Archived Information

DOE Budget

Fiscal Year 1997 Budget Request

This year, the Board's budget request has been grouped into five areas to highlight the heavy emphasis on direct funding for school districts (see Attachment B). Of the $2,580,098,052 included in the FY'97 request, close to 94% of the funds will go to direct aid to local school districts. The Department's role in these areas is minimal, ensuring only that the funds are distributed fairly and efficiently according to statutory or regulatory formulas. Over half of the remaining funds (3.7% of total) go out to school districts as grants. Grants are distinct from direct aid in that they typically require school districts to compete or apply for the funds and imply a greater Department role in directing how the funds are spent. Most of the 1.6% that goes to other agencies is used by the Teachers Retirement Board to fund the third year payment for the teachers' early retirement incentive program.

The remainder - 1.1 % - is split between statewide reform initiatives and Department operating expenses. Unlike the federal budget which includes administrative funds and positions within each program's appropriations, the state budget has traditionally funded all Department staff and operating expenses through a single line-item.

The following bulleted points highlight the major priorities of the Board's budget request. Appendix C provides a full analysis of each FY'96 line-item that goes towards one of these points. While this chart includes all FY'96 line-items as a point of reference from previous years, the Board strongly recommends that the Governor and legislature combine line-items where appropriate to simplify the education budget and increase administrative flexibility at both the state and local levels.

1. DIRECT STATE AID TO SCHOOL DISTRICTS - 93.5% - $2,412,776,822

   Since the passage of the Education Reform Act, state support for public education has increased by over $700 million. Each year, Chapter 70 or Foundation Aid is raised by a set amount as specified in the Education Reform Act. School Building Assistance, the other large appropriation, goes to reimburse communities for approved school construction projects. The only accounts that the Board recommends increasing in FY'97 are Special Education 50% Reimbursements, which are an entitlement, and Minimum Aid/Professional Development, which is discussed below. The other accounts are distributed by formulas and have been built into school districts' budgets. While the Board does not recommend that these appropriations be increased, reduction in these accounts would supplant the impact of new Education Reform funding.

   Board Priorities:

   • Fully fund the $209 million increase in foundation aid

     Most of this funding is directed towards school districts that spend below a model minimum or foundation budget. By the year 2000, the state will increase aid to these districts incrementally until all districts meet their foundation target. Districts already spending above their target foundation budget receive a minimum per student increase in state aid. According to the original funding schedule, this minimum aid was due to fall from $100 per student in FY'93 to $50 per student in FY'94 to $25 per student from FY'95 on.

   • Continue minimum aid increase of $75 per student

     In the FY'96 budget, the scheduled minimum aid for above foundation communities was increased from $25 to $75 per student through a combination of statewide implementation funding and dedicated increases in new lottery aid. As part of this compromise, $25 per student of state aid for all districts was earmarked for professional development. The Board`s FY97 request repeats this same compromise with an additional increase of $75 per student of minimum aid over the $150 per student increase that above districts have received since Education Reform was passed.

   • Increase professional development earmarking from $25 to $50 per student.

     Because an additional $10 million of the statewide implementation funds are recommended to be used to increase minimum aid, the Board requests that an additional $25 per student of state aid be earmarked for professional development. While the first year of earmarking had minimal effect on the amount or quality of professional development that teachers were provided with across the Commonwealth, this second year of earmarking should have a much more dramatic effect. Prior to FY'96, many districts spent close to or over $25 per student. This, combined with the late date of the earmarking, meant that most districts did not make major changes in their budgets to accommodate the earmarking. Next year, however, if the Board and others make clear the state's intention to increase the earmarking, districts will be in a much better position to build this expectation into their local budgets.

   • Authorize 50% of the current School Building Assistance needs

     Each year an authorization level is established for new districts to participate in the SBA program. The existing waiting list for districts is approximately $21 million for desegregation related projects and $41 million for non-desegregation related projects. The Board recommends that SBA grants be authorized for half the totals on each list. In addition, the Board recommends that $2 million be authorized for charter schools. This authorization would require a legislative change as well.

2. GRANTS TO SCHOOL DISTRICTS - 3.7% - $96,673,550

   A combination of Education Reform and non-Education Reform funded grants are used to support specific programs or priorities. Typically, these grants are focused on areas that the state believes districts should fund at higher levels than they otherwise would if the funds were block granted. The other major advantage of the grant process is that it ensures a higher degree of quality control for priority areas by requiring districts to articulate their plans by submitting applications. Whether the ensuing approval process is competitive or against an objective standard, this process provides the state with the opportunity to work more closely with districts.

   Board Priorities:

   • Use Education Reform implementation funds to increase funding for the most successful school restructuring grant programs.

     While there is no substitute for adequate, stable funding, the Board and Department have found over the last few years that certain highly focused grants can have a tremendous catalytic effect on supporting school change. The grants listed in Attachment C under the category Essential Skills and School Restructuring have been found to be particularly effective in this regard. The increases requested by the Board are funded exclusively through Statewide Implementation funds.

   • Increase funding for High Achievement grants.

     Although the Board believes that prioritization of particular programs is usually best left to local districts to decide, there are some cases in which start-up grants can provide an important impetus for districts. The Advanced Placement and Gifted & Talented grants are an expample of this type of program.

   • Increase funding for Early Childhood Education by $10 million.

     One of the major priorities of Education Reform is to build a system of early childhood education that ensures that all children have access to affordable, high quality programs that will enable them to enter school ready to learn. The Board strongly supports this priority and recommends a similar increase to that included in the FY'96 budget.

   • Increase funding for Adult Basic Education by $7 million.

     As mandated by the Education Reform Act, an Adult Education Committee was established to develop funding mechanisms for ABE. The Committee's final report, completed this September includes a recommendation to increase state funding for ABE by $7 million annually.

3. REFORM FUNDS FOR OTHER AGENCIES - 1.6% - $40,550,000

   Traditionally, the only funding for other state agencies included in the Board's Budget Request are those line-items that draw down the Education Reform implementation funds. By far the biggest single item in this area is the $40 million annual appropriation to the Teachers Retirement Board. The Commonwealth's obligation to this program is expected to remain constant through FY'98, fall to $20 million in FY'99 and zero out in FY'00. The Board's request does not include funding for Department of Public Health teen day care and pregnancy prevention programs. The programs are clearly valuable, but they are not mentioned in any way in the Education Reform Act of 1993. Funding them with implementation funds undermines the basic commitment to Education Reform and opens the door for an erosion of funds that are needed for public school improvement.

4. DOE EDUCATION REFORM INITIATIVES - 0.8% - $21,613,926

   Although FY'96 funding was substantially below that requested by the Board, the Department has proceeded with the implementation of most FY'96 objectives of the Board's Five Year Master Plan by implementing a zero-based review of all Department functions. While this review has led to some substantial shifts in state and federal resources to Reform initiatives, the lack of dedicated state funding has slowed some initiatives and forced others to be dramatically scaled back. Since federal funds will probably be severely curtailed next year, the state will no longer be able to rely on these funds to integrate with and support state mandated programs. The Board's FY'97 request, therefore, reflects the full costs of implementing Education Reform. As noted above, while Appendix C provides budget projection for each FY'96 line-item as a point of comparison, consolidation of these line-items into the five sub-groupings and inclusion of general implementation funds would provide the Department with much needed flexibility.

   Board Priorities:

   • Fully fund the assessment contract.

     The single most important initiative to the long term success of Education Reform is the rapid development of a new assessment system. In September, after a lengthy review, the Commissioner selected Advanced Systems as the contractor to develop and administer this new system. He directed Advanced Systems to develop a new assessment system based on the Curriculum Frameworks that would combine an equal emphasis on multiple choice and open ended writing questions. The selection of this contractor and basic design parameters of the assessment were carefully researched to ensure maximum validity, reliability, and integration with the Curriculum Frameworks. The Board's budget request for this line-item would allow the contractor and Department staff to proceed with the development and initial piloting of the new assessment system on schedule. Any significant cut back in this line-item would force the Department to delay or scale back the breadth of the contract. Either would be extremely detrimental to the public and education community's confidence in the standards and accountability measures that are central to Education Reform.

