Massachusetts Gov. Charlie Baker’s proposed fiscal 2021 budget gives the wealthiest 20% of school districts $498 million in funding at the expense of low-income districts due to factors that have nothing to do with need, according to an analysis by the Massachusetts Business Alliance for Education and the Greater Boston Chamber of Commerce.
The report, published Monday, questions “needs-blind” factors in the state’s education budget that get the wealthiest school districts hundreds of millions in Chapter 70 funding even though they can afford to operate with less or even no state aid. The report argues budget writers should redirect money from those funding sources to reduce the wealth gap between the wealthiest school districts and their less affluent counterparts.
“In this era of limited resources and with the spotlight on equity, we think this is exactly the right time to focus on equity and get the kids who need the resources the money they should have as quickly as possible,” said Ed Lambert, executive director of MBAE, “and that will probably mean not spending as much money as we’ve spent in the past to communities who don’t have the same level of need.”
The landmark education law that Baker signed in November requires Massachusetts to provide $1.5 billion more annually to public schools with a phase-in over seven years. Under the retooled funding formula, districts slated to receive the most money are those with high concentrations of poor students and those with a large number of students learning English.
Fiscal 2021 is supposed to be the first year of the law’s phase-in period. But the Legislature has yet to debate a budget or even propose its own due to disruptions caused by the coronavirus pandemic. The budget proposal introduced by Baker in January includes $5.48 billion in Chapter 70 funds with $778 million or 14% going out to districts on “needs-blind” factors, as the report calls it.
While the Legislature has debated a budget, or even proposed its own, lawmakers and the Baker administration committed to keeping fiscal 2021 local and school aid level and to provide another $107 million in school aid for inflation and enrollment changes.
The landmark education law did not tackle how “needs-blind” pool of money, as the report calls it, should be distributed. Under the education law, state officials are supposed to deliver a report taking a closer look at that type of aid and make recommendations.
The alliance calls for phasing out multiple funding sources, including the hold-harmless provision that lets districts retain money they lost due to enrollment decreases, and increasing how much school districts contribute to educating funding.
Perhaps the easiest pool of funding to understand is the local contribution cap. Communities are not allowed to contribute more than 82.5% of the foundation budget.
The report suggests lawmakers could redirect money to school districts who need it most if the local contribution ceiling is raised from 82.5% to 85%. Such a move would reduce Chapter 70 aid for the wealthiest 40% of districts by roughly $5.4 million and increase aid for the rest by $11.8 million.
The change would require a net increase of $6.4 million in Chapter 70 aid.
Solely increasing local contributions is not enough, Lambert says, because there are other pools of funding available to districts that lose funding even if they can afford to operate without it.
“It’s hard to get rid of one and then say you solved part of the issue,” he said. “You could get rid of, for instance, the cap, the 82.5%, but then some of the communities (that) would lose out on that would simply gain by the other pieces so they truly all work together.”
The hold harmless provision, which allows school districts to retain the amount of Chapter 70 aid they receive even if enrollment drops, accounts for $319 million in the fiscal 2021 budget proposal, or $340 per student. Yet the wealthiest communities typically receive more than five times as the least affluent communities per student in hold-harmless base aid, the report suggests.
Minimum aid goes to school districts who did not receive a large foundation aid increase to boost its spending per pupil. The report suggests minimum aid would send $3.8 million to the 39 wealthiest school districts and $741,840 to the 17 least affluent districts under the governor’s budget proposal. Another $11.2 million would go to schools that fall somewhere in between.
Minimum aid can be reduced or increased through legislative appropriation, Lambert.
The MBAE also took a closer look at school districts who receive aid from the state to boost their spending per pupil because school districts legally cannot increase their budgets by more than a fixed percentage each year. The result is the state shells out millions in “below-effort aid” to help them reach their target contributions.
According to the report, this type of aid makes up about $156 million in Chapter 70 aid in the governor’s budget proposal. The MBAE suggests eliminating “below-effort aid” to school districts that can afford to fund 125% or more of their foundation budget through local taxpayers.
Lambert suggests the Legislature review all these provisions and change all of them, even if incrementally, rather than honing in on one funding source.
“If you remove one of them, communities could still benefit in other ways through hold harmless and things like that, so you’re not really going to get at the core of the problem unless you’re moving all of them forward,” he said.
While the new education law is in the books, lawmakers are expecting input on how to make additional reforms on funding sources like the ones the report identified. Under the Student Opportunity Act, the Department of Early and Secondary Education and the Department of Revenue are required to prepare a report to the Legislature.
The economic crisis sparked by COVID-19 and the absence of federal relief to states and municipalities has state officials less certain than ever that they will be able to deliver on the education law’s needs-based funding mandate.
Joint Committee of Education co-chairs did not comment on the MBAE’s report Monday morning. Sen. Jason Lewis is still reviewing the report, a representative said. Rep. Alice Peisch’s office did not immediately respond to a request for comment Monday.
Baker said school districts received more money than called for under the education law, between the state and CARES Act funding. School districts statewide did receive more money, but mostly for technological and infrastructure upgrades to improve remote learning and to help ensure students returning to in-person instruction have better air circulation and resources in the classroom.
“How that translates in terms of expenses as they go through the year, in some cases mean they probably spent less on certain things and in some cases, they’ll probably spend more,” the Republican governor said last week. “I’m very proud of the fact that the Legislature and the administration between state funds and federal funds were able to put significant resources into the hands of cities and towns and school systems as they work their way through this process.”