Education funding needs to grow in state budget

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From The Beacon, February 2017
Late last month, Gov. Charlie Baker submitted a $40.5 billion fiscal 2018 state budget plan with the Legislature, proposing a spending blueprint that would increase overall state expenditures by 4.3 percent.
The good news is that his budget includes a $39.9 million increase in unrestricted municipal aid, fulfilling the revenue-sharing commitment that the Baker-Polito Administration made to cities and towns. This means that Unrestricted General Government Aid would grow by 3.9 percent, the same rate as state tax revenues. These funds are critically important to municipalities, as communities are still recovering from the deep cuts imposed during the recent recession.
The more challenging news is that the governor’s proposed fiscal 2018 budget (known as House 1) offers a below-inflation increase for Chapter 70 school aid of 2 percent, or just $91.4 million, and level-funds a number of essential education accounts that are critical to ensuring that our public schools have adequate resources. These flat-lined programs include funding for charter school reimbursements, special education programs, and school transportation. Seventy-four percent of all cities, towns and school districts would only receive increases of $20 per student, and many of these communities would face drastic budget cuts due to growing assessments to pay for charter schools.
Unless the Legislature steps in to restore necessary education funding, communities across the state will be forced to decrease the quality of their K-12 school programs.
Here are four ways the state budget needs to step up its investment in educating schoolchildren:
Chapter 70 school aid: The proposed Chapter 70 increase is significantly smaller than in recent years. Under House 1, 237 cities, towns and school districts would only receive an increase of $20 per student. This below-inflation increase would force almost all communities to reduce school programs or further shift funds from the municipal side of the budget.
The MMA’s position calls for minimum aid of at least $100 per student, not the $20 amount offered. We also strongly support implementation of all of the recommendations of the Foundation Budget Review Commission to update the Chapter 70 “foundation budget” minimum spending standards for special education and employee health insurance, and to add to the spending standard a measure of recognition for the cost of services for low-income, English Language Learner (ELL) and other students who would benefit from more intensive services. The commission recommended phasing in the changes over a four-year period, a position the MMA supports as well.
The governor’s budget includes a partial reflection of one of these recommendations, which is to update the foundation budget to reflect the cost of employee health insurance, but this $66 million adjustment to the multi-billion-dollar foundation budget is not enough to increase aid to more than a handful of districts. A full commitment to fixing the foundation budget’s flaws is what is called for.
The financial consequences of the obsolete Chapter 70 formula are enormous. In fiscal 2016 (the most recent year with complete data), cities, towns and regional school districts spent $12.2 billion in actual net school spending under Chapter 70, which is $1.9 billion (almost 20 percent) more than the required amount in the outdated foundation budget. The state’s contribution totaled $4.4 billion, or only 36 percent of actual spending. The increasing reliance on the property tax and other municipal revenues to fund schools is not sustainable.
Unless the Foundation Budget Review Commission’s recommended corrections to the Chapter 70 formula are implemented, and minimum aid is increased to $100 per student, it is inevitable that the quality of public education here in Massachusetts will decline, undermining the state’s knowledge-based economy.
Charter school reimbursements: The budget would level-fund charter school reimbursements at $80.5 million, well below the amount necessary to fund the statutory formula that is supposed to offset a portion of the Chapter 70 aid that communities are required to transfer to charter schools. Level-funding this account would lead to the continued and growing diversion of Chapter 70 funds away from municipally operated school districts (which educate 96 percent of all schoolchildren).
Statewide, communities are transferring 10 percent of all Chapter 70 money directly to charter schools, even though only 4 percent of students attend them. The governor’s budget would increase this imbalance, and place an extraordinary financial strain on many communities. Charter school reimbursements are already $54 million below the funding level called for in state law, and this shortfall would grow significantly in fiscal 2018 under the governor’s budget plan because communities would be forced to increase their payments to charter schools by $60 million, creating a shortfall of more than $100 million. This dysfunction in charter school financing has reached a breaking point, and solving this breakdown must be a major priority during the budget debate.
Special Education Circuit Breaker: The governor’s budget would level-fund the Special Education Circuit Breaker program at $277 million. Because special education costs are expected to rise in fiscal 2018, this means that House 1 would likely underfund reimbursements by as much as $10 million. This is a vital account that every city, town and school district relies on to fund state-mandated services. The Legislature has intended to fully fund the program for the past five years, and the MMA will again be asking lawmakers to ensure full funding in fiscal 2018.
School transportation reimbursements: House 1 would level-fund regional transportation reimbursements by $61 million. This would be a hardship for virtually all communities in regional districts, because transportation costs increase every year. If funding stays flat and costs rise, the result feels and acts like a funding cut. Of course, communities are supposed to receive 100 percent reimbursement, but that is not what has been appropriated. Fortunately, the Legislature has consistently added funds to this program in most years, and town and city leaders will be asking for increases again.
This is a critical time for cities, towns and local taxpayers. Massachusetts is starting to find some new vigor in its economy, but it is clear that the Massachusetts economy will only reach its full potential for statewide growth and job creation if all 351 cities and towns have the resources to adequately serve the residents, businesses and schoolchildren of the Commonwealth. That’s why these investments in municipal and education services are so important.