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State Budget Proposal’s Impact on Pensions and Education Funding

Capitol in the rainEducation funding and pensions are two issues of particular importance to teachers in the budget plan Governor Malloy released today at the opening of the 2016 legislative session. The governor’s plan will be debated by members of the General Assembly who will also be proposing budget ideas of their own.

To address a funding shortfall, the governor has proposed 5.75 percent reductions in discretionary agency accounts, including municipal aid, for fiscal year 2017. The Education Cost Sharing (ECS) grant would be exempt from that 5.75 percent reduction and would be flat funded at the 2016 level.

Districts face rising costs every year so, while flat funding is preferable to a funding cut, it still represents a significant challenge for cities and towns when it comes to providing a quality public education for all students. Other education funding streams would see cuts under the governor’s proposal, including magnet school grants, the Open Choice program, special education grants, and priority school grants.

“By level funding the ECS grant, the governor is putting enormous strain on municipal budgets and homeowners,” said CEA President Sheila Cohen. “The CCJEF v. Rell court case is being heard just about a block from the State Capitol. It is ironic that right around the corner Governor Malloy announced a state budget that takes us ever further away from our goal of reducing the state’s overreliance on the local property tax in order to adequately fund public education.”

The difficult financial circumstances in which the state finds itself are due in part to the lack of a comprehensive approach that ensures sufficient state and local tax revenues for critical public services, including education. CEA has long advocated and will continue to advocate for progressive solutions that protect the state’s neediest families.

Pension costs are another area that require government action. If nothing is done, state costs for the Teachers’ Retirement System and the State Employees’ Retirement System combined could balloon to $13 billion by 2032. The governor’s Budget Director Ben Barnes has been quoted by the CT Mirror as saying, “We cannot sustain that. We cannot survive that.”

The governor has put forth proposals for modifying how the obligations of the state pension funds, including the teachers’ pension fund, will be financed over the long-term. CEA has been fully included in discussions with the State Teachers’ Retirement Board (STRB), the Office of Policy and Management (OPM), and the Office of State Treasurer Denise Nappier because we all have the shared goal of ensuring the long-term solvency, the stability, and the benefit structure of the state teachers’ retirement fund.

To that end, CEA plans to participate in the pension work group the governor outlined in his state of the state address today. CEA will also closely monitor any and all proposals in our longstanding and continued effort to protect the retirement security of all active and retired members.

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