Blog: Education

Jobs & the Economy, Taxes & Government Spending, Education, Legislation

2014 CT Legislative Session: The Good, The Bad, and The Ugly

  • May 14, 2014
  • by CPI Staff
2014 CT Legislative Session: The Good, The Bad, and The Ugly

The 2014 CT legislative session ended last week.  Here are some of the session's most important policy developments, including what was good, what was bad, and and what was just plain ugly (spoiler alert: it's the budget).  

 

The Good

New Early Childhood Education Funding

The legislative session included several expansions to state education funding, most notably new funding for early childhood education.  This is a positive development, though the state must do more to ensure that early childhood education funding is spent effectively.  For more on how government can most effectively fund early childhood education, see this CPI op-ed in Education Week and this CT Mirror op-ed by Hope Child Development Center Executive Director Georgia Goldburn.

Reforms to Judicial Pension Guidelines

The legislature made a small but positive change to the eligibility rules for judicial pensions, reducing the standard pension (two thirds of salary) by ten percent per year for judges who retire before serving ten years on the bench.  The change was inspired by judges confirmed to the bench this year who will receive pensions of around $100,000 per year after working as little as four years.  These judges’ pensions, currently the leading vote-getter for the CPI’s 2014 Golden Fleece Award, will not be impacted by the changed eligibility rules as those changes only apply to judges appointed after July 1. 

The Bad

One Step Closer To State-Run Retirement Program For Private Sector Workers

One of the least advisable proposals of the legislative session was an attempt to establish a state-run retirement plan for private sector workers and require any business without a retirement plan to set up direct-deposit and payroll-contribution systems for the state plan.  While this proposal did not pass in full, the legislature did pass a bill creating a new state board to design a mandatory state-run retirement plan and submit it to the legislature for final approval by April 2016.  See this CPI blog post for more on why this is a bad idea.

Tax Breaks For Select Companies While Overall Business Climate Suffers

Connecticut’s government this session continued its pattern of offering generous tax breaks to select companies, paid for with higher taxes on everyone else. 

Specifically, the legislature passed a bill providing UTC $400 million in tax breaks to support $500 million of facilities investments in the state. The tax breaks are tied to capital investment rather than job creation, so UTC could actually reduce the size of its Connecticut workforce and still receive up to 90 percent of the tax breaks. 

The problem with incentives like these is that they have to be paid for with higher taxes on everyone else, contributing to the poor business climate in Connecticut that leads companies like UTC to consider leaving in the first place.  For instance, $118M of spending in the current budget is paid for by a 20% corporate tax surcharge that the legislature could have repealed.  And the legislature failed to act on a proposal to repeal the state’s business entity tax, which raises only $40M per year in revenue yet is a major deterrent to small business creation in the state, forcing companies to pay a fee even if they are not yet turning a profit.  For CPI's award-winning analysis on when state incentives for business are a good idea – and when they are not – see this CPI policy paper and op-ed.

The Ugly

The Connecticut government began the legislative session debating what to do about a projected $500M surplus.  But when income tax revenue came in at much lower levels than the state had projected (something the CPI warned about in January), the legislature had to resort to more than $180 million in budget gimmicks to keep the budget “balanced” at all.  These gimmicks included:

  • $75M in projected new revenue from "enhanced" tax collection techniques, even though the state's largest 50 business tax delinquents owe only $9M in combined unpaid taxes;
  • Failing to budget for $52M of expenses related to an expected surge in worker retirements that Comptroller Lembo says will be needed (the Malloy administration says the workers won't retire even though they are eligible);
  • $20M in fictional spending reductions from yet to-be-identified efficiencies, rather than actual cuts;  
  • $35M in transfers from one-time money in dedicated use funds to pay for ongoing programs.

These new questionable budget moves come on top of $625 million of borrowing to cover operating expenses and $400 million of unsustainable, one-off revenues included in the budget when it was first passed last year.  Unsurprisingly, the legislature’s Office of Fiscal Analysis projects annual budget deficits of over $1 billion per year going forward.

Jobs & the Economy, Taxes & Government Spending, Education, Healthcare

Analysis on Tax, Healthcare, Education Bills From First Week of CT legislative session

  • Feb 11, 2014
Analysis on Tax, Healthcare, Education Bills From First Week of CT legislative session

The 2014 CT legislative session opened last week with a flurry of proposed bills from legislators.  Most bills proposed in the first weeks of the session include very little detail about what they will actually do – rather, they serve as placeholders that are referred to committees where they may be fleshed out in greater detail.   But a few bills did include specific proposals – here are a few of the most consequential for economic and education policy, accompanied by brief policy analysis:

H.B. 5012 and 5021, proposing to repeal the state’s Business Entity Tax 

Connecticut’s business entity tax imposes a $250 biannual fee on any company doing business in Connecticut.  The tax is a major deterrent to small business creation in the state, forcing companies to pay a fee even if they are not yet turning a profit.  The tax is not a major revenue source for Connecticut, bringing in about $40M per year of revenue.  That’s or less than a quarter of one percent of overall state tax revenue.  Repealing it is good policy.

