 students, the increases in FY 14 and FY 15 are anticipated to cost $3. 2 million each.

The bill requires that state and local charter school payments shall be made to the town where each school is located, in addition to the town's Education Cost Sharing (ECS) payment, and to continue on the current grant payment schedule.

Section 32 makes various changes to the state and local charter school approval process. The bill limits the approval of new schools, which could result in a savings to municipalities and the state as current law does not limit charter school locations.

Section 33 requires SDE to study “opt-out lotteries”. This is not anticipated to result in a cost, as the department has existing staff with expertise in this area.

Section 34 establishes “alliance districts” and allows the education commissioner to conditionally hold back ECS grant increases for these towns and establishes conditions for releasing the funds. Of the $50. 0 million in new ECS funding, $39. 5 million is designated to the 30 alliance districts. The ability of the commissioner to retain the increased funds could result in a potential revenue loss to municipalities. Any funds that are not allotted to the districts will not lapse, but will be carried forward and remain available to the district for the following year.

Section 35 requires teacher preparation programs, beginning in FY 16, to require students to have clinical, field, or student teaching experiences in a classroom in each of four semesters of the program, which is not anticipated to result in a fiscal impact.

Sections 36-39 make a number of changes to Connecticut's teacher and school administrator certification system, including:

Requiring the applicant for a professional certificate to hold a masters degree,

Eliminating the 90 continuing education units (CEUs) in a 5-year period required for certificate renewal. The bill instead requires all certified employees to “participate” in professional development programs,

Changes to the current program design for professional development,

Eliminate various professional development requirements for specific certificate holders.

There is no anticipated fiscal impact to SDE for these changes. There is a minimal fiscal impact for local and regional boards of education to redesign their CEU programs. Current law requires school districts to make available for continuing education credit at least 18 hours of professional development for certified employees at no cost. The bill does not alter that requirement.

The bill establishes a new distinguished educator designation. The SBE must renew the designation every 5 years. The bill establishes a fee of $200 for a distinguished educator designation and $50 for a duplicate copy of the designation. The commissioner may waive this due to extenuating circumstances. It is anticipated that this will result in a revenue gain to SDE, beginning no sooner than FY 17. The amount is unknown although is expected to be less than $200,000.

Sections 40-50 make technical changes to conform to the certification changes, and are not anticipated to result in a fiscal impact.

Section 51 expands the required components of the school administrator evaluation program and the model teacher evaluation program. This is not anticipated to result in an additional cost.

Section 52 establishes a teacher evaluation and support pilot program, to be administered in at least eight, but no more than ten schools. It is anticipated that this would result in a cost of up to $2. 5 million for SDE. The cost includes piloting the evaluation system as well as: in-person courses, online materials, coach support and a qualification assessment, practice materials, and suggested district activities. 6 HB 5557, the revised FY 13 budget bill, appropriated $3. 5 million for talent development, of which, $2. 5 million is designated for the evaluation pilot. Additionally, Section 35 of HB 5557 carries forward $4. 0 million from FY 12 into FY 13 for talent development.

Section 53 requires UConn's Neag School of Education to study the implementation of teacher and administrator evaluation and support programs adopted by local and regional boards of education. It is anticipated it will cost UConn's Neag School $200,000 to perform this study, including: salaries and fringes for two postdoctoral fellows, travel expenses and transcription of interviews. Funding of $200,000 in included in HB 5557, the revised budget, for this purpose.

Section 54 requires school boards to provide training, before the implementation of the evaluation pilot, but not later than July 1, 2014, for all evaluators and orientation to all teachers they employ, regarding evaluation and support. This is anticipated to result in cost to local and regional boards to education associated with providing the additional training. It is anticipated that local districts would incur costs associated with supplies, staffing requirements, and instructional materials. It is anticipated that the cost would be less than $20,000 per district.

Section 55 requires SDE, beginning in FY 15, to audit at least ten district evaluation programs, annually. This is anticipated to result in an annual cost of less than $50,000 to SDE, starting in FY 15.

Section 56 requires each board of education to provide information to its employees, on its evaluation program; this is not anticipated to result in a fiscal impact.

Teacher Tenure and Termination (Sections 57-58):

Section 57 requires school superintendents to incorporate evaluations into decisions about granting tenure and gives local and regional boards of education additional grounds to terminate a teacher for cause. Additionally, Section 57 expands the grounds for teacher termination and makes changes to streamline the teacher termination process and timeline. This change is anticipated to result in an additional cost to municipalities as well as the technical high school system, since additional hearings could be held throughout the year. It is anticipated that the average cost of completing the dismissal process with a tenured teacher is approximately $100,000. 7

Section 58 allows local and regional boards of education additional flexibility to appoint school superintendents who are not state certified; this does not result in a fiscal impact.

Education Cost Sharing (Sections 59-61):

Sections 59-61 increase the FY 13 Education Cost Sharing (ECS) grant by $50. 0 million. Of the 169 towns, 33 will not receive an ECS increase for FY 13. HB 5557, the revised FY 13 budget, appropriates $50. 0 million for this purpose.

Minimum Budget Requirement (Section 62):

Section 62 establishes the minimum budget requirement (MBR) for FY 13, which could result in a potential revenue loss to various municipalities and potential revenue gain to the state should a town not meet its MBR.

The bill allows, for both FY 12 and FY 13, a district with no high school and that is paying for fewer students to attend high school outside the district, to reduce its budgeted appropriation for education by the full amount of its lowered tuition payments. This is anticipated to result in a savings to the various municipalities that would qualify under the provisions.

