FY20 Chapter 70 Aid and Net School Spending Requirements

On July 31, 2019, Governor Baker signed the FY20 state budget that authorizes $5,176,002,652 in Chapter 70 education aid to Massachusetts school districts. This budget increases aid by $269 million or 5.5 percent over FY19. Every operating district receives at least $30 in additional aid per student.

The foundation budget inflation rate is 3.75 percent and some rates are increased by additional amounts in the areas described below. For FY20, 144 operating districts receive aid increases so that they can keep pace with increases in their foundation budgets.

The FY20 budget implements foundation budget rate increases toward multiyear goals in the four areas identified by the Foundation Budget Review Commission (FBRC). These changes include:

• Increasing the benefits and fixed charges rates to align with the most current Group Insurance Commission (GIC) premium rates for both active and retired municipal employees, closing one-seventh of the gap between the FY19 rates and the new goal rates.
• Updating the foundation budget assumptions for in-district and out-of-district special education students:
  • The in-district special education assumed enrollment percentages are increased toward the goal of 4 percent for non-vocational students and 5 percent for vocational students. The FY20 rates are 3.79 and 4.79 percent for non-vocational and vocational students, respectively, which closes one-seventh of the gap toward the goals.
  • The rate for out-of-district special education tuition is increased to narrow the gap between the foundation budget and the circuit breaker eligibility threshold, which is four times the statewide average foundation budget per pupil. The goal is set at three times the FY19 statewide average foundation budget per pupil or $34,345 and the FY20 rate closes one-seventh of the gap toward this goal plus inflation.
• Increasing the increments for English learners (ELs), including vocational students, toward a new, uniform goal rate of $2,537 per student. The FY20 rates close one-seventh of the gap toward the goal over FY19 rates plus inflation.
• Implementing a more progressive decile rate structure for economically disadvantaged (EcoDis) students that expands the foundation budget for deciles 6 to 10, setting the goal rate for decile 10 at 100 percent of the average base rate. The FY20 rates narrow one-seventh of the gap toward the goal over FY19 rates plus inflation.

Other highlights of the FY20 program:

• The equity component of the formula ensures that municipalities with preliminary contributions above target are brought down to target, closing 100% of the gap. This applies to 119 of the 351 cities and towns (34 percent).
• The local contribution requirements for cities and towns with combined effort yields greater than 175 percent of foundation are set at 82.5 percent of foundation. This impacts 23 communities.
• FY19 transition aid totaling $11.9 million is included in base aid for 11 districts significantly impacted by the change in the student poverty measure. The districts are: Brockton, Chelsea, Everett, Framingham, Lawrence, Lynn, Marlborough, Methuen, Quincy, Revere and Swansea.
• Statewide enrollment decreased from 941,411 in FY19 to 939,683 in FY20, a 0.18 percent decrease. Eight districts experienced foundation enrollment increases of more than 5 percent.
• DESE is in the process of determining the allocation of FY20 transition aid to districts significantly impacted by the change in the student poverty measure. Based on budget language, once these funds are allocated, they will not be added to the receiving districts' net school spending requirements and will not be counted in FY21 base aid.

In addition to the changes to the Chapter 70 program described above, the charter tuition and reimbursement program is restructured:

• The reimbursement formula returns to a 3-year schedule for transitional relief, with the goal for year 1 reimbursements set at 100%, year 2 at 60%, and year 3 at 40%. Funding for year 1 reimbursements is prioritized over funding for years 2 and 3.
• FY20 funding increases by $25 million over FY19, with $15 million targeted to address two specific items:
  • $7.5 million in supplemental aid is provided to districts with high charter tuition costs and relatively low Chapter 70 aid to ensure a minimum level of state support for charter tuition.
  • $7.5 million in additional aid will be distributed to districts to mitigate the costs associated with significant and sustained charter school enrollment growth. DESE will be working on distributing these funds in the coming weeks.
• The facilities component of the charter school tuition rate is increased to $938 per pupil, the first such increase in more than a decade, and districts continue to be fully reimbursed for these costs.

DESE 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 contributions for each member of the district.

• Powerpoint presentation, describing the major components of the formula

• White paper, describing the major components of the formula in greater detail

• Complete formula spreadsheet, showing the detailed calculations for each municipality and district.

• FY20 charter school tuition and enrollment projections

Questions about the Chapter 70 program should be directed to:

Rob O'Donnell
781-338-6512

Rob Hanna
781-338-6525

Last Updated: July 31, 2019