H.B. 5003, proposing to repeal the state’s Earned-Income Tax Credit (EITC)

The Earned-Income Tax Credit (EITC) is a federal program that provides a tax-credit to low-income workers.  For any Connecticut taxpayer eligible for the federal credit, Connecticut provides a state tax credit equal to 27.5% of the federal credit.  The EITC has generally drawn bipartisan support as a way to provide work incentives and keep low-income families out of poverty.  There have been a number of good proposals to simplify the administration of the tax credit, but repealing it is not good policy. 

SB 5, 8, and 10, proposing new coverage mandates for health insurance plans

As of 2012, Connecticut already imposed 65 mandates on health insurance plans, the fourth most in the country and well above the national average of 43. Connecticut’s large number of coverage mandates is one reason it trails only Massachusetts and Alaska in per capita healthcare costs.  At a time when health insurance premiums are already facing upward pressures and the state is struggling to grow jobs, adding yet more mandates may not be the best idea. At the very least, the legislature should carefully study the costs of these particular mandates before passing them.

H.B. 5005, proposing to increase state aid to towns that pay for inter-district magnet schools

When students choose to attend a magnet school in another district, the state provides a grant to that district to help defray the cost of the students’ education.  However, that grant does not fully compensate the receiving district for those costs.  The best way to address this challenge is to adopt a student-based funding model in which students “carry” an allotted per-pupil funding level with them to whichever school they attend. The allotted amount per student should be based on a weighted student formula that allocates more state money for students whose education is more costly, such as those in extreme poverty, English Language Learners, and special education students.  HB 5005 should be amended to enact student-based funding in Connecticut, which would improve equity and accountability in state-funded public schools.

Here is a full list of bills introduced so far in the CT Senate and House.

Taxes & Government Spending, Education

Analyzing New Education Performance Index Results

  • Jan 07, 2014
Analyzing New Education Performance Index Results

The Connecticut Department of Education last month released a new performance index for each school and district in Connecticut.  The new index synthesize scores across subjects and grade levels on the Connecticut Mastery Test (CMT) and Connecticut Academic Performance Test (CAPT) to generate a single School Performance Index (SPI) and District Performance Index (DPI) for each test.

Most of the schools with the lowest SPIs are concentrated in the state’s 30 alliance districts – traditionally underperforming and generally low-income districts targeted by the state for improvement as part of the 2012 education reform bill.

Unfortunately, as the Connecticut Council on Education Reform reported last month, the district-level data shows most Alliance Districts failing to make year-over-year improvement in scores.  This mirrors the results of the 2013 National Association of Educational Progress (NAEP) results, which show Connecticut making little progress from 2011-2013 in low-income and minority student achievement.

While underperforming schools are concentrated in low-income districts, this is not because those districts spend less per student on public education.  As these charts show, alliance districts are spread fairly evenly across the distribution of district spending per students – eleven of the thirty alliance districts spend more per student than the state average of $14,961.  Additionally, there is little correlation between spending per student and District Performance Index scores more generally.

What It Means For You: Improving educational achievement in low-income districts will require more than simply spending more, the objective of an ongoing lawsuit against the state.  Rather, it will require spending money differently.

For instance, a recent CPI policy paper proposed improving equity and accountability in school financing by adopting a "money follows the child" funding system that allocates a certain amount of money for the education of each student and transfers that money to whatever public school the student attends. The allotted amount per student would be based on a weighted needs-based formula, which allocates more money for students whose education is more costly, such as those in poverty, English Language Learners, and special education students.  More information on this proposal and the CPI's education policy work is available here.

Education

2013 NAEP Scores Show Need for More Systemic Education Reform

  • Nov 12, 2013
  • by Ben Zimmer
2013 NAEP Scores Show Need for More Systemic Education Reform

The 2013 National Assessment of Educational Progress (NAEP) results released last week show little progress in educational achievement for Connecticut low-income and minority students, in spite of the state’s much-touted education reforms.  

As this CPI chart shows, fourth grade reading achievement was the only metric where low-income and minority students showed notable gains from 2011 to 2013.  In fourth grade math and eighth grade reading, achievement is largely unchanged from 2011.  And in eighth grade math low-income and minority student achievement has actually regressed in the last two years. 

While we shouldn’t read too much into one year of results, the NAEP scores support the position the CPI has articulated since Connecticut’s education reform bill was passed in 2012 – that while the bill includes several positive steps on the margins, it fails to enact the systemic changes necessary to close the state’s achievement gap, which remains the largest in the country. 

