Monday, July 3, 2017

Why you maybe should still be worried about Chapter 70

You've no doubt heard the quotes: "Chapter 70 is the third rail;" "Chapter 70 is sacrosanct;" "The Legislature would never touch Chapter 70."
And if you've spent any time around this blog, you know that the state has a constitutional obligation around the funding of public education, thus protecting K-12 school funding.
That's protection only goes so far, however, and when now-Acting Commissioner Wulfson warns us not once, not twice, but three times that we should keep a wary eye on Chapter 70 funding, I believe him.

So this holiday week as we're still awaiting an FY18 budget (with the fiscal year having ended at midnight on Friday), here's how we could still see cuts in Chapter 70 school aid.

On the spreadsheet issued by DESE, I'm looking at the tab marked "summary" which is here:
(See the note up on top that says "Preliminary"? DESE issues this twice each year: once for the Governor's budget, and once for the final, signed-sealed-and-delivered state budget. We don't have the latter, so these numbers are still from the former.)

We could use lots of communities for this example, but for this round, let's look at Leominster, which has been in the news in central Mass lately. Leominster has a student enrollment of just over 6100 students in PreK through 12. They have a foundation budget of $69.4M for FY18. Leominster generally hovers just over required spending (and much of this year's debate has been over the mayor's assertion that he would fund the schools at, not over, net school spending for FY18). 

The summary page for Leominster looks like this: 

(as always, if you click on images, they'll get larger.)
A quick glance in the upper right hand corner of that sheet may give you a hint where this is going: like many districts in Massachusetts, Leominster Public Schools' enrollment is declining (down 99 students from the previous year). As the foundation budget is a student-driven formula, that means the foundation budget is also declining (down $81K from the previous year).

What does that mean for state aid? Take a look at the left column of the sheet:

From the calculation of the municipal wealth formula, Leominster is charged in FY18 with carrying $27.8M of its foundation budget, leaving $41.6M for the state to pick up. 

For FY17, Leominster received $43.8M in Ch. 70 aid.

You can imagine the outcry if Leominster--and many other districts--heard that they were going to get over $2M LESS in state aid than they did the year before. 
Thus two principles--neither of them constitutionally mandated--kick in: hold harmless and minimum aid.

"Hold harmless" straightforwardly is that your aid is "held harmless" or not hurt by the change in the calculation. In practice, that means that the district does not see an aid cut, even if one is warranted by the calculation.

"Minimum aid" comes to us courtesy of the elected branches: 
Remember, we're still working here on the Governor's budget; the Legislative houses both set this at $30/pupil.
Minimum aid means that for every student in your system, you will get an increase of at least that dollar amount. The Governor's budget (which this spreadsheet is based from) set this at $20/pupil; the Legislative branches both set it at $30/pupil.

If you're a district with increasing enrollment and a correspondingly increasing foundation budget, you're seeing more than that per pupil increase already (as the per pupil increases in foundation are significantly more than that) in your constitutionally-mandated state aid.

However, neither hold harmless or minimum aid are constitutionally mandated. 

Last year, about $450M of the full Chapter 70 budget was hold harmless and minimum aid. This year, the Governor's $20 per pupil increase alone is $11M.

Am I saying that the conference committee is definitely going to hit this section of the budget? No. I don't have any sources on that.
But they can. And if Jeff Wulfson is worried, I'm worried.


Anonymous said...

a person wrote to me : constitutionally we have to provide schooling but it is not in the constitution that we have to fund them (e.g., discussion of the Foundation Budget)....

Tracy Novick said...

Well, they're wrong, according to multiple SJC decisions.