Auditor finds $17M state funding shortfall for regional schools

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On Oct. 18, State Auditor Suzanne Bump released a study making recommendations to modernize laws and regulations within the regional school district structure – and calling on the state to fulfill its commitments to several reimbursement programs.
 
Among the recommendations are that the state should “fully fund its commitment to reimburse 100 percent of regional transportation expenses, offer stipends to encourage efficiencies to reduce transportation costs, and allow the use of regional transportation authorities to provide regional school district transportation.”
 
State law entitles regional school districts to full reimbursement for school transportation expenses, but this promise is subject to annual appropriation. In fiscal 2016, the reimbursement rate from the state was just 73 percent, the auditor reported, creating a collective shortfall of $14.4 million in this category for regional districts.
 
“The resulting uncertainty from year to year about the level of transportation cost reimbursement makes budget planning difficult” for regional school districts, the report states.
 
The report also concluded that the state’s underfunding of the statutory charter school reimbursement formula created a collective shortfall of $1.88 million for regional districts in fiscal 2016.
 
In addition, the state in fiscal 2016 underfunded reimbursements to regional districts under the federal McKinney-Vento Homeless Assistance Act by more than $686,000.
 
The report concluded that “statutory shortfalls” affecting regional school districts totaled nearly $17 million in fiscal 2016.
 
State law provides towns with options to regionalize public education across municipal boundaries, with the goal of reducing administrative costs. Under this arrangement, the towns in a regional school district establish a school committee with proportional representation from each member town. Budgets for these districts must be approved by town meetings for each town in the district.
 
The state has 58 academic regional school districts, which enroll approximately 107,000 students from more than 170 communities.
 
“Ensuring student success in our regional school districts will … demand collaboration between state and local educational officials, and lawmakers,” Bump said in a statement.
 
Bump is calling on the state to modernize its funding structure for regional schools by doing the following:
 
• Developing deeper incentives to encourage communities to regionalize, noting that the current incentives do not provide enough enticement for schools to give up some measure of local control
• Offering planning grants to explore the combination of existing regional districts into larger groupings
• Ensuring greater transparency from the Massachusetts School Building Authority on its decision-making process for districts that close school facilities
 
The study points to demographic changes, long-standing structural challenges, and funding shortfalls as key factors that de-incentivize communities from moving forward with new or enhanced school regionalization.
 
During the decade ending with the 2015-16 school year, regional school enrollment declined by 10.5 percent, while statewide public school enrollment declined by just 1.6 percent, according to the report. Overhead costs, however, continue to rise, and state funding is inadequate for many of these districts.
 
The Auditor’s Division of Local Mandates produced the study.
 
• View the report: Supporting Student and Community Success: Updating the Structure and Finance of Massachusetts Regional School Districts.