Face the Facts: How the US Department of Education shutdown would impact CT

Has there ever been a time when how we fund education has been in a brighter spotlight?

Cities and towns are calling for more funding from the state. Add to that the uncertainty surrounding President Trump's executive order calling for the closure of the U.S. Department of Education.

Senator Doug McCrory (D-Hartford), the co chair of the Education Committee, gives us his perspective.

Mike Hydeck: Alright, so since Connecticut funds really roughly 90% maybe 92% of our budget, when we start hearing about the federal Education Department being shut down or pared back significantly, is that going to affect us significantly, do you think?

Doug McCrory: Absolutely. I mean, you know what they do in Washington, DC affects us on a tremendous level. Title I, you know, you're talking about billions of dollars that's being poured out from Washington, DC into states all over the United States, and coming to Connecticut. My question, concern is, elections have consequences. We understand that, and decisions are being made. But the reality is, you have a plan, and if you're going to shut down the Department of Education without a plan, that becomes problematic, because all these services still have to be played out, and we don't know how that's going to work.

Mike Hydeck: So we don't know at this point if the president has said, "well, some of the functions under Department of Education could go under, commerce." So where do the checks come from?

Doug McCrory: So it's not as easy as it sounds. Just because you have a understanding about Commerce or HUD or something, who knows who's over there knowing anything about education, that's the problem. You gotta have people that know how to do these things and have a mechanism for getting things done. How are you gonna get these dollars out back to the states? Who are you going to talk to at the state level? Have you had any conversation with people at the state level, at State Department, how these are going to operationalize? And this is happening as we go. This is not between school years. This is not the summertime when we have an opportunity to have conversations. This is happening on the fly, and that concerns me.

Mike Hydeck: So your fellow Democrats have said, "Look, if we are impacted negatively, significantly, the state's going to pick up the slack." How do we do that?

Doug McCrory: Unless we hit the lottery? I don't quite, I'm not quite sure where. We do have some money in reserves for right now.

Mike Hydeck: They said, the next three years, $1.3 billion in the rainy day fund.

Doug McCrory: That's a lot of money. I know we do not have the financials. We don't have the mechanism, or the means to take care of that. We're struggling to pay for education right now, let alone have to fill in the gap from the federal government.

Mike Hydeck: So you think the rainy day fund should be off the table?

Doug McCrory: I think we have to utilize all our options. Rainy day fund will be an option, but that's something that has to be planned out.

Mike Hydeck: Now, as you mentioned a moment ago, cities and towns, Connecticut Conference of Municipalities came out this week saying, "Look, cities and towns are collectively underfunded about $400 million a year." We're not keeping up with inflation, so towns are at risk of having to raise taxes on everybody. How do we fix that? That's a lot of money.

Doug McCrory: And don't include there's a conversation about disconnected youth. They're asking for like, $300 million. Everyone has their hands open. The question becomes, how do we fund it, and what our priority is going to be. I'm a big proponent of education. I've been in this field for 34 years. I believe in it, but I do know some changes need to be done, and I do know we cannot continue to rely just on property taxes. Reality, it doesn't work. There's too many communities that have so many properties that are exempt from taxes. For example, in New Haven, 56% of their property is exempt from taxes.

Mike Hydeck: Between hospitals, universities, they don't pay those taxes.

Doug McCrory: Same way in city of Hartford. So many hospitals, universities, governmental building, all those things you can't tax so, when people, when communities, are struggling for finances, those are the reasons why. That's why we have to have a larger conversation about how we're going to fund education in the state.

Mike Hydeck: So for those communities like Hartford and New Haven that you mentioned, there's the formula Payment in Lieu of Taxes, PILOT. So does that need to be adjusted?

Doug McCrory: That needs to be adjusted. Absolutely. They haven't been adjusted over a while. But again, PILOT in lieu of taxes, it's not enough, and we have never fully funded PILOT in the first place. So again, communities, large communities around our state, need that support.

Mike Hydeck: So Senate Bill 1, the governor continues to talk about, look, changing the spending caps are off the table for him. Senate Bill 1 suggests that, right? Do we go in that direction, do you think? Does it have a chance of passing?

Doug McCrory: There's a couple options out there around SB 1 and how we're going to fund pre-K education, early childhood education. I believe the Senate Bill is really strong, because what it does is we take that $300 million that we want to put away. And we invest it for a couple years. Makes just, you know, some interest on it. Let's get $30 or $60 million on it.

Mike Hydeck: But that's pre-K. That's not K-12.

Doug McCrory: K-12 is a whole another conversation. Just in SB 1 is the pre-K issue, and how we want to fund that by putting aside $300 million, let it invest for a while, maybe collect about $60 million and then start funding something, funding some of those pre-K programs. Now when we talk about K-12, that's a whole another conversation that we need have.

Mike Hydeck: So I'm going to have to have you back for that one because I'm out of time.

Doug McCrory: No problem. Thanks for having me.