What You Don't Know About Hold Harmless Could Hurt You

Understanding Hold Harmless: What It Means for Franklin

The financial future of Franklin is deeply tied to a provision known as "hold harmless," a part of Massachusetts' Chapter 70 education funding formula. Since Fiscal Year 2017 (FY2017), Franklin has been classified as a hold harmless district. Understanding what this means and how it impacts our community is crucial as we head into Joint Budget Subcommittee Listening Sessions and Legislative Forums in the coming weeks.

What Is Hold Harmless?

The hold harmless provision ensures that districts do not receive less state aid than they did in previous years, even if student enrollment declines. While this protects districts from immediate financial loss, it also limits their ability to receive additional funding to meet rising costs.

In Franklin’s case, the town has been in a steady enrollment decline since 2011. Superintendent Sara Ahern has confirmed that Franklin entered hold harmless status in FY2017 and has remained there ever since. This means Franklin receives the minimum amount of state aid under the Chapter 70 formula.

As of FY2023, Franklin received $11.89 million in hold harmless funding, making it the second-largest hold harmless community in Massachusetts. This funding has been essential to maintaining school operations but has also created challenges for long-term planning.

Year-by-Year Hold Harmless Funding

Below is a breakdown of Franklin’s Chapter 70 and hold harmless funding over the years, showing how this provision has affected the town's financial stability:

• FY2017:
  • Chapter 70 Allocation: $68,835,293
  • Foundation Budget: $64,847,925
  • Hold Harmless Amount: $5,487,459
• FY2018:
  • Chapter 70 Allocation: $71,882,718
  • Foundation Budget: $66,730,878
  • Hold Harmless Amount: $7,034,793
• FY2019:
  • Chapter 70 Allocation: $75,354,105
  • Foundation Budget: $68,504,972
  • Hold Harmless Amount: $8,623,227
• FY2020:
  • Chapter 70 Allocation: $76,174,958
  • Foundation Budget: $69,568,684
  • Hold Harmless Amount: $7,669,986
• FY2021:
  • Chapter 70 Allocation: $78,398,099
  • Foundation Budget: $71,018,218
  • Hold Harmless Amount: $8,829,415
• FY2022:
  • Chapter 70 Allocation: $80,449,980
  • Foundation Budget: $73,686,081
  • Hold Harmless Amount: $9,431,762
• FY2023:
  • Chapter 70 Allocation: $85,577,186
  • Foundation Budget: $76,427,456
  • Hold Harmless Amount: $11,891,105

These figures highlight the increasing reliance on hold harmless funding as Franklin’s enrollment has continued to decline, making the town more dependent on local contributions to sustain operations.

To learn more visit DESE Chapter 70

The Financial Realities of Hold Harmless

The reliance on hold harmless has significant implications for Franklin’s finances:

● Declining Enrollment: Franklin’s student population has been shrinking since 2011, reducing the amount of aid the town would otherwise receive under the Chapter 70 formula.

● Stagnant State Aid: While operational costs—such as salaries, transportation, and special education—have increased, Franklin has not seen corresponding increases in state funding since FY2017.

● Local Tax Burden: With limited state support, the town has relied more heavily on local contributions to fund schools, resulting in a structural budget deficit.

Legislative Context
Franklin has hosted Legislative Forums since the 2017-2018 School Year to discuss critical issues like Chapter 70 funding and hold harmless. These forums have been a platform for residents to engage with elected officials and understand the town’s financial landscape. While the 2022 forum was canceled, the forums have provided valuable insights over the years.

Some notable quotes from past forums highlight the challenges Franklin faces as a hold harmless district:

2018 Legislative Forum
Senator Karen Spilka addressed the complexities of hold harmless funding, stating:

"When some communities lost significant funds due to changes [in the definition of economically disadvantaged students], $11 million was allocated to ‘hold them harmless’ to prevent immediate financial losses."

She also acknowledged the temporary nature of hold harmless:

"The goal is to phase in changes gradually while ensuring no community faces a drastic financial cliff."

Representative Jeffrey Roy emphasized equity in funding during the same forum:

"We’ve made progress, but there’s still more work to do to ensure that all districts—whether growing or declining—have the resources they need to provide a quality education."

2019 Legislative Forum
During this forum, Senator Spilka spoke about the importance of addressing funding inadequacies:

"The funding formula does not adequately reflect the true costs of education today. We must ensure that economically disadvantaged students, special education, and other high-cost areas are properly funded."

Representative Roy also highlighted Franklin’s reliance on hold harmless funding:

"Franklin has done well to manage its resources, but we need to think about the long-term implications of relying on a funding model that doesn’t keep pace with our schools’ needs."

Here’s a timeline of past and upcoming Legislative Forums:
To review past Legislative Forums and prepare for this year’s discussion, you can listen to recordings:
2017 - 2018: This school year marked Franklin’s first Legislative Forum on education funding and its new status as a hold harmless district. This forum was a pivotal moment for the community to understand the long-term financial implications of declining enrollment and stagnant state aid. It was also an opportunity for residents to engage with local and state leaders to question how Franklin’s leadership planned to manage the challenges of relying on hold harmless funds.
During this period, Franklin received $5.49 million in hold harmless funding, a figure that has grown significantly over the years. At the forum, Senator Karen Spilka underscored the temporary intent of hold harmless, stating, "The goal is to phase in changes gradually while ensuring no community faces a drastic financial cliff." Representative Jeffrey Roy added, "We’ve made progress, but there’s still more work to ensure all districts—whether growing or declining—have the resources they need to provide a quality education."

Residents were encouraged to consider whether local leadership had taken adequate steps to prepare for the town’s growing financial reliance on local taxes to fund education, despite early warnings about the limitations of hold harmless.

2018 - 2019: The community is deeply concerned about the current charter school funding formula and the "long-term hold harmless" clause because it underscores the growing gap between educational needs and available resources. As Franklin faces rising costs for special education, mental health services, and classroom support, the outdated funding model threatens to leave public schools underfunded. This could lead to higher taxes for local residents without improvements in educational quality or services. If the funding structure isn't adjusted, the community may feel frustrated by a system that continues to disproportionately support charter schools at the expense of the public schools that serve the majority of students.
Additionally, the "hold harmless" provision could prevent schools from addressing critical issues like mental health support and special education costs. Public schools might struggle to provide adequate resources, staff, and manageable class sizes, especially as costs rise. Families with children who need more support could feel their needs are being overlooked. The community would be upset if schools continue to operate under these financial constraints, leading to dissatisfaction with both the educational outcomes and the financial burden placed on local taxpayers.

(Some links to Franklin Matters archives)

• 2019 - 2020
• 2020 - 2021
• 2021 - 2022: Canceled
• 2022 - 2023
• 2023 - 2024: NOT RECORDED
• 2025: The next forum is scheduled for Monday, February 24, 2025, featuring Senator Becca Rausch and Representative Jeffrey Roy.

Preparing for the Legislative Forum
As Franklin faces these challenges, it is vital for residents to understand the implications of hold harmless and ask thoughtful questions about its future. Consider these questions as we approach the upcoming forum:

1. What steps can Franklin take to prepare for potential reductions in hold harmless funding?
2. How has the town used hold harmless funds over the years, and what has been the impact on schools and town services?

3. What reforms to the Chapter 70 formula could benefit communities like Franklin?

4. How can residents advocate for more equitable and sustainable funding solutions without necessarily taxing their residents?

This forum provides an opportunity for residents to learn more about the state’s funding system, engage with elected officials, and voice their concerns. With the future of hold harmless funding in question, it’s more important than ever for the community to stay informed and actively participate in these critical discussions.