School Finance: Chapter 70 Program

MEMORANDUM

As you know, Governor Patrick and the administration have prioritized public education funding throughout this difficult budget year. In response to further declines in revenue through the month of April, the FY09 budget shortfall increased to nearly another $1 billion. To address this deficit, today the Governor put forth legislation that will ensure every district continues to receive the expected amount of FY09 Chapter 70 aid through a combination of state and federal dollars. The Governor's plan commits $412 million of federal stimulus funding to offset a $412 million reduction in the remaining FY09 Chapter 70 appropriation.

To be clear, all districts will be held harmless under the Governor's proposal.

Municipalities and regional school districts will see their June 30 state aid payments significantly reduced under this plan, but will receive offsetting federal funds in the form of FY09 grants from the State Fiscal Stabilization Fund (SFSF) program. Of the $412 million, $322 million will come from the 81.8 percent portion of the SFSF funds which are earmarked for education, and the remaining $90 million will come from the 18.2 percent portion of the SFSF funds available for general government purposes.

Next week we will post the following documents on the ESE ARRA webpage:

• A chart showing the amount of each district's Chapter 70 reduction under this plan, which also represents the amount of FY09 SFSF funds that the district will receive.

• A streamlined application form for districts to complete and submit in order to receive their FY09 SFSF grant. To help us expedite the distribution of these funds, please return these applications by May 22.

• A joint directive from the Department of Revenue and the Department of Elementary and Secondary Education regarding accounting and budget actions that must be taken at the municipal and district levels to implement these changes.

In addition to this $412 million in new FY09 SFSF grants, the Governor is continuing to reserve $168 million for the previously announced FY10 SFSF grants, to ensure that all districts receive foundation funding in FY10.

If you need additional information, please contact Associate Commissioner Jeff Wulfson at 781-338-6500 or jwulfson@doe.mass.edu.