Archived Information

School Finance: Chapter 70 Program

Final Chapter 70 Aid and Net School Spending Requirements for FY04

August 22, 2003

On June 30^th, Governor Romney signed the FY04 state budget. A supplemental budget signed on August 21^st made minor changes to the aid for three districts whose enrollment corrections were reported too late to be reflected in the June calculations. The budget includes a $148 million or 4.5 percent net decrease in Chapter 70 aid for K-12 school districts. Click the following links for summary charts showing the final Chapter 70 aid, required local contributions, and net school spending requirements for school districts and regional school members. Detailed reports describing how this year's aid and contributions were calculated are available in an Excel spreadsheet .

Summary

• Each district's Chapter 70 aid is initially reduced by 20 percent from its FY03 amount. If that reduced level is insufficient to maintain the district's spending at foundation budget, foundation aid fills the gap. No district's spending requirement is allowed to fall below its foundation budget.

• 159 of 328 operating districts receive no foundation aid and therefore experience the full 20 percent reduction.

• Minimum contributions are determined by applying FY04 municipal revenue growth factors to FY03 preliminary contributions, and reducing the resulting amounts by half of the amount of eligible FY04 excess debt. Because of the impact of cuts to the Additional Assistance and Lottery state aid accounts, 41 of 351 municipalities have negative growth factors.

• Foundation budgets rise an average of 1.78 percent. They reflect an annual inflation rate of 1.34 percent. Statewide foundation enrollment decreases from 964,154 to 963,771, a decline of 383 pupils. Wage adjustment factors are not allowed to fall below 100 percent.

• The spending requirement for professional development activities has been eliminated for FY04.

• The net school spending requirement remains in effect, as does the requirement that districts expend at least half of their combined regular and extraordinary maintenance foundation budget amounts upon those function.

• Section 3 of the state budget provides regional school districts authority to operate on a 1/12^th budget for July and for August as well, if they have not finalized their FY04 budget. For regional districts that relied upon the Governor's House 1 Chapter 70 proposal to calculate their FY04 assessments, a second provision of Section 3 stipulates that they must recalculate them using final minimum contributions. Member communities then have 45 days in which to convene a special town meeting to vote upon the revised assessments. If the 45 day period is allowed to expire, the revised amount will be considered approved. The Department of Revenue has described this process in bulletin 2003-14B posted on its web site.

Questions about the Chapter 70 program should be addressed to either: