Last Saturday, February 2nd, the Melrose School Committee engaged in an excellent discussion of school financing with Tracy Novick, Field Director for the Massachusetts Association of School Committees. Notes below, and edits and errors all mine!
History of
education in Massachusetts
Beginning in the 1600’s with the interest in encouraging men
to enter the ministry, colony leaders instituted educational and tax laws at
the higher and lower levels, incorporating the philosophy that what was good
for the individual was also good for the community. During the Revolutionary
War, there were additional structures put in place supporting education
addressing the underlying question: “how do we continue to have a democratic
government in the future?” The concept reflected “spreading the opportunities,”
in that it doesn’t matter how much money a citizen has or where in the state
the individual lives, education is a must. Funding remained primarily driven by
property taxes. In the 1980’s, there was recognition that the local capacity to
fund education was insufficient, and a lawsuit and subsequent legislation resulted
in the Education Reform Act of 1993, which drove the school funding formula,
MCAS (for accountability of dollars spent), etc. Many other states have used
the Massachusetts model to implement similar types of funding formulas since
then.
Foundation Budget
When considering how to divide educational monies for
communities based on the Ed. Reform Act, leaders focused on ensuring “a fair
and adequate minimum.” They asked: “what do you need?” and a list was developed
from those responses (which remains in the calculation today). They then asked:
“what kinds of students do we have?” Their
premise was to be inclusive of all needs while being fiscally responsible,
which is why, for example, the special education calculation is based on a
straight percentage of 3.75% rather than an exact amount based on a district’s
number of students in that category. This funding approach is why the
Foundation Budget formula is being challenged at this time: it isn’t based on
the realities of educational need.
Municipal Wealth
Formula
This formula works to answer the question: “who will pay for
a district’s education?” with the presumption that it is a shared
responsibility of local communities and the state. Leaders then asked: “what
kind of contribution can a city or town make to its budget?” The resulting
answer became the Effort Goal, which calculates the wealth available to the community
that can be contributed by citizens (based on both property value and income).
It presumes that no community should be responsible for more than 82.5% of
their foundation budget. The State expects districts to pay for what they can
afford.
Cherry Sheets
Originally printed on cherry colored paper (but no more),
the data in these charts reflects how much money (less assessments) the state
will provide cities and towns for the coming year in a variety of categories,
including education aid that’s based on the Foundation Budget calculation. (The
Department of Revenue’s Division of Local Services provides significant local
information.)
State
Reimbursements (most impactful)
Charter School: tuition is deducted off the top of what the
state provides from the Cherry Sheet calculation because those students are counted
in Ch. 70 aid. There is some reimbursement but not close to the cost over time.
The argument has been that “the money follows the child” since the district is
not actually educating him/her, but the calculation amount per pupil is
different (i.e. what Melrose is funding per pupil in total is significantly
less than what it’s assessed per pupil for Charter students (and local Charter
students require fewer overall special education and/or English Language
services.)
Circuit Breaker: designed to lessen the financial hardship
of providing necessary but very expensive special education services, it is a
quarterly reimbursement (i.e. tuitions have already been paid out). The
calculation is based on a percentage of the difference (plus a multiplier)
between average per pupil cost across the state and what it actually costs to
educate a qualifying special education student in the district. The
reimbursement percentage is set by the legislature in the budget process and
changes from year to year. It is usually one of the first decreases if there are
mid-year state budget cuts, which is why districts generally budget
conservatively on this line item.
Grants
METCO: Amounts are tied to students and are primarily for
transportation and tuition.
Title I, IIA, III (federal): have very specific uses and
supplement vs. supplant (e.g. extra – not what you’re supposed to be doing
anyway). Title I is tied to student counts, so the choice by the state to use
the economically disadvantaged vs. low income definition of need negatively
impacts Melrose’s incoming funds.
USDA (federal): nutrition funding. Local districts have
revolving funds for nutrition and can only use those monies for expenses in the
same category.
(The key point about grants: they have conditions so they’re
not going to solve budget problems.)
Local Authority
Every community decides what their needs are and how to
address them, but must fund them to a state required amount per district called
Net School Spending (NSS). In FY17, Melrose spent 4% over Net School Spending,
a vastly lower amount than neighboring/like communities. Since school districts
are people based, budget dollars overwhelmingly fall in the categories of
teachers and benefits (ref: DESE RADAR Report). Health insurance is a
significant expense and is required to be funded, but, like special education
costs, state contributions have not kept pace requiring districts to channel
more dollars to that line item resulting in less money for teachers,
instructional materials, and other direct educational costs.
Current situation
The Governor’s budget was released in late January and would
provide only minimal relief to Melrose. The House budget is released in March,
with the Senate budget following in May. The Conference Committee (consisting of
members of both the House and Senate) then meets and agrees on a final budget
that the Governor can sign. The law requires a state budget by July 1st
for the coming year.
Committee Discussion
The average state percentage that local districts contribute
over NSS is 127% compared with 4% for Melrose. If the state provides additional
money to get closer to financial contribution targets, then they require
localities to spend more too. The state expects each community to define what education
should look like there, and contribute its fair share of what that would
require.