Additionally, Section 62 allows for an option to permit towns to reduce their MBR. In FY 12, approximately 105 districts were able to reduce their MBRs collectively by $11. 2 million (in aggregate). Adding an additional option for reduction (to reflect half of any new savings from regional collaboration or cooperative arrangements or increased efficiencies, up to . 5% of its FY 12 budgeted appropriation) could result in potential savings to various local and regional boards of education.

Lastly, Section 62 states that only one of the reduction options may be used by any district, to meet their MBR requirement. This could result in a potential revenue loss to various municipalities and potential revenue gain to the state, as more municipalities may be unable to meet their MBR. Currently, SDE has allowed towns to make multiple reductions.

Magnet Schools (Section 63):

Section 63 increases the per pupil grant amounts for various non-Sheff magnet schools. Table 3 below provides a summary of the increases.

Table 3: Non-Sheff Magnet Grants

Type of Interdistrict Magnet

Current Law ($)

Bill ($)

Host

6,730

7,085

RESC Operated

7,620

7,900

RESC Operated (with 55% or more of its students from a dominant town)

Each student outside the dominant town= 6,730; each student from within the dominant town= 3,000

Each student outside the dominant town= 7,085; each student from within the dominant town= 3,000

HB 5557, the revised FY 13 budget bill, appropriates $2. 5 million for this purpose.

Section 63 also increases the per pupil grants for the Edison magnet school, located in Meriden. The bill increases the grant to $8,180 for all students attending the school. HB 5557, the revised FY 13 budget bill, appropriates $2. 2 million for this purpose.

Vocational Agriculture Centers (Section 64):

Section 64 increases the annual state base entitlement grant for each student attending a regional agricultural science center, from $1,355 to $1,750. Additionally, Section 64 prohibits local and regional boards of education operating vocational agriculture centers from using any increase in state funding to supplant local education funding. This precludes those municipalities from saving any potential funds that the state increase may have offset. HB 5557, the revised FY 13 budget bill, appropriates $1. 4 million to increase the per pupil base entitlement from $1,355 to $1,750.

Sections 65 and 66 phase out summer school and extended day grants for former priority school districts, beginning in FY 14, and is not anticipated to result in a fiscal impact.

Section 67 implements the transfer of Institutional Student Aid ($882,000) from the Department of Mental Health and Addiction Services to SDE. HB 5557, the revised FY 13 budget bill, includes this transfer.

Section 68 extends, through FY 12, the Big Picture Magnet School's exemption from statutory student diversity requirements for interdistrict magnet schools. This exemption allows the school to continue to receive a state magnet school operating grant in FY 12. There are currently 105 students attending the school, which receives a state magnet grant of $542,530. This cost is included in the original FY 13 appropriation of $235. 4 million, no additional funding is required.

Technical High School System (Sections 69-87):

Sections 69-87 make various changes to the technical high school system, which does not result in a fiscal impact.

The Out Years

There are several provisions contained within the bill that are not effective until after FY 13. The following provisions are not effective until FY 14, or later, and impact municipalities:

● Chart of Accounts (effective FY 15) is anticipated to result in a significant cost to local and regional boards of education. The cost of implementing the common chart of accounts will vary greatly by district, depending on the current financial systems being used within the district, and the extent of financial and accounting resources that the town has available.

● Beginning in FY 14 it requires districts to change and implement various policies relating to teacher certification and professional development. There will be costs to local and regional boards of education, incurred in the outyears, associated with redesigning their CEU program into a professional development program, and offering the program to groups of teachers who otherwise would not have had to take professional development credits.

The following provisions are not effective until FY 14, or later, and impact the state:

● Local Charters (effective FY 14) the state can make per pupil charter school grants to students attending local charter schools. A new local charter with 100 students would result in an additional cost to SDE of $300,000 per year, plus any start-up grants that the school would qualify for.

● State Charters (effective FY 14 and FY 15) increases the state charter school, per pupil, reimbursement amount by $500 in each FY 14 and FY 15. Assuming the charter school enrollment level of 6,500, this is anticipated to result in an additional cost of $3. 25 million in each year.

● SDE Audits of Evaluation Programs (effective FY 15) requires SDE to audit ten districts annually, and is anticipated to result in a cost of less than $50,000.

● Municipal Aid for New Educators Grant program (effective FY 14) is estimated to cost approximately $2. 0 million annually starting in FY 14, as it will provide grants of up to $200,000, to each of the ten educational reform districts.

The annualized ongoing fiscal impact identified above, for the sections effective from passage, or in FY 13, would continue into the future subject to inflation, number of grant recipients, expansion of pilot programs, available federal funding, and level of appropriated funding.

Sources: State Department of Education; State of Rhode Island (chart of accounts model); Connecticut Association of Boards of Education; State of Illinois (teacher evaluation).

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

1 The bill also includes one cost component to the Department of Public Health, which is included in Table 1, and one cost component to UCONN, which is included in Table 1.

2 In addition, $4. 0 million is carried forward from FY 12 into FY 13 for Talent Development included in HB 5557, the revised budget.

3 It is assumed not all 1,000 new slots would come on-line effective July 1, 2012, as the budget reflects reduced funding to account for a lag in the filling of the new slots.

4 Cost estimates are based on a similar chart of accounts model based in Rhode Island.

5 When the original biennial budget was passed, the charter school appropriation was reduced by $800,000 to cover the costs of the Special Master in the Windham District, therefore, although the new costs for charter schools total slightly over $7. 1 million, $8. 1 million is required to restore the original appropriation and to fund the enrollment total of 6,499.

6 Cost estimates are based on the Illinois model of a similar evaluation system.

7 This figure is based on fiscal estimates collected from the Connecticut Association of Boards of Education.