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The Massachusetts Board of Elementary and Secondary Education

Chapter 70 Update

To:
Members of the Board of Elementary and Secondary Education
From:
Mitchell D. Chester, Ed.D., Commissioner
Date:
February 17, 2017

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On January 25, 2017, Governor Baker released House 1, his proposed state budget for fiscal year 2018. As shown in the chart below, his proposal increases Chapter 70 aid from $4.628 billion to $4.719 billion, an increase of $91 million (2%).

Chapter 70 Program — Comparison of FY17 (actual) with FY18 (House 1 proposed)
 
 FY17 FY18ChangePct Chg
Enrollment940,103941,3031,2000.13%
Foundation budget10,128,238,38310,343,846,027215,607,6442.13%
Required district contribution5,926,185,5676,032,954,990106,769,4231.80%
Chapter 70 aid 4,627,705,0614,719,098,68391,393,6221.97%
Required net school spending (NSS)10,553,890,62810,752,053,673198,163,0451.88%
 
Target aid share41.00%41.00%  
C70 % of foundation45.69%45.62%  
 
Required NSS % of foundation104.20%103.95%  

Looking at the major factors in the formula:

  • Enrollment statewide increased very slightly. There continues to be more significant enrollment growth in urban districts and certain suburban districts in the eastern part of the state, while many rural districts in the western part of the state continue to lose enrollment.
  • Inflation continues to be low (1.11%).
  • Economic development, particularly in the metropolitan Boston area, resulted in significant increases in required local contributions in many communities. Thirty-five cities and towns had municipal revenue growth factors exceeding five percent. At the same time, equity relief is provided to those municipalities with required contributions above their targets.
  • As a first step toward implementing the recommendations in the 2015 report of the Foundation Budget Review Commission (FBRC), the Governor has proposed a $66 million increase in the foundation budget category for Employee Benefits. The FBRC cited the rising cost of health insurance benefits for employees and retirees as a major contributor to pressure on school budgets.
  • Two hundred thirty-seven districts receive the minimum aid increase of $20 per pupil.

FY18 will be the second year in which the Commonwealth has used the new "economically disadvantaged" metric to determine the additional funding that districts receive under Chapter 70 to meet the extra needs of students from low income families. This change was necessitated by new eligibility rules for the National School Lunch Program adopted by the U.S. Department of Agriculture (USDA) several years ago. For many years, the Department used eligibility for free and reduced price school lunches as our measure of student poverty. Under the new USDA rules, more students benefit from school nutrition programs and many districts with significant numbers of eligible students no longer need to collect eligibility data from their families.

The economically disadvantaged metric is based on the number of students whose families receive benefits under the Supplemental Nutritional Assistance Program ("SNAP", formerly known as food stamps) and other assistance programs administered by the Executive Office of Health and Human Services. At the request of the Legislature, the Department recently issued the attached report, which describes the transition to this new metric in detail. The report notes that most districts saw no change or a net gain in their Chapter 70 aid as a result of this change in measurement. But additional study is needed to address the impact on the small number of districts that have disproportionately high numbers of refugees and undocumented immigrants.

Deputy Commissioner Jeff Wulfson and School Finance Programs Manager Melissa King will join us at the February 28 meeting to discuss these issues in further detail.

Attachment:

Download PDF Document
Low Income Student Calculation Study Feb 2017


Last Updated: February 27, 2017
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