School Finance: Chapter 70 Program

FY10 Preliminary Chapter 70 Aid and Net School Spending Requirements

Pursuant to section 6 of chapter 70 of the General Laws, the Commissioner of Elementary and Secondary Education is issuing the preliminary estimates of Chapter 70 school aid and net school spending requirements for FY10. These estimates are based on House 1, Governor Patrick's proposed state budget for the coming fiscal year. In an extremely difficult budget year, when other local aid is experiencing deep cuts, House 1 level-funds each district's Chapter 70 aid at its FY09 amount.

Here are some of the key points about the proposal.

• All foundation budget factors have been increased by 4.5%. While the federal government's price deflator index for state and local government expenditures was 6.75%, Chapter 70 statutory language caps the amount at 4.5%.

• FY10 continues the phase-in of the aggregate wealth model for calculating required local contributions. Each municipality's target contribution has been updated using 2008 property values and 2006 personal income data. For municipalities with required contributions above their targets, the requirement is reduced by 25% of the gap (compared to 33% last year). The lower percentage may stretch out the phase-in period beyond FY11, but it does continue progress towards the effort goal.

• For communities making less than their target level of effort, a one-time adjustment raises the local spending requirement to the lesser of their target contributions or 95% of their actual local spending for schools in FY08.

• For each district Chapter 70 aid is set at the amount it received last year.

• 153 operating districts have FY10 net school spending requirements that fall short of their foundation budgets, by a total of $168 million. The federal economic stimulus bill currently under discussion in Washington may contain some supplemental funding to assist local schools during these difficult economic times. We are hoping that at least some of the funds will be available to help support the foundation budget targets.

These are preliminary estimates subject to change as the House and Senate deliberate on the budget. Our purpose in providing these estimates at this time is to assist cities and towns in their own budget preparations for FY10. We advise you to construct your local budgets with sufficient flexibility to accommodate the changes that typically occur in the state budget process. The Commissioner will issue the final, official school spending requirements as soon as the Governor and Legislature approve either the FY10 state budget or an earlier local aid resolution. Those final numbers will then match the FY10 cherry sheets to be issued by the Department of Revenue.

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: