State budget news mixed for East Hartford

One would think that the dubious distinction of being labeled one of Connecticut's least affluent municipalities and a "priority school district" would help when it comes to the state municipal and school funding formulas.

For the last 5 years, East Hartford has managed to receive additional state dollars directed specifically for education improvements. So many here expected, tough budget year that it was, with a court ruling excoriating the manner in which local school districts are inequitably funded, and a speech in which Gov. Dannel Malloy agreed with that and promised to "re-imagine" the random, yet formulaic method in which Connecticut funds education, poor East Hartford stood to gain from sweeping budgetary reform.

That appeared to be true when the governor's budget increased Educational Cost Sharing (ECS) funding by $2,845,632 for the 2017-2018 fiscal year. Taking Special Education out of the ECS, and giving cities and towns “skin in the game” by making them pick up one-third of teacher’s pension costs reduces overall education aid to East Hartford. And a closer look reveals another major hit to East Hartford: The proposed state biennial budget strips away $4,447,536 East Hartford received last year in state reimbursement for not levying a tax on manufacturing equipment. Most of that is on the production floor at one of the state’s largest employers, Pratt & Whitney Aircraft here in town.

The net result: $1,829,452 less in state grants here. The likely result will add to the budget-making process here where spending was frozen a month before the town budget was adopted July 1.

Gov. Malloy's budget is subject to ongoing debate and final approval by the state legislature in June. One major change is the proposal that municipalities shoulder one-third of the state's teacher pension obligations. For East Hartford, that is a $5,716,884 annual tab.

Yet recognizing the financial burden of special education, something local leaders have complained about for many years, the governor's budget separates those out from the ECS funding formula. East Hartford would receive a direct Special Education grant of $7,133,197.

However it is uncertain if that Special Education grant goes directly to the Board of Education or the town's General Fund. That is a key question in towns such as East Hartford as educational funding grants and set-asides complicate the budget-making process - a situation that has persisted in the Malloy administration.

The 2017-2018 fiscal year baseline ECS funding for East Hartford decreases from $41,710,817 this year to $38,405,790 - a reduction of $3,305,027. When all state education-related grants are calculated, including Special Ed funding, East Hartford will receive $1,888,714 less than the current fiscal year.

On the plus side, East Hartford would receive $3,927,886 next year from the new Motor Vehicle reimbursement program. That is based on a uniform, statewide motor vehicle assessment mill rate of 32 - down from the current 37 mills - with the difference an increase of $1,324,797. That number is based on the town's current mill rate of 43.62. Under the new calculation, the property mill rate would be lower but motor vehicles would be assessed and taxed separately at 32 mills in every municipality, with the difference returned to the cities and towns. Taking that number out could allow the town to set a lower mill rate for real estate only - but that may not translate into lower overall taxes once motor vehicle assessments are assessed.

The second largest state budget grant to East Hartford is for state sales tax revenue sharing. In Malloy's budget, that will increase by $5,762,702 - from $1,274,192 to $7,036,894. The town will also receive LOCIP funding of $818,900 - LoCIP stands for Local Capital Improvement Program - new money for equipment purchases and the like. But it will lose the Town Road Aid funding of $584,370 East Hartford received this budget year.

East Hartford will get $291,227 in Pequot funds, about $3,000 less than last year as slot machine revenues at the two in-state Native American casinos continue to drop.

Although state law prohibits municipalities from reducing per-pupil school funding even as overall public school population declined in Connecticut by 6.1 percent last year, the declines were not uniform by district. In lower Fairfield county public school enrollments increased while it fell in other towns, such as Windsor, Meriden and East Hartford. East Hartford went from 7,158 students two years ago to 6,882 this year. Enrollment numbers are reported three times during the school year - in October, December and June. Gov. Malloy opened the door on changing the school enrollment methodology, ostensibly to help municipalities improve the accuracy of school enrollment numbers. But taking the count in June rather than October for local budget planning purposes could allow local budget makers to trim education spending based on timing the enrollment count, giving them an opening to maintain the per pupil spending but still cut overall school spending from the year prior.

Rough calculations were made immediately after the governor's address to the legislature Wednesday by the CTMirror website. Those indicated that the governor's budget will cut this year's state grants to the town by $2,871,252. But that reported cut is off by $1 million from East Hartford Town Hall estimates.

During the last few budget cycles, as East Hartford was labeled a Priority School District based on test scores, the town received extra state funding to establish specific areas of school improvement and instruction to boost school outcomes. That has met with success in schools such as Norris, East Hartford Middle School, Pitkin and the Willowbrook Early Childhood Education Center now based in the former Hockanum School. Baccalaureate programs have also been established at O'Connell and Sunset Ridge, and STEM education has intensified at O'Brien Elementary School. The result has begun to pay off with attendance and graduation rates up.

East Hartford is unique in that it sends a large number of students to local charter and magnet schools, and the cost of tuition and transportation has skyrocketed. As a result the town does not advertise or promote school choice programs which are offered in abundance both in East Hartford by Goodwin College, by CREC - the Capital Region Education Council - and even Hartford Public Schools with its Pathways to Technology Magnet high school located on the Goodwin College campus at 2 Pent Road. The town must provide transportation to those programs and several others, operating over 110 bus routes morning and afternoons.

In Malloy's address February 8 to the legislature, he said he and his budget czar, Ben Barnes, used the state's Equalized Net Grand List to arrive at a "more accurate means of measuring municipal health." The former mayor of Stamford also referred to a decision handed down by state superior court judge Thomas Moukawsher that school funding in Connecticut was "irrational and unfair." Malloy said he agreed with that assessment, and suggested his budget would change that. “I agree that we are not meeting our constitutional requirement of a fair and equitable public education system – one that guarantees every student the opportunity for success,” the governor said.

To understand what happened to the $4.45 million East Hartford has lost from the state's decision not to tax major local manufacturers requires an explanation of the tax break's history. It came when high-cost manufacturing states such as ours were losing large manufacturing concerns to other states which promised to not tax their equipment. Connecticut acted to stem the manufacturing exodus to southern states. The legislature enacted a special PILOT - Payment in Lieu of Taxes - that removed the local property tax from all manufacturing equipment. East Hartford received an annual percentage of the taxes it would have gotten from the manufacturing equipment - but at a lower rate through a special PILOT program called Manufacturing Machinery and Equipment, or MM&E. In 2013 Gov. Malloy and Ben Barnes replaced the MM&E with MRSA - a Municipal Revenue Sharing Account - after East Hartford's legislative delegation and the mayor loudly protested in Hartford. But the state, on its own, removed the MRSA program from the annual state budget and funded it through the State Bond Commission.

This year, as Connecticut's bonded debt stands at $19.6 billion, state leaders somewhat feel less obligated to dip into the State Bond Commission cookie jar as ballooning pension and state health care obligations have brought overall debt obligations above $71 billion, according to sites such as the Pew Charitable Trust.  

The Connecticut Coalition for Justice in Education Funding, the coalition that is suing the state for alleged under funding of schools, was "stunned" according to CT Mirror.

"Yet again, it appears that state budget politics under the guise of reform will determine proposed changes to the ECS formula and the level of state support for education,” said Herbert C. Rosenthal, president of the Connecticut Coalition for Justice in Education Funding.