February 2011

Problems with Connecticut's Education Cost Sharing Grant

The state's Education Cost Sharing (ECS) Grant uses a formula that was originally designed to provide equal educational opportunity by taking into consideration differences in both student need and towns' ability to pay for education. As originally envisioned, the ECS formula would provide Connecticut with a rational, transparent, and equitable method of making difficult funding determinations. Yet flaws in the funding formula mean that state aid is not always aligned with local need.

The ECS Grant is far from "fully funded" and towns receive widely varying proportions of their fully funded "target" amounts, from a low of 30 percent to a high of 159 percent. The ECS funding formula uses a measure of wealth that is distorted by outdated and misleading sources of data. It is partially based on a measure of town wealth that uses income data from Census 2000 (1999 income). Including dorm and prison residents in the population count also distorts the wealth measure and ECS funding. In addition, funding statutes do not allow flexibility in town budgeting in the face of decreasing enrollments statewide and they enable towns to shift local education funds to non-educational purposes.

Among its recommendations, this brief suggests that the state should restructure all education funding through a transparent, planned and research-based process, rather than simply patching the ECS formula. Dorm and prison populations should be excluded from both all state funding formulas and all state per capita income calculations. Per capita income data in all state funding formulas should be updated on a yearly basis using the most recently available data from state income tax returns.

Issue Areas:
Budget and Tax, Education