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The Massachusetts Board of Elementary and Secondary Education

Report on Plans for Foundation Budget Review Commission

To:
Members of the Board of Elementary and Secondary Education
From:
Mitchell D. Chester, Ed.D., Commissioner
Date:
September 12, 2014

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At the meeting of the Board of Elementary and Secondary Education on September 23, 2014, I will brief the Board on the upcoming work of the Foundation Budget Review Commission, established by the Legislature through a provision in the FY2015 state budget. The Commission is charged with reviewing the assumptions and factors used to set annual minimum spending levels and state aid allotments for every school district in the Commonwealth. Because of the importance of the state aid formula to our local districts, I have included in this memorandum some explanatory material and links to more detailed information on the Department's website.

Background

The current state aid program that provides general financial assistance to local school districts in the Commonwealth is popularly known as the "Chapter 70 Program" because it was originally codified in Chapter 70 of the Massachusetts General Laws. It was enacted as part of the Massachusetts Education Reform Act of 1993 (St. 1993, c.71, hereinafter "the Act"), to remedy the Supreme Judicial Court's finding in the McDuffy case that the Commonwealth's system of public school financing was unconstitutional.

Among its many groundbreaking provisions, the Act defined a foundation budget for each operating school district, representing the amount of money deemed necessary to provide an adequate education to all students in that district. Each district's foundation budget reflected its enrollment and the demographics of its student body. The Act included a provision to index the foundation budget factors to inflation. Although there have been a few tweaks to this "adequacy" calculation in the intervening years, the underlying assumptions and factors have remained remarkably stable since their adoption in 1993.

The Chapter 70 formula also determines how much of each district's foundation budget will be paid by local taxpayers and how much will be paid by the Commonwealth through Chapter 70 state aid. The overall state target for this split is 59% local and 41% state. But the "equity" provisions in the formula are designed so that poorer communities will receive a higher percentage of state aid and wealthier communities will receive a lower percentage.

The Act called for periodic reviews of the foundation budget formula. It has now been over a decade since the last formal Review Commission issued a report, although several reviews and critiques have been published in the intervening years by private groups and by the Department itself. As school committees faced the yearly challenge of providing a full range of educational programs and services within their available fiscal resources, there was increasing interest in authorizing a new foundation budget study to ensure that our funding formula keeps pace.

Authorization for a New Commission Report

The statutory authorization for the new commission is included in the appendix to this memorandum. The commission will be chaired by the House and Senate chairs of the Legislature's Joint Committee on Education. The commission's membership includes broad representation from the Legislature, the Executive branch, the professional associations and employee organizations representing our schools and teachers, and a variety of civic organizations with an interest and expertise in education. The legislation directs the commission to issue a report by June 30, 2015. The first meeting is scheduled for September 25, 2014. Both the Secretary and I are ex officio members. I have designated Tom Moreau of the Department's staff to represent me when I am unable to attend.

The legislation directs the Commissioner to "provide to the commission any data and information the commissioner considers relevant to the commission's charge" and also to "furnish reasonable staff and other support for the work of the commission." Staff from the Department's school finance and district support center, led by Jay Sullivan and Roger Hatch, will participate in all of the commission's activities and will provide the commission with expert support and advice. In addition, the commission may choose to engage outside consultants to advise it on particular areas of interest.

The Intersection of Funding and Reform

Much of the commission's work is likely to revolve around the question of whether our school districts need more funding. At the same time, I hope that we do not miss the opportunity to use any new infusion of dollars to drive the work of school improvement, particularly in our underperforming schools. All of the research indicates that adequate funding is a necessary but not sufficient factor in closing the achievement gap. Since the Act was enacted in 1993, we have had the opportunity to experiment with and learn from a wide variety of strategies to improve the quality of instruction. I am pleased that the commission's authorizing language specifically references the need to promote more effective utilization of resources. I will be using my role as Commissioner and as a commission member to argue that simply relieving budgetary pressure in districts is not enough. We need to ensure that fiscal resources are aligned with best practices and proven strategies.

Additional Resources

The Chapter 70 program is a fairly complex topic and is summarized in only the most general terms here. Additional resources related to Chapter 70 are available on the school finance page of the Department's website.

Specific resources that you may find of interest include:

  • A 2013 "Report on the Status of the Public Education Financing System in Massachusetts" Download PDF Document  Download Word Document prepared by the Department's school finance staff at the request of the Legislature
  • A white paper Download PDF Document  Download Word Document explaining "How foundation enrollment is calculated"
  • A Powerpoint presentation Download PDF Document  Download PowerPoint File describing the major components of the formula as passed in the FY2015 budget

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Tom Moreau and Deputy Commissioner Jeff Wulfson will join us at the September 23 meeting to answer any questions you may have about the commission in particular or the Commonwealth's education funding system in general.


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Appendix

Foundation Budget Review Commission
Statutory Provisions
St. 2014, c.165

SECTION 124. Chapter 70 of the General Laws is hereby amended by striking out section 4, as so appearing, and inserting in place thereof the following section:-

Section 4. Upon action of the general court, there shall periodically be a foundation budget review commission to review the way foundation budgets are calculated and to make recommendations for potential changes in those calculations as the commission deems appropriate. In conducting such review, the commission shall seek to determine the educational programs and services necessary to achieve the commonwealth's educational goals and to prepare students to achieve passing scores on the Massachusetts Comprehensive Assessment System examinations. The review shall include, but not be limited to, those components of the foundation budget created pursuant to section 3 of chapter 70 and subsequent changes made to the foundation budget by law. In addition, the commission shall seek to determine and recommend measures to promote the adoption of ways in which resources can be most effectively utilized and consider various models of efficient and effective resource allocation. In carrying out the review, the commissioner of elementary and secondary education shall provide to the commission any data and information the commissioner considers relevant to the commission's charge.

The commission shall include the house and senate chairs of the joint committee on education, who shall serve as co-chairs, the secretary of education, the commissioner of elementary and secondary education, the commissioner of early education and care, the speaker of the house of representatives or a designee, the president of the senate or a designee, the minority leader of the house of representatives or a designee, the minority leader of the senate or a designee, the governor or a designee, the chair of the house committee on ways and means or a designee, the chair of the senate committee on ways and means or a designee and 1 member to be appointed by each of the following organizations: the Massachusetts Municipal Association, Inc., the Massachusetts Business Alliance for Education, Inc., the Massachusetts Association of School Committees, Inc., the Massachusetts Association of School Superintendents, Inc., the Massachusetts Teachers Association, the American Federation of Teachers Massachusetts, the Massachusetts Association of Vocational Administrators, Inc., the Massachusetts Association of Regional Schools, Inc. and the Massachusetts Association of School Business Officials. Members shall not receive compensation for their services but may receive reimbursement for the reasonable expenses incurred in carrying out their responsibilities as members of the commission. The commissioner of elementary and secondary education shall furnish reasonable staff and other support for the work of the commission. Prior to issuing its recommendations, the commission shall conduct not fewer than 4 public hearings across regions of the commonwealth. It shall not constitute a violation of chapter 268A for a person employed by a school district to serve on the commission or to participate in commission deliberations that may have a financial impact on the district employing that person or on the rate at which that person may be compensated. The commission may establish procedures to ensure that no such person participates in commission deliberations that may directly affect the school districts employing those persons or that may directly affect the rate at which those persons are compensated.

SECTION 278. (a) The foundation budget review commission established in section 4 of chapter 70 of the General Laws shall file its report on or before June 30, 2015. A copy of the report and recommendations shall be made publicly available on the website of the department of elementary and secondary education and submitted to the joint committee on education.
(b) In addition to the membership listed in section 4 of chapter 70 of the General Laws and for the purposes of this review, there shall be 1 advisory nonvoting member of the foundation budget review commission from each of the following organizations: the League of Women Voters of Massachusetts, the Massachusetts Budget and Policy Center, the Massachusetts Business Roundtable, the Massachusetts Parent Teacher Association, the Massachusetts Taxpayers Foundation, Stand for Children, and Strategies for Children. Advisory members shall be informed in advance of any public hearings or meetings scheduled by the commission and may be provided with written or electronic materials deemed appropriate by the commission's co-chairs. Before finalizing its recommendations, the foundation budget commission established in said section 4 of said chapter 70 shall solicit input from advisory members who may offer comments or further recommendations for the commission's consideration.



Last Updated: September 18, 2014
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