Substitute House Bill No. 7167 seeks to amend the education funding framework in Connecticut by revising the equalization aid grant structure for towns maintaining public schools. The bill repeals Section 10-262h of the general statutes and introduces a new grant structure effective July 1, 2025. Key provisions include determining grant amounts based on whether a town's fully funded grant exceeds its previous year's equalization aid grant. For the fiscal year ending June 30, 2026, towns with a fully funded grant greater than the previous year's grant will receive that amount, while those with a lower grant will receive the amount they were entitled to for the fiscal year ending June 30, 2025. Alliance districts will receive the greater of their calculated grant amounts or their base grant amount. The bill also outlines similar provisions for the fiscal year ending June 30, 2027, while removing language regarding percentage deductions from previous grants to simplify calculations.

Additionally, the bill extends the hold harmless provision for overfunded towns for two additional fiscal years (FY 26 and FY 27), allowing these towns to maintain their funding levels from FY 25, with reductions beginning in FY 28 instead. The bill preserves existing provisions for fully funding underfunded towns starting in FY 26. The projected fiscal impact includes costs of approximately $8.6 million in FY 26 and $17.1 million in FY 27 to the General Fund, as it prevents revenue losses for municipalities. Overall, the bill aims to stabilize education funding while providing a clearer framework for grant calculations and ensuring adequate support for both overfunded and underfunded towns.

Statutes affected:
Raised Bill: 10-262h, 10-252a
ED Joint Favorable Change of Reference: 10-262h, 10-252a
APP Joint Favorable Substitute: 10-262h
File No. 886: 10-262h