SB 7 — AN ACT CONCERNING EDUCATIONAL EQUITY.

Estimates use FY 25 data, except for ECS which uses FY 26 data.

The BOE magnets and Vo Ag estimates use the ECS data for sending towns from FY 26.

Estimates include the impact of Sheff magnet seat increases (for RESC and BOE magnets) as anticipated by SDE in October 2025.

The grant increases are equivalent to the net gains to towns and operators as this bill does not change tuition paid by sending towns for certain choice school programs.

1 Exact impacts will vary among operators due to the grant structures and annual data updates.

The bill hasa netpositiveimpacttoalmostalloperatorsoftheaffectedprograms in FY 27.

ECS and choice grant changes.

The bill requires the ECS foundation amount, currently $11,525, to increase to $12,500 in FY 27 and then by increments of $1,000 annually through FY 30, and beginning in FY 31, increase in line with inflation (as calculated for the spending cap).

2 Additionally, the bill adds an ECS regional bonus for towns that do not operate a high school and instead send their students to another district and pay tuition (designated high schools).

In FY 27, 67 towns benefit from the ECS changes, and in FY 28, 161 towns benefit.

4 Because the ECS foundation amount is tied to multiple other grants, increasing the foundation results in a cost to SDE and a corresponding revenue gain to towns and choice school operators through:

(1) the ECS 1Sendingtowns pay tuition for all regional educational service center (RESC) magnets, 2ll vocational agriculture programs, and some Board of Education (BOE) magnets.

Pursuant to CGS Sec.

2-33a, the percentage increase in personal income or the percentage increase in inflation, whichever is greater.

The ECS formula currently incorporates a regional bonus for students attending regional school districts and endowed academies.

The bonus is $100 per student, multiplied by the number of grades.

The designated high school bonus is received by 18 towns.

Of those, three towns benefit in FY 27 and all 18 benefit in FY 28 and beyond.

The cost of the bonus, beyond the cost of the annual increases in the ECS foundation amount, is approximately $76,100 in FY 27 and $134,400 in FY 28.

The bonus's cost continues to rise beyond FY 28, reaching approximately $357,100 in FY 31.

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448 grant;

(2) magnet school grants;

(3) vocational agriculture (Vo Ag) grants;

and (4) charter school grants.

The special education and expansion development (SEED) grant is also tied to the ECS foundation amount.

However, as the grant is reduced proportionally within available appropriations, increasing the foundation does not change the grant distribution.

Numerous factors.

The bill's fiscal impact in FY 27 and annually thereafter is subject to changes in many factors, including:

(1) enrollment, including enrollment changes related to the Sheff settlement;

(2) student characteristics;

(3) the number of students sent from each town to any of the affected programs;

(4) new or closed schools or programs (beyond those within the Sheff settlement);

and (5) inflation.

The bill's grants to BOE magnets and Vo Ag operators depend in large part on the student characteristics of the towns sending out-of- district students to the programs and the ECS foundation amount, which vary from year to year under the bill.

While in a year the average change across towns is typically small, the change to the grant amount associated with students from any one town can be large (either lower or higher).

Any such changes will result in different grant totals than projected above (impacting the anticipated General Fund appropriations) and affect grants to the towns, districts, or RESCs 5 operating the programs.

In FY 26, used for this estimate, the grant amounts for these students ranged from $11,544 (students sent from New Canaan) to $15,932 (students sent from Bridgeport).

The median town grant amount for FY 26 is $12,567.

5In this fiscal note, the magnet schools run by RESCs, Goodwin University, and Great Path Academy on behalf of Manchester Community College are referred to as "RESC magnets" for simplicity.

6Vo Ag and BOE magnet operators generally are not receiving these amounts in FY 26, due to the partial phase-in permanently in place under current law (continued by the bill).

These amounts represent the full funding levels at the current foundation level.

Additionally, the grant structures in place ensure that every year, no Vo Ag or magnet operator receives less in total revenue (tuition plus grant) funding per student than in FY 24.

The hold harmless provision is not necessary for charter schools.

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448 ECS working group.

The bill establishes a working group to study the ECS formula and other state education funding, which has no fiscal impact as the working group has the necessary expertise to meet the requirements.

The bill additionally eliminates a defunct commission related to education funding.

The Out Years State Impact:

Agency Affected Fund-Effect FY 29 $ FY 30 $ FY 31 $ Education, Dept.

GF - Cost 492 million 710.8 863.6 million million Note:

GF=General Fund Municipal Impact:

Municipalities Effect FY 29 $ FY 30 $ FY 31 $ Various Revenue See Below See Below See Below Municipalities Gain Various Local Revenue See Below See Below See Below and Regional Gain School Districts The bill's projected annual cost to the General Fund (compared to current law) in the out years is $492 million in FY 29, $710.8 million in FY 30, and $863.6 million in FY 31.

