Beacon Hill must commit to education funding partnership

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From The Beacon, November 2014

Over the past year, Massachusetts citizens have become increasingly concerned about the quality of public education, especially at the K-12 level. This has been demonstrated in public opinion surveys showing that nearly 70 percent of residents are worried about the overall quality of their public schools.

This is not surprising, given the fact that cities and towns have been facing greater fiscal pressure and diminishing resources for several years now. Municipal aid remains nearly $400 million below fiscal 2008 levels, and this year’s state budget provides the smallest education aid increase in more than 20 years. Each year, communities are devoting more and more of their property tax revenues to offset inadequate state and federal assistance, but this cannot continue, given the limits imposed by Proposition 2½ and the rising cost of providing many other essential municipal services.

The challenge is clear, and so is the solution: Massachusetts must update and modernize the Chapter 70 school finance law to ensure that all students have access to high-quality and adequately funded public education programs, and make sure that state and local governments share fairly and equally in the cost as we move forward.

The landmark 1993 Education Reform Act was intended to provide Massachusetts with a school funding framework to guarantee that all students have access to an adequate education as required by the Massachusetts Constitution. The reform law was enacted in the same year that the Massachusetts Supreme Judicial Court ruled that it was the constitutional responsibility of state government to ensure adequate educational opportunities for all schoolchildren.

The law established a “foundation budget” structure that set minimum spending levels for every school district, using a complex formula designed to determine the spending that was necessary to ensure an adequate education for every student. The components of this formula have changed very little over the past 21 years, however, and the framework has become increasingly obsolete and insufficient. The foundation budget structure needs a comprehensive review and modernization to reflect the many changes to public education that have taken place since 1993, including the costs related to special education, employee benefits, and new health and safety mandates.

The clearest indicator that Chapter 70 aid and the foundation budget framework are insufficient can be found in the annual school budgets adopted by nearly every city, town and school district in the state. Over the past decade, cities and towns have appropriated a larger and larger amount from local property taxes to fund school programs, far above the required “net school spending” level called for under the law. This reflects the inadequacy of the foundation budget.

Local leaders have been forced to increase property taxes and reduce spending on other important municipal services because the state education funding framework is obsolete and insufficient. In fiscal 2014, local government school spending was nearly $1.7 billion above what is required, more than double the fiscal 2004 above-required amount. The estimate for fiscal 2015 is that communities will divert even more from the property tax to fund their schools, because the foundation budget framework is obsolete.

The Massachusetts Municipal Association strongly supports the mission of the Foundation Budget Review Commission, which was reauthorized as part of the fiscal 2015 general appropriations act. The FBRC is charged with reviewing the foundation budget framework and recommending the necessary changes to ensure that the school finance law is modernized to reflect the needs of today and tomorrow.

We ask that the next governor and Legislature make the work of this commission a priority and commit to a comprehensive update of Chapter 70 and the foundation budget structure. Some early indications are that some state leaders may want to take a narrower view of the commission’s work and focus only on modest adjustments to the formula, but that would be inadvisable and shortsighted.

Proof that the Chapter 70 program is seriously outdated is the increasing number of cities, towns and regional schools that have become “minimum aid” districts and would receive no new aid or could even face school aid reductions under a strict implementation of the Chapter 70 formula. In fiscal 2015, 201 of 321 operating districts (63 percent) received minimum aid increases of just $25 per student, a miniscule amount compared to the actual funding needed to maintain current school programming. Over the past six years, minimum aid has been a regular feature of Chapter 70 for a majority of the state’s school districts.

Local schools cannot maintain quality in a system that relies on minimum state aid, because the only way that minimum aid districts can maintain their existing school services is to rely on a greater share of the local property tax, or reductions in municipal services so that dollars can be shifted over.

While a great part of the education funding problem is the obsolete foundation budget framework, an important contributing factor is the state policy that sets the statewide local contribution (mainly from the property tax) at 59 percent of the statewide foundation budget, with the remaining 41 percent of the foundation budget paid for by Chapter 70 school aid. First, as noted above, the foundation budget is an inadequate reflection of the actual cost of running quality public schools, by at least $2 billion. Second, this uneven division of funding responsibilities places a greater burden on local schools and municipal budgets each year.

The Massachusetts Municipal Association calls on the next governor and Legislature to phase in a new 50-50 state-local share to fund the foundation budget framework. This would provide adequate Chapter 70 support for schools, alleviate the all-too-high reliance on the property tax, and ensure that the task of funding and achieving high quality public education is indeed a true state-local partnership.