School Finance: Chapter 70 Program

FY09 Chapter 70 Aid and Net School Spending Requirements

July 14, 2008

On July 13th Governor Patrick signed the FY09 state budget which authorizes an increase of $223.2 million in Chapter 70 education aid to Massachusetts school districts. The numbers are exactly the same as those published in January as set forth in the Governor's House 2 proposal, and confirmed by the legislature in this spring's joint resolution and final conference committee report.

Here are highlights of the FY09 Chapter 70 program:

• All foundation budget factors have been increased by 5.18%, using the federal government's price deflator index for state and local government expenditures. Budget language overrides the statutory cap of 4.5%.

• FY09 is the third year of the planned five-year phase-in of the aggregate wealth model for calculating required local contributions. Each municipality's target contribution has been updated using 2006 property values and 2005 personal income data. For municipalities with required contributions above their targets, the requirement is reduced by 33% of the gap (compared to 25% last year).

• Foundation aid is fully funded.

• Down-payment aid is calculated using 33 percent of the target, compared to 30% last year.

• Growth aid provides aid to districts whose foundation budgets are growing due to inflation or enrollment.

• Minimum aid guarantees every district a minimum increase of at least $50 per pupil.

The Department of Elementary and Secondary Education has prepared the following materials to assist local officials in understanding the state aid calculations and local contribution requirements in this year's Chapter 70 program:

• Summary chart showing foundation enrollment, foundation budget, Chapter 70 aid, and required local contributions for each school district.

• Summary chart for regional school districts, showing foundation enrollment and required local contribution for each member of the district.

• White paper describing the major components of the formula.

• Complete formula spreadsheet showing the detailed calculations for each municipality and district.

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