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 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 those fully funded amounts, while towns with lower grants will receive the same amount as the prior fiscal year. The bill also includes specific provisions for alliance districts, ensuring they receive the greater of their calculated or base grant amounts, and removes previous percentage deductions from grant adjustments to simplify calculations.

Furthermore, 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 instead of facing reductions. The Education Cost Sharing (ECS) grant for these towns will be the greater of their fully funded grant, base grant amount, or previous year's equalization aid grant entitlement. The bill is projected to cost approximately $8.6 million in FY 26 and $17.1 million in FY 27, delaying funding reductions for overfunded towns until FY 28 and extending the timeline for achieving full funding from FY 32 to FY 34. Overall, the bill aims to create a more equitable education funding system while maintaining 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