School Finance: Chapter 70 Program
Update on Federal Education Jobs Funding and FY11 Chapter 70 Program
August 25, 2010
On August 10 President Obama signed Public Law No. 111-226 which provides additional federal recovery funding to states. Title I of this law establishes a new "Education Jobs" program, with approximately $204 million allocated to Massachusetts. On August 24 Governor Patrick announced that these funds will be allocated to K-12 school districts in conjunction with the state's Chapter 70 school funding formula, as follows:
$54.6 million will be used to replace a portion of the FY11 state fiscal stabilization fund (SFSF) allocations previously used to supplement the FY11 Chapter 70 program. Each district's SFSF reduction will be offset by a dollar-for-dollar allocation of Education Jobs funds. The SFSF funds freed up by this change will be reserved for other essential services outside of the K-12 area.
$143.6 million will be used to offset the previously announced 4% cut in most districts' Chapter 70 aid and to fully fund the minimum aid provision of the Chapter 70 formula at $25 per pupil. This means that every operating district will see a minimum increase of $25 per pupil compared to FY10 levels, based on the combined amounts of state Chapter 70 aid, federal SFSF grants, and federal Education Jobs grants.
$2.2 million will be used to fund Chapter 70 obligations for four districts as a result of recently approved DOR local contribution waivers (authorized by St. 2009, c.27, s.115 and St.2010, c.134).
$3.6 million has been reserved for state-level grant administration, monitoring, oversight, and reporting activities.
As a result of this additional funding, the total Chapter 70 program (including state Chapter 70 aid, federal SFSF grants, and federal Education Jobs grants) will rise from $4.043 billion in FY10 to $4.072 billion in FY11, a $29 million or 0.7 percent increase. Most districts will be receiving more funding for FY11 than was projected on June 30, and no district will receive less. Eleven districts will see no change in their total funding from the June 30 projections; these are districts that are receiving sizeable increases in state Chapter 70 aid for FY11 that exceed the $25 per pupil minimum.
The primary purpose of the Education Jobs program is to allow local school districts to retain existing employees, to recall or rehire former employees, and to hire new employees for the 2010-11 school year. Please see the U.S. Department of Elementary and Secondary Education guidance paper for more information on the allowable uses of these funds; these allowable uses differ significantly from the rules for the SFSF program. Superintendents and school committees should begin immediately to plan for the coordinated use of both SFSF and Education Jobs funds. Please note that SFSF grants may be used for eligible expenses back to July 1, 2010; Education Jobs grants may be used for eligible expenses back to August 10, 2010. If a district has unspent Education Jobs funds remaining at the end of FY11, it may request the carryover of those funds into FY12 and/or the first quarter of FY13.
Districts will shortly be receiving guidance and instructions on how to access their SFSF funds (including any funds carried over from FY10) and their Education Jobs funds. Our goal is to have all of these grants awarded no later than the end of November, and earlier if possible. As is the normal practice with federal grants, the school committee will be the recipient of the SFSF and Education Jobs grants, and no action is required by the local appropriating authority. Normal cash drawdown procedures will be in effect, as will ARRA reporting requirements.
The new Education Jobs funding and the adjustments to the previously announced SFSF allocations do not change any of the core components of the Chapter 70 formula. Enrollment, foundation budgets, minimum contributions, Chapter 70 aid, and net school spending requirements remain the same as the amounts published on June 30. Although SFSF and Education Jobs grants help districts reach the funding targets under the Chapter 70 program, these grants are not included in districts' net school spending requirements.
We have updated the following documents to reflect the addition of the Education Jobs funds:
Summary chart showing foundation enrollment, foundation budget, Chapter 70 aid, required local contributions, and SFSF and Education Jobs allotments 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 directed to: