Gov. Baker Signs Historic Overhaul to Education Funding Formula

For the past year teachers and school leaders in Revere have been actively lobbying the state legislature and Gov. Charlie Baker to begin taking steps to overhaul the state’s education funding formula to ensure equity for all students, especially those in low-income areas.

Because the state has not updated its education funding formula since 1993 to reflect districts’ real health insurance and special education costs, the amount of aid being provided to cover those costs is too small.

To compensate, many districts like Revere end up using money that would otherwise have supported core education programs—including Regular Ed. Teachers, Materials and Technology, and Professional Development. This also results in dramatic cuts in other areas of education.

The problem for low-income school districts is there is a growing equity gap between schools in Revere and schools in more affluent areas of the state. When faced with such shortfalls, high-wealth districts can often draw on additional, local revenue. Lower-wealth districts, however, are generally unable to do so and the consequence is that they spend less on resources that are critically important to the quality of education students receive.

Gov. Baker signed S. 2412, An Act Relative to Educational Opportunity for Students, which boosts investment in public schools by $1.5 billion annually when fully phased in over the next seven years.

The governor said these investments will ensure school districts have additional resources to provide high-quality education to all students by revamping the formula used by the state to calculate the cost of educating students by updating costs related to health care and special education, as well as educating English Language Learners and low-income students.

“I am pleased to sign legislation aimed at providing students across the Commonwealth with the opportunities and resources they need to succeed, including accountability measures that are essential to supporting underperforming schools,” said Gov. Baker. “This funding builds on the over half a billion dollars in new Chapter 70 funding our Administration has supported since taking office. We thank our partners in the Legislature for their hard work and we look forward to implementing this legislation for every child in every school district in Massachusetts.”

Known as The Student Opportunity Act, the legislation invests funding to support the needs of English learners and school districts that serve high concentrations of low-income students in order to help address persistent disparities in student achievement.

“Access to high-quality educational opportunities for all students has long been a priority for the House, and this historic $1.5 billion investment will go a long way in supporting the most vulnerable students of the Commonwealth,” said House Speaker Robert DeLeo. “The Student Opportunity Act is the result of a successful partnership spearheaded by our legislative chairs and members with the unwavering support of stakeholders from across the state. This legislation ensures Massachusetts’ students have the types of classrooms and supports they need and deserve.”

Under the legislation, school districts across the Commonwealth will benefit from updates to the existing funding formula, along with increased state investment in other vital education aid programs such as transportation, guidance and psychological services, school buildings and special education. 

The bill fully implements the recommendations of the Foundation Budget Review Commission (FBRC) to ensure that the school funding formula provides adequate and equitable funding to all districts across the state.

“This reestablishes the Legislature’s commitment to public education for every child, no matter their zip code or income level,” said Sen. Joseph Boncore. “By recalculating metrics, this bill invests in low-income communities and prioritizes the needs of the Commonwealth’s most vulnerable students. I am proud to support a bill that ensures our schools receive the Chapter 70 funding they need.”

The bill will provide an estimated $1.5 billion in new Chapter 70 aid over and above inflation when fully implemented over the next seven years.

“We are really excited about the hope that comes from this new legislation. And we are thankful to the law makers and the many advocates who made it happen,” said Revere School Superintendent Dianne Kelly. “The full scope of the impact this funding will have on the children of Revere will become clearer when the governor’s budget comes out next month; but we already know equity provisions built into so many of the line items will enable us to provide wrap around services and the kinds of learning experiences that will help our kids achieve at the highest levels. We look forward to working with the School Committee and others to identify out priority initiatives and plan for their implementation next fall.”

Key updates to the foundation budget that will benefit Revere are:

• Estimates school districts’ employee health-care costs using up to date health insurance trend data collected by the state’s Group Insurance Commission (GIC), and includes for the first time an amount for retiree health insurance costs.

• Increases special education enrollment and cost assumptions to more accurately reflect district enrollment and costs

• Increases funding for English learners (EL) that is differentiated by grade level to reflect the greater resources required to educate our older EL students.

• Addresses the needs of districts educating high concentrations of low-income students by:

• Providing additional funding based on the share of low-income students in each district; districts educating the largest percentage of low-income students will receive an additional increment equal to 100-percent of the base foundation;

• Returning the definition of low-income to 185-percent of the Federal Poverty Level, as opposed to the 133-percent level that has been used in recent years.

• Improves data collection and reporting, specifically around use of funding, by:

• Establishing a Data Advisory Commission to help improve the use of data at the state, district, and school levels to inform strategies that strengthen teaching, learning and resource allocation to ensure greater financial transparency, including tracking funding for low-income students and English learners.

• Provides additional state financial support to help public schools and communities deliver a high-quality education to students:

• Increases foundation rates for guidance and psychological services that will support expanded social–emotional supports and mental health services.

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