Substitute House Bill No. 7167 seeks to amend the education funding structure in Connecticut by revising the equalization aid grant system for towns maintaining public schools. The bill repeals Section 10-262h of the general statutes and introduces new provisions effective July 1, 2025. It establishes a new framework for equalization aid grants for the fiscal years ending June 30, 2026, and June 30, 2027, ensuring that towns with fully funded grants exceeding their previous amounts will receive grants equal to their fully funded grant, while those with lower grants will receive their prior fiscal year amounts. The bill also maintains specific provisions for alliance districts, ensuring they receive the greater of their calculated grant amounts or their base grant amount. Notably, it deletes previous percentage-based calculations for grant adjustments and replaces them with a more straightforward approach based on prior fiscal year entitlements.

Furthermore, the bill extends the equalization aid grant provisions through fiscal year 2034 and introduces new percentages for grant adjustments for the years 2028 to 2031, significantly reducing the adjustment percentages from previous figures. It also extends the hold harmless provision for overfunded towns for an additional two fiscal years (FY 26 and FY 27), delaying funding decreases until FY 28 while allowing full funding for underfunded towns to begin in FY 26. The estimated fiscal impact of the bill is approximately $8.6 million in FY 26 and $17.1 million in FY 27, as it aims to stabilize funding for municipalities currently overfunded and ensure equitable distribution of education funding across 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