Mass. school funding formula gives wealthy districts more aid than they need

The formula for distributing state funding to schools in Massachusetts gives wealthier districts more money than they need, creating a widening equity gap at the expense of students in low-income communities, according to a report released Monday from the Massachusetts Business Alliance for Education and the Greater Boston Chamber of Commerce. 

Load Error

The two groups found in their analysis that some factors in the funding formula result in wealthier districts getting additional state money, despite being able to fully fund their schools “with less or no state aid.”

“Equitable access to resources is an essential component of closing equity and opportunity gaps,” Ed Lambert, executive director of Massachusetts Business Alliance for Education, said in a statement. “It is critical, particularly in this economic climate, that we redirect state dollars to communities serving students that need them the most.”

The Chapter 70 funding formula, created by the 1993 Education Reform Act, aims to make up the difference between what an “adequate education costs” and what the local community can afford with state funding, the report notes. But the analysis by the two groups found that in the years since then, “political compromises” aimed at ensuring every community could benefit resulted in “growing amounts of state funding being distributed to higher wealth communities.”

The problematic elements of the formula were left largely unchanged by the Student Opportunity Act, the milestone education reform bill passed in November 2019, the groups found.

According to their analysis, about 14 percent — $778 million — of the aid for schools in the  proposed state budget for next year is being allocated to districts based on “needs-blind formula factors” that do not take into account the underlying needs in the community. Much of that money — 64 percent, or about $498 million — that is based on what the report calls “needs-blind formula factors” would go to the wealthiest 20 percent of districts in Massachusetts despite their ability to fully fund their schools on their own.

The writers of the report urged that leaders in Massachusetts reevaluate whether the state should continue to “subsidize” wealthier communities in the state, rather than investing in equity for students in districts with the most need.

“This is state money that could otherwise be used to accelerate increases in funding to higher needs districts that do not have the capacity to fully fund their schools,” the report states. “It is funding that could be used to close yawning gaps in opportunity and achievement for high-needs and low-income students, gaps that have likely been widened by the recent school closures related to the COVID-19 pandemic. Efforts taken now to roll back some of these nonprogressive funding elements could produce the money necessary to close the digital divide that has consigned so many lower income students to a dangerous loss of learning and instruction that threatens their economic future.”

The state’s Executive Office of Education and Department of Elementary and Secondary Education did not immediately respond to requests for comment Monday on the report. 

The report recommends several measures, including phasing out incrementally the “hold harmless” provision that guarantees districts receive at least the same amount of Chapter 70 aid as they were allocated the previous year, regardless if the number of students they serve has decreased and their need has lowered. According to the report, about $319 million in the proposed state budget is connected to the provision, with the wealthiest districts receiving about five times more aid attributable to the measure, per student, than the least wealthy schools. 

They also recommend phasing out “minimum aid,” which guarantees districts are provided a flat, per-student increase in aid when they would not otherwise get an increase. Under the proposed budget, the minimum aid rate is $30 per student, totaling about $11.9 million, but the wealthiest communities are receiving more than six times the amount of minimum aid per student “compared to the lowest-resourced school districts,” according to the report.

James E. Rooney, president & CEO of the Greater Boston Chamber of Commerce, said in a statement that an equitable economic recovery from the coronavirus pandemic requires “greater attention” to how the state uses its resources. 

“Our priority rests with ensuring every student can access a quality education and that we continue to make headway toward closing achievement gaps,” he said. “The economic future of these students and the state depend on it.”

The report noted that the formula for determining how schools are funded is “complex and multifaceted” and that any changes to address one issue could create “unintended consequences that impact other communities in negative ways.”

“We understand that some rural and other districts have unique circumstances that must be accounted for,” the two groups wrote in their analysis. “Rather than call for an immediate end to the elements of the Chapter 70 aid formula highlighted in this report, we recommend beginning to roll them back in ways that advance the original intent of the formula as a vehicle for filling funding gaps in communities where the need exists.”