Budget woes build for city schools

Hartford officials point to myriad contributing factors, including increased costs and decreasing revenue

Hartford Public Schools are facing a $12.4 million deficit for 2022-23 and district officials are predicting a $24 million deficit for 2023-24 as costs increase while revenues fall.

Officials point to a decrease in enrollment and dissipating COVID-19 federal relief funds as major factors, but special education costs and limited funding from the city are also at issue.

“Our enrollment decline continues to be a massive contributor to our stagnant revenue,” said Phillip Penn, Hartford Public School CFO. “We’re forecasting another drop in our enrollment next year with around a 1.5% decrease.”

A projected 16,517 students are expected to enter HPS classrooms this coming fall, a 266 decrease from the previous school year.

Since the 2016-17 school year, enrollment across HPS has decreased by more than 4,000 students. The largest decrease in enrollment came during the height of the COVID-19 pandemic with a loss of more than 1,100 students during the 2020-21 school year.

However, as enrollment has continued to decline across the district, CREC magnet schools have seen an increase in enrollment mainly from Hartford residents.

“Approximately 900 more Hartford residents have enrolled in non-hps magnet schools during the same time period,” Penn said.

In addition to the increased magnet school enrollment, the district has seen 489 fewer suburban residents enrolled in HPS magnet schools than originally projected.

“State grant money is down significantly because of a big drop in the magnet school operating grant,” Penn said. “We receive a little over $13,000 per suburban students through that grant to go against the costs of running our magnet schools. We anticipate that drop to continue next year as well.”

The district is expecting a decline in the magnet school operating grant of a little under $8 million due to the drop in enrollment from suburban students.

Revenue is expected to drop by more than $3 million compared with the 2022-23 budget, with no projected increase in local funding through tax dollars.

The district is expecting approximately $96 million from local funding in 2023-24, a zero-dollar increase from previous years.

“Local taxes make up about 23% of our funding total,” Penn said. “Local funding has been flat over the last 10 years and we anticipate that to be the case for at least the

Loss of federal relief funds: One of the largest funding sources for the district being used for deficit mitigation is slowly dissipating.

HPS received three federal COVID-19 relief grants totaling just over $154 million to be spent through September 2024.

The district has spent over $59 million of those funds so far, with the bulk of the rest earmarked for staffing costs and SEIG funds.

Scaling Equity Innovation Grants are funded by $15 million in federal COVID relief funding and allow each of the 39 schools that make up the district to fund a program or strategy that best fits the needs of its unique school community.

While the district plans on using around $9 million of those federal dollars to help close the 2023-24 deficit, the district advises against using additional COVID relief dollars for future cost mitigation as the funds are a temporary fix.

“We have to be mindful that using another portion of COVID funds for future operating expenses gets us at an even steeper fiscal cliff,” said Dr. Leslie Torres-rodriguez, superintendent of Hartford Public Schools. “In any given year, inflation of about 3% increases our costs by about $13 million and adding another $9 million to that for expenses that were temporarily covered by the COVID funds, means we would be digging our way out of a $22 million deficit for 2024-25. So we have to be thoughtful as what we do now impacts next year.”

Torres-rodriguez said that the district has to begin to prepare for when those funds run out in 2024.

Increased operating costs : The district is expecting increased costs to further eat away at already dwindling revenues.

“I call it the big four for HPS and those include staffing costs, tuition costs, transportation and utilities,” Penn said. “Those four items make up 94% of our total budget. So everything else we spend our money on only amounts to $24 million.”

At issue in part is a complicated balance of funding between Hartford Public Schools and the Capitol Region Education Council or CREC, which operates interdistrict magnet schools that draw interested students by lottery from Hartford and the surrounding suburbs.

Torres-rodriguez said that the district has seen increased enrollment of Hartford students at CREC schools over prior years, which has added to costs. The district must pay tuition for Hartford students who enroll at CREC schools and also loses funding due to decreased enrollment figures within the district.

“We’ve seen an increase of around 300 more students attending CREC schools than the previous year,” Torres-rodriguez said. “One of the biggest drivers is an increase in tuition per student from CREC over three years from 2021-22, 2023-24 and 2024-25. It’s an increase of $2,400 per student spread out over three years. The total impact of the combined loss of revenue and the higher tuition costs is projected $8.6 million.”

In addition, the district expects an increase of $5.6 million in transportation costs and a $1.1 million increase in utilities from 2022-23.

The district anticipates spending a little over $27 million on transportation costs and $9.5 million on utilities this year.

“This is caused by an increase in door to door costs mainly for special education students who have been outplaced outside of the district,” Penn said. “It can cost upwards of $600 per day to operate a transport van. Both gas and natural gas for heating have also both increased.”