School Finance: Chapter 70 Program
FY10 Chapter 70 Aid and Net School Spending Requirements
October 30, 2009
On June 29th Governor Patrick signed the FY10 state budget which authorizes $3,869,526 million in Chapter 70 education aid to Massachusetts school districts. This is a reduction of $78,969,917 or two percent from the original FY09 appropriation. The final FY10 numbers differ significantly from the preliminary estimates published in January based on the Governor's House 1 budget proposal.
As the state budget situation has deteriorated over recent months, a sizeable infusion of federal stimulus dollars, through the state fiscal stabilization fund (SFSF) program, has helped avoid even more drastic reductions to Chapter 70 funding. $412 million was used to make the final FY09 payment in June. The Fy10 formula relies upon $168 million of additional SFSF grant money, which prevents 151 operating districts from falling below their foundation budgets.
Here are highlights of the FY10 Chapter 70 program:
All foundation budget factors have been increased by 3.04%, using the federal government's price deflator index for state and local government expenditures. Budget language authorizes the use of the index for the second quarter of FY09 instead of the first quarter.
FY10 continues, but moderates, the implementation of the anticipated five-year phase-in of the aggregate wealth model for calculating required local contributions. Each municipality's target contribution has been updated using 2008 property values and 2006 personal income data. For municipalities with required contributions above their targets, the requirement is reduced by 15% of the gap (compared to 33% last year).
Every district's aid is cut by two percent compared to FY09.
$168 million in SFSF grants will be available to districts whose net school spending is below foundation.
The down-payment, growth, and minimum aid provisions used in the previous three years are not funded.
Net school spending requirements will equal the sum of FY10 Chapter 70 aid (reflecting the two percent cut) and required contributions. Required net school spending in 151 districts will be lower than foundation budgets, but these districts will receive sufficient SFSF grant funding to spend at foundation levels.
The Department of Elementary and Secondary Education has prepared the following materials to assist local officials in understanding the state aid calculations and local contribution requirements in this year's Chapter 70 program:
Summary chart, showing foundation enrollment, foundation budget, Chapter 70 aid, and required local contributions for each school district.
Summary chart for regional school districts, showing foundation enrollment and required local contribution for each member of the district.
White paper, describing the major components of the formula
Complete formula spreadsheet, showing the detailed calculations for each municipality and district.
Questions about the Chapter 70 program should be addressed to either: