Monday, November 28, 2016

Chapter 70 Funding: Lynn's Local Public School Funding Contribution

A common misconception is that public school districts in Massachusetts are entirely funded by local property taxes. In fact, since the Education Reform Act of 1993, public education in the state is financed through a combination of local revenue and state aid (as well as federal funding to a much lesser degree). Each year, the Massachusetts state legislature determines the amount of funding necessary for each district to adequately educate its public school population. This spending level, called the "foundation budget," is calculated via a funding formula (Chapter 70) which takes a number of factors into consideration including the number special education and economically disadvantaged students as well as vocational education costs among other categories. Additionally, there are some assumptions built into the foundation budget rates such as assumed class sizes (in FY17, it was 22 for elementary, 25 for junior/middle and 17 for high school). The goal of the Chapter 70 funding formula is to ensure that every district has sufficient resources to meet its foundation spending budget through an "equitable combination of local property taxes and state aid." The foundation budget covers all of the students that a district is financially responsible for including out of district placements and charter school students.

For FY17, Lynn's foundation budget was determined to be $192,172,423 based on a student population 16,463; this amounts to a per pupil expenditure of $11,673. As previously mentioned, all of that funding, however, is not expected to come solely from municipal revenue (i.e. property taxes). The state provides Chapter 70 funding in order to make up the difference between a city or town's spending ability based on incomes and property values and the foundation budget [in other words: Foundation Budget - Local Spending Ability = Ch. 70 State Aid]. In Lynn's case, the local contribution for this fiscal year was calculated at $46,018,423 or 23.95% of the foundation budget; the remaining 76.05% was provided by Ch. 70 state aid. So while the amount amount that Lynn as a municipality has been required to contribute to public education has steadily increased since FY07:

The percentage of the total foundation budget figure determined by the state has remained consistently between 23 and 25%:

Again, the amount that cities or towns in Massachusetts are expected to contribute to public education varies depending on local property tax and other sources of municipal revenue. The town of Wellesley for example, has a student population listed as 5,095 in FY17 and contributed 83.27% of its foundation budget compared to Lynn's 23.95%. Lawrence, on the other hand, contributed 4.74% to its foundation in FY17. It should also be noted that the Ch. 70 funding formula does not prevent a district from spending more than its local contribution of foundation budget if additional local funds exist. In FY15, for example, Cambridge spent 2.25 its foundation budget total including amounts derived from state funding. While this does leave room for inequality between wealthier districts and poorer districts, the Chapter 70 funding formula is an attempt to create a more equitable public school funding system. As the formula was initially created in 1993 before the implementation of the MCAS test as well as the widespread use of technology in the classroom, there have been calls to revise the formula so that it accurately reflects the costs of educating students in the 21st century most notably through the Foundation Budget Review Commission's 2015 report. That and issues with the accounting of certain student populations means that while Massachusetts intends to have a fair funding system, there is still a considerable gap between some cities and towns that deems it necessary to update and revise the way that the state funds its public schools.
For more information on Chapter 70 funding