Gov. Baker signs the Student Opportunity Act into law on Nov. 26.

Gov. Charlie Baker today signed a far-reaching school finance bill that updates spending standards in the state’s landmark Chapter 70 school finance statute and will provide a projected increase of $1.4 billion in school aid over seven years.

The Student Opportunity Act was unanimously approved by the House and Senate on Nov. 20, just before the end of formal legislative sessions.

The law is expected to set the rules for Chapter 70 local contribution and school aid amounts to be included in the governor’s state budget recommendation for fiscal 2021, which is due to be filed by Jan. 22. A scheduled expansion of the special education circuit breaker program to include student transportation expenses and a commitment to fully fund charter school mitigation payments over a three-year period are also expected to be included in his fiscal 2021 budget plan.

The law makes policy changes designed to focus on how new funding can be used to improve student outcomes and close opportunity gaps, particularly for low-income students.

The law establishes a Twenty-First Century Education Trust Fund to provide flexible funding to districts and schools working to reduce achievement disparities and to improve opportunities for all students. It also requires the commissioner of elementary and secondary education to set statewide targets for reducing disparities, and it requires school districts to set local targets and develop three-year plans to meet targets. Following a review by the commissioner, local districts would be required to amend any plan deemed to be nonconforming.

The law updates factors in the Chapter 70 foundation budget spending standard consistent with the 2015 recommendations of the Foundation Budget Review Commission. Over a seven-year period, the legislation will update foundation factors that clearly undercounted basic education costs, including in the areas of special education, employee health insurance and educational programs for low-income and English learner students. As a member of the Foundation Budget Review Commission, the MMA has long supported these updates.

The law establishes in Chapter 70 a $30 per student floor for the minimum new annual aid increase.

The changes to the foundation budget will affect Chapter 70 education aid and local contribution amounts across the state. The impact of the law will vary across different types of districts, resulting in substantial aid increases for some, while a number of districts will remain in the minimum aid category.

The changes will also affect the minimum municipal contribution in some cities and towns, and could have an impact on assessments used to pay tuition to charter schools.

The law will keep work moving on two important school finance issues that were not resolved in time for the Student Opportunity Act. It directs the Department of Revenue and the Department of Elementary and Secondary Education to analyze the method of determining required local contributions in the Chapter 70 formula for the purpose of improving equity, predictability and accuracy with a focus on the impact of the property tax levy limit and levy ceiling rules. And the law establishes a Rural Schools Commission to investigate the challenges facing rural and regional school districts with low and declining enrollment.

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