   • Support the wide dissemination of the Curriculum Frameworks.

     The process that Massachusetts is going through to establish statewide curriculum frameworks and student performance standards is difficult and time consuming. As with the Common Core of Learning, the initial draft of the Frameworks released in the Spring of 1995 was a major accomplishment on its own, but set in motion substantial revisions to make the Frameworks tighter, more content-oriented, and better balanced. The November 1995 versions reflect these improvements and, while still evolving, provide the next major step in the process. Most importantly, the November 1995 versions will be used by assessment committees in each subject area to develop the new assessment system and will replace the previous drafts that educators across the state are already using to guide their curriculum revisions. The $1.5 million included in the Board budget will be used to print and disseminate two user-friendly versions of the Frameworks, one formatted specifically for teachers, and the other formatted for parents and other members of the public. In addition, these funds will be used to begin to develop on-line curriculum warehouses and other important tools to assist teachers in using the Frameworks in their classrooms.

   • Increase funding for professional standards, certification, development.

     The Board's FY'96 budget requested over $16.8 million for these line-items. The final state budget included only $3.87 million, but added a $25 per student earmarking of state aid towards professional development. The Board's FY'97 request reflects this decentralized vision for professional development. Instead of relying on state implementation funds to provide districts with grants to support professional development, the Board is requesting only those funds needed to leverage and coordinate quality professional development either directly by districts or through the network of private professional development providers. The increased funding requested for certification administration reflects the additional costs associated with the full transition into a performance-based certification system.

   • Provide adequate funding for educational technology.

     Unlike most other states at the forefront of Education Reform, Massachusetts has not provided substantial funds to assist districts in implementing educational technology. Because only $2 million of the Board's $7.2 million FY'96 educational technology request was funded, much of the momentum that was built last year has leveled off. Although districts are continuing to spend millions of dollars to implement technology with varying degrees of effectiveness, the state has not been able to provide much needed coordination and assistance. Whereas most Education Reform decisions are best made at the local level, technology provides a clear role for the state. The state's ability to negotiate preferential agreements with private vendors and coordinate inter-district efforts would save districts millions of dollars each year. The recently filed Education Technology Bond and $4 million requested by the Board are absolutely essential to building the state's capacity to play this much needed role.

   • Restore general implementation funding.

     In FY'95, $11.8 million was included for Education Reform implementation. In FY'96, nothing was included in this general line-item. Although several new line-items were added, they did not cover all of the initiatives for which the Board is responsible and did not provide the Department with adequate flexibility to adapt to unforeseen circumstances.

5. DEPARTMENT OPERATIONAL EXPENSES - 0.3% - $8,483,754

   50% of Department positions are currently funded through Federal accounts. The Department has effectively integrated these Federal categorical funds with state Reform initiatives through the Five Year Master Plan. However, since severe federal cut-backs are expected next year, the lack of dedicated state funding for Reform initiatives may impede the Department's ability to implement Education Reform. In addition, Department staff funded under this line-item have played an important role in competing for foundation and federal funds. Last year alone, Department staff successfully brought in over $12 million through competitive sources, the vast majority of which went directly to local school districts. Any cut back in this line-item would have a detrimental impact on both the implementation of state Education Reform mandates and the flow of additional funds to school districts.

   ATTACHMENT A: THE EDUCATION REFORM FUNDING COMMITMENT:

   Since the passage of the Education Reform Act of 1993, the Board of Education's budget has been shaped principally by the financial schedule laid out in the Act. The central feature of this schedule is a commitment by the Governor and Legislature to increase funding for Education Reform by a set amount each year over the next seven years. These new funds are cumulative, pegged to inflation, and split into two main areas:

   1. Foundation Aid - $210 million scheduled increase in FY'97

      The vast majority of this funding is directed towards school districts that spend below a model minimum or foundation budget. By the year 2000, the state will increase aid to these