Governor Healey FY25 budget recommendation

On Monday night, I did a presentation on this year's state budget for a group of western Mass school committee members and superintendents. My 48 hours ahead forecast looked like this:

What do we know about FY25?
The good news:
Governor Healey has committed to funding full funding of Chapter 70including year of implementation of the Student Opportunity Act.
The less great news:
The revenue picture has been grim, which may well tighten other accounts outside of Chapter 70.
The inflation rate in Chapter 70 is just over 1%

On Wednesday, Governor Healey shared her FY25 budget recommendation. The Chapter 70 preliminary spreadsheets are here. And the preliminary cherry sheet estimates are here.

I plan to do a spreadsheet, as I have in past years, of the K-12 accounts. I do want to cover a few bigger things here, though. 

First, we don't tend to talk a lot about the revenue side, except possibly from the Fair Share amendment, but let's note that there are some things being done to make the revenue happen. The way we're getting the schools funded is in part funding from previous years; as reported by State House News Service in WBUR:

The budget would fully fund another year of the K-12 education funding law known as Student Opportunity Act in part by drawing down $300 million from an investment fund specially designed to cover the costs of the law. Beacon Hill built up that fund in past years when the state was more flush with cash, and the withdrawal would leave about $200 million for future use.

Healey's plan would also pull $265 million from a similar early education and care affordability fund, fully depleting its balance.

There are other places in the budget that this is also happening; those happen to be Chapter 70 and early ed. 
I want to be fair in noting that this is exactly why we have such a fund. The thing about one time funding, though, is that it's spent once and it's gone. I think we need to consider what happens next year or the year after that. 

The other big piece on the Chapter 70 aid, as I mentioned on Monday, is the inflation rate. It's 1.35% for all accounts save health insurance. I think it's possible--and I think I've been guilty of this myself--that in the implementation of the Student Opportunity Act, we may have lost sight a bit of the fundamental principle of the state school funding formula: it's driven by two things every year, which are enrollment and inflation. DESE reports: 

Statewide, foundation enrollment increased from 905,106 in FY2024 to 905,331 in FY2025, an increase of 225 students. Foundation enrollment decreased for 165 districts, while 148 districts experienced enrollment increases.

If you're in a district with falling enrollment and not a high rate of low income students (thus meaning you're not getting the driving push of the SOA increases in low income rates), a 1.35% inflation rate isn't going to be enough to push a significant increase. It's certainly made it harder for districts still in hold harmless to get back out, particularly on top of the $60 per pupil minimums last year. 

Even the Gateways--and yes, I'm including Worcester in this--aren't seeing the same increases we have in past years, when the inflation rate was being driven by the pandemic spending of previous quarters.  

And no one's budget is increasing by 1.35%. 

That's big picture. More to come. 

Here's the updated this week inflation history.