Costs relative to current law will rise annually beyond FY 31 due to the inflation adjustment to the ECS foundation amount.

As discussed above, the fiscal impact of the bill depends on many factors and will vary, possibly markedly, from this estimate, and year to year.

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448 OLR Bill Analysis sSB 7 AN ACT CONCERNING EDUCATIONAL EQUITY.

SUMMARY This bill increases the education cost sharing (ECS) grant foundation amount from $11,525 to $15,500 over a four-year period, and then annually adjusts it in line with the state budget spending cap.

In doing so, it generally increases state education aid to towns, as well as state grants for the choice program (magnet schools and vocational agriculture programs) and charter schools.

The bill also extends ECS’s regional bonus to towns that do not have high schools and pay tuition to another district so their students can attend high school there.

The bonus equals $100 for each student attending a high school in another district, multiplied by the number of grades for which resident students attend high school in the district.

Under current law, this bonus applies to towns that are members of a regional school district or that pay tuition for its students to attend an endowed academy that is serving as the public high school.

Lastly, the bill creates a 16-member ECS working group to study the ECS formula and other state public education funding.

By January 1, 2027, the working group must report its findings to the Education Committee.

The group ends January 1, 2027, or when it submits its report, whichever is later.

The bill also repeals an obsolete statute on a defunct working group.

EFFECTIVEDATE:July 1,2026,except theworking groupprovisions are effective upon passage.

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448 ECS FOUNDATION INCREASE The ECS foundation amount is set by statute and is intended to represent the estimated cost of educating a general education student who does not have additional needs.

Generally, to determine a town’s ECS grant, the foundation amount is multiplied by (1) a town’s weighted student count (which equals the number of resident students, adjusted for student need)and(2)itsstate aidpercentage (whichreflects town wealth, based on property value and household income).

The bill increases the ECS foundation amount by about $1,000 per year over a four-year period (see table below) and then annually increases the amount in line with the state’s spending cap.

Specifically, starting in FY 31, the ECS foundation amount equals the prior year’s amount adjusted by the spending cap’s maximum allowable growth rate (the greater of the percentage increase in personal income or inflation, see BACKGROUND).

Table:

ECS Foundation Amount Under the Bill, FYs 27-30 Fiscal Year Foundation Amount Current $11,525 12,500 13,500 14,500 15,500 ECS WORKING GROUP The bill creates a 16-member working group to study the ECS formula and other state public education funding.

The group must, at a minimum, examine all components of the formula and other funding and recommend ways to make them more equitable and fiscally sound.

The working group consists of the Education Committee chairpersons and 14 members appointed by the legislative leaders (see table below).

The bill allows the appointing authorities to appoint legislators to the working group, if they meet the required criteria.

When making appointments, the legislative leaders must try to select individuals who are representative of the full geographic diversity of sSB7 / File No.

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448 the communities in the state.

Table:

Appointed Members Appointing Authority Number Criteria • One elected municipal official Senate President • One public school principal Pro Tempore Three • One Connecticut Association of School Business Officials representative • One elected municipal official House Speaker Three • One public school principal • One enrolled public school student • One American Federation of Teachers-Connecticut Senate Majority Two representative Leader • One member with expertise in student needs that require additional school investment House Majority Two • One Connecticut Education Association representative Leader • One State and School Finance Project representative Senate Minority • One elected municipal official Two • One Connecticut Association of Boards of Education Leader representative House Minority • One elected municipal official Two • One Connecticut Association of Public School Leader Superintendents representative Under the bill, members must be appointed to the group within 30 days after the bill takes effect, and vacancies must be filled by the appointing authority.

The Education Committee’s staff serve as the working group’s administrative staff.

The bill requires the House speaker and the Senate president pro tempore to select the working group’s chairpersons from its membership.

The chairpersons must schedule the group’s first meeting within 60 days after the bill takes effect.

BACKGROUND Spending Cap Allowable Growth Rate In the absence of emergency or extraordinary circumstances, the spending cap restricts the annual growth in general state budget sSB7 / File No.

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448 expenditures by the greater of the percentage increase in personal income or inflation.

The “increase in personal income” is the state’s compound annual growth rate in personal income over the preceding five calendar years, based on U.S.

Bureau of Economic Analysis data.

The “increase in inflation” is the increase in the consumer price index for all urban consumers during the preceding calendar year (for all items except food and energy), calculated on a December over December basis using U.S.

Bureau of Labor Statistics data (CGS § 2-33a(b)(1) & (2)).

Related Bill sHB 5002, favorably reported by the Education Committee, annually adjusts the ECS foundation amount starting in FY 27.

COMMITTEE ACTION Education Committee Joint Favorable Substitute Yea 45 Nay 0 (03/16/2026) sSB7 / File No.

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