Taxing and Spending at the Same Time:
A New Role for School Districts?
This Friday, March 15, the Planning & Development Committee is holding a public hearing on a bill that would make almost every single school district in Connecticut an independent taxing district. In doing so, it would transfer to these “educational services taxing districts” certain fiscal powers currently held by municipalities.
I have serious concerns and questions about this bill, HB 7319, An Act Concerning the Fiscal Independence of School Districts, and would like to share them with you here. My greatest concern is the possibility that this legislation would greatly diminish the role that residents can now play in the oversight, determination, and allocation of funding of their local schools.
The bill would apply to all school districts – whether single-town or regional – with fewer than 15,000 students, which means that only five school districts would be exempted: Bridgeport, Hartford, New Haven, Stamford, and Waterbury.
The new “educational services taxing districts” would, for the purpose of providing educational services, have:
- The power to assess, levy, and collect taxes on all property that may be lawfully taxed
- The power to borrow money (issue bonds, etc.)
- The power to appropriate funds
Correspondingly, the bill would withdraw from municipalities all of the taxing, borrowing, and appropriating powers they currently hold for the purpose of providing educational services.
The bill raises a number of questions, including:
- By what mechanism would district residents have input into the tax rate? Who would provide oversight of the rate-setting process, as towns do now?
- In districts that might become regional or are already regional now, would the school district taxes be imposed and collected according to a district-wide standard, applied across town borders?
- What would happen to the current Education Cost Sharing Formula (ECS), which the state uses to calculate funds it provides to districts to help them ensure an appropriate quality of education to all residents? Currently, those funds are mostly provided to towns and then passed on to school districts.
- Multiple towns are currently responsible for school districts’ capital budgets, and bonding decisions are often made through municipal referenda. Would referenda on bond issuance still be possible, and what entity would organize them?
- If multiple towns in a regional district have different bond ratings, what will happen to available interest rates? Would the new school taxing districts have their own bond ratings, and on what basis would the rating agencies set them? In regional districts, if the people in one town want to build a new school and the people in the other towns disagree, what happens?
- When district-wide taxes have been collected, who decides on how the money will be allocated?
- How many more people would have to be hired to administer these regional and local districts? Who hires them? Who decides how much they earn and how their benefits are calculated? How much would this extra staff require taxes to be raised in each district?
The bill appears to reduce residents’ involvement in the funding of their schools, and to create new layers of administration that would raise costs, at a time when budgets at all levels of government are very fragile. There is no mention of the legislation’s effect on the quality of education provided.
It is also ironic that this bill, which appears to reduce the ability of residents to provide input into and play a role in the finances of their school districts, is being introduced at the same time as the proposal (see HB 7150) in the governor’s budget that would make municipalities responsible for paying a portion of the state’s annual contribution to the teachers’ pension plan – a plan that towns have had no role in developing or negotiating.
Testifying on the Bill: Letting the Committee Know What You Think
If you’d like to submit written testimony on HB 7319:
- Format your testimony in either a Word document or a pdf.
- Include the bill number(s), your name, and your town.
- Attach the document to an email.
- Put the bill number in the Subject Line of the email.
- Send the email to firstname.lastname@example.org by 10:00 a.m. Friday morning.
If you’d like to attend the hearing and/or testify in person, it begins at 12 noon on Friday, March 15, and will be held in Room 1A of the Legislative Office Building (LOB) in Hartford.
Sign-up for speakers will begin at 9:00 a.m. in Room 2100 and order will be determined by a lottery. If you sign up after 10:00 a.m., your name will just go at the end of the speakers’ list.
Please don’t hesitate to contact me if you’d like to discuss this bill or any other issue further. I am always happy to hear from you.
Office: (800) 842-1423