School Funding Shortfalls Tied to Legislature "Glitch"

The 2019 school funding law known as the Student Opportunity Act has led to an additional $878 million in state aid for K-12 schools through fiscal year 2025, but schools in 220 districts would be getting a slice of an additional $465 million if the Legislature had addressed a "glitch" in the funding formula, advocates and analysts said Tuesday.

"What we're seeing today is a flaw in that funding formula that can be fixed. So there is an opportunity that legislators can do to ensure that the promise of the Student Opportunity Act is kept for our students, communities and schools. If we do not move forward with this promise to fix the inflation issue, we'll see there'll be a lot of cuts in our schools, particularly on programs that impact our students well being and learning opportunity," Vatsady Sivongxay, executive director of the Massachusetts Education Justice Alliance, said. She added, "This is what will happen if the inflation glitch is not fix."

At issue is the Chapter 70 funding law and its provision that limits inflation adjustments to no more than 4.5 percent. So while school systems watched their costs driven up by inflation of 7 percent in fiscal 2023 and 8 percent in fiscal 2024, the state resources provided to them through Chapter 70 only increased 4.5 percent each year. And since one year's funding level forms the basis for the next year's, schools say value lost to the cap in one year is not made up in future years.

This year, Gov. Maura Healey's proposed Chapter 70 allocation applied a 1.35 percent inflation rate to foundation budgets, based on the U.S. Department of Commerce's state and local government price deflator, according to the administration.

Colin Jones, deputy policy director for the Massachusetts Budget and Policy Center, participated in a MEJA virtual press conference Tuesday to give a preview of a report to be released later this week on the impact of the "glitch."

"Providing the full value of the Student Opportunity Act, so matching inflation in our K-12 funding to what actually happened in the economy, would require $465 million in additional funding, if it were to be done, again, immediately in the fiscal 25 budget that's about to start," he said. "There's 220 districts that would gain from that, and about half, a little bit over half, go to the Gateway Cities."

If the Legislature and governor were to get on board with the formula change to account for the recent high rates of inflation, Jones said, the average district would gain $1.5 million in annual Chapter 70 funding and the median district would gain about $512,000. There are 133 districts that would see more than $1 million more in state aid and 22 districts that would gain more than $5 million.

The district that stands to gain the most is Springfield, which would see an additional $29 million if not for the inflation issue. Jones said MassBudget arrived at the figures by considering "all the inflation we missed the last few years, we ran that through the formula, and caught up again."

The only other district where the difference between actual Chapter 70 aid and what Chapter 70 aid would have been if not for the inflation issue is greater than $20 million is Worcester ($26 million).

Worcester Superintendent Rachel Monárrez joined Tuesday's press conference to explain how the contours of the funding formula are affecting schools in the City of the Seven Hills. She said "it is no secret that the inflation rate is having a significant impact on our district's budget for next school year."

"The district's actual inflation, to maintain the same staffing and programming, was about 5.8 percent. But the state is only going to reimburse at 1.35 percent, as we know. And so about 65 percent of Worcester's budget comes from state funding, so this is a significant gap. We are currently facing a $22 million shortfall for the 2025 fiscal school year," Monárrez said. "The inflation rate reimbursement was only one factor in this deficit, but it was most definitely the most significant."

And because 85 percent of Worcester's school budget goes towards employee salaries, the superintendent said "there's simply no other way around filling that $22 million shortfall except for layoffs." She said she is in the "painful process" of having to cut about 300 positions from a school system workforce that totals about 5,000 people.

"Those positions include classroom, teachers, administrators, non-instructional staff -- we're all feeling it. And I'll say that having spent three decades in education, including many years as a classroom teacher, this is one of the most challenging places to be right now. It truly breaks my heart to reduce these positions. All of the educators that we're having to let go are non-professional status teachers, which means they've been in our district less than three years. They're brand new to the education field, they're excited and eager to work with our youth, and we're saying right now we can't employ them, even though we want to keep them and our youth have already started to fall in love with them."

During the Senate's late-May budget debate, senators adopted a Sen. Jason Lewis amendment that would create a task force to look specifically at the calculation of the required local contribution for Ch. 70 education aid. But Lewis, Minority Leader Bruce Tarr and other senators who spoke said they feel it is time for another broad look at education financing in Massachusetts, beyond the foundation budget reforms made in the Student Opportunity Act, and expressed hope that the task force will start that conversation.

"I am proud of voting for the Student Opportunity Act, it was actually one of the first votes I took when I was elected to serve in this chamber. And yet, the Chapter 70 formula is not working for the communities I represent; not now, not once the Student Opportunity Act is fully phased in. It will not work," Sen. Joanne Comerford, who represents a clutch of mostly rural communities in Hampshire, Franklin and Worcester counties, said.

She added, "It's not working for my entire district. It's not working for two-thirds of the minimum aid schools that cannot pay their bills. They will not survive. And I am not being hyperbolic, although I think my friends here know that I can tend toward hyperbole, this is a crisis in our commonwealth."

Comerford focused mostly on how small town governments in rural areas with flat population growth must fund higher percentages of their school budgets from a stagnant tax base. She referenced "the brutality of minimum aid."

She said Northampton was projected to receive $8.04 million in Chapter 70 funding this year, a less than 9 percent increase over the $7.38 million in Chapter 70 funding the school system there got 15 years ago. And in Amherst, the latest estimate of $6.31 million is hardly changed from the $6.27 million funding level of 15 years ago, she said.

"A 9 percent increase over 15 years for Northampton, a 1 percent increase over 15 years for Amherst, coupled with inflation, equals massive cuts in our districts," the senator said. "We cut teachers in Western Massachusetts 10 at a time and we don't even think about it."