OLR Report 2012-R-0101 describes the Education Cost Sharing (ECS) formula including (1) the formula components and how they work and (2) a brief history of recent changes to it.
ECS aid is the major form of state education aid to Connecticut's towns. For FY 12, the current fiscal year, the state is distributing $1.89 billion in state ECS aid to towns (that equals 45.3% of all state education expenditures). The budget act (PA 11-6) passed last year overrode the statutory formula for calculating ECS grants and specified each town's ECS grant for FY 12 and FY 13. In doing so, it held funding at the current level, marking the fourth consecutive year that ECS funding was frozen.
The ECS formula is intended to equalize state education funding to towns by taking into account a town's wealth and ability to raise property taxes to pay for education. Poor towns receive more aid per student; affluent towns receive less aid per student. The components of the formula that drive this equalization will be discussed in more detail below.
The basic ECS formula multiplies the number of students in each school district (weighted for educational need) by the amount the state has determined a district should spend to provide an adequate education (the “foundation”) and by an aid percentage determined by the district's wealth. The result is the district's ECS grant. The law then imposes minimum or base aid for all towns and adds supplements for such things as students attending regional school districts.
The formula has rarely been fully funded in its 23-year history. Over the years there have been attempts to phase in full funding when state revenues were strong, but financial downturns and related budget issues have often led to interrupting the phase-in and freezing or reducing funding levels.
In addition to significantly revamping the formula in 1995 and 2007, the legislature has made some adjustment to it nearly every year since it was created. While its primary components remain intact, the cumulative effects of previous aid caps, minimum aid amounts, and out-of-date data elements continue to affect the funds' distribution.
ECS funding was frozen at the FY 09 level in FY 10 and FY 11. The current state budget calls for ECS funding to continue at the FY 09 level through FY 13.
For a summary of the formula's components and a table showing each town's ECS grant amounts for FY 12 and 13, see the full report.