Most recently, the CPI policy paper Closing Connecticut’s Achievement Gap Through Public School Choice recommends ways to improve low-income and minority student achievement through greater and more effective use of public school choice.

About the Author: Ben Zimmer is the CPI's executive director

Jobs & the Economy, Taxes & Government Spending, Education, Crime & Public Safety

CT Government Weekly Rundown -- September 23

  • Sep 23, 2013
  • by Alexandra Forrester
CT Government Weekly Rundown -- September 23

August 2013 Jobs Data Shows CT Continuing to Lag USA in Job Growth
The Department of Labor this week released the August results of its monthly employment surveys of Connecticut employers and residents.  The employer survey showed the state’s “nonfarm payrolls” decreasing by 6,000.  However, this comes on the heals of an abnormally large gain of 11,500 that the survey reported for July.   Both the large gain in July and large loss in August reflect month-to-month volatility – the overall trend in the employment survey remains one of slow but steady growth.  The Department’s monthly survey of Connecticut households showed the number of Connecticut “residents employed” decreasing by 1,400, continuing a trend over the last few years.

The most useful way to understand jobs numbers is to not read too heavily into any one report, but rather to look at longer term year-over-year trends.  It is also useful to compare Connecticut’s job performance to the rest of the country, as that helps isolate state-specific job trends. 

From August 2012 to August 2013 Connecticut’s “nonfarm payrolls” grew by 15,400, or 0.94%.  During the same period, US nonfarm payrolls grew by 1.65%, nearly twice Connecticut’s rate.  From August 2012 to August 2013, the number of Connecticut “residents employed”  fell by 14,700, a 0.86% reduction.  During the same period, the number of US residents employed grew by 1.41%. 

What It Means For You: The Department of Labor’s two employment surveys paint slightly different pictures of the state’s job performance.  But even if you go exclusively by the employer survey – which paints the more favorable picture of the two – the state’s jobs performance remains worse than that of the US as a whole.


State Sued for Allegedly Skimping on Education FundingOn September 16, the Connecticut Supreme Court heard the state’s case to dismiss a nine-year-old suit accusing the government of shirking its state constitutional obligation to provide adequate education for all residents. The Connecticut Coalition for Justice in Education Funding began the suit in 2005—now the state is looking to dismiss the case in light of the recent education reforms. The CT attorney general argues that the 2012 education reforms and the 2013 changes to the Education Cost Sharing (ECS) formula satisfies the state’s constitutional requirements. Supporters of the suit disagree, stating that current funding for schools falls 763 million short of the ECS Formula.

A CPI paper on education reform released last week notes that the ECS program has been successful in eliminating overall inequality between poorer and wealthier districts  – the wealthiest twenty percent of districts in Connecticut now spend roughly the same per student as the poorest twenty percent of districts.  But in spite of the 2012 reforms and 2013 changes, the ECS program remains riddled with its own inequities and fails to incentivize the effective use of allocated funds.  The CPI paper argues Connecticut should replace ECS with a “money follows the child” student-based allocation model, weighted to the students’ needs.  In this model students “carry” their allotted per-pupil funding with them to whichever school they attend. The allotted amount per student should be based on a weighted student formula, which allocates more money for students whose education is more costly, such as those in extreme poverty, English Language Learners, and special education students. Several states and districts, including Rhode Island, San Francisco, and New York City have implemented per-pupil cost formulas that could be a model for Connecticut.

What it means for you: Spending more on education is never a bad thing, but the state also needs to change the structure of its education funding to make spending more effective.

State Announces Tax Amnesty Until November 15th
The state Department of Revenue Services announced on September 16th that it is offering a new tax amnesty program for the next 60 days. This program will allow businesses and residents to pay back-taxes with a 75 percent reduction in interest owed. The program is expected to bring in 35 million in revenue.

What it means for you: If you are one of the 80,000 taxpayers that owes the state money, now is a good time to pay. To encourage taxpayers to take advantage of this program, the state will increase the interest penalty it applies to delinquent taxes from 10 to 25 percent on any taxes still owed after the amnesty period ends.

State Grants $5 million to Improve School Security
Gov. Malloy announced on September 18th the first round of funding for increasing school security. The initiative, established in the state's recent gun control legislation, will provide $5 million in grants now and $15 million by the end of this calendar year.  The grants are awarded to municipalities, who must offer some amount of matching spending.

What it means for you: If your district is one of the 36 that successfully procured funding, you may see increased security measures within schools.  However, there are limitations on the uses of state funds. For instance, state funds cannot be used to hire armed guards, although municipalities can hire armed guards on their own if they wish.

About the Author: Alex Forrester is a policy analyst for the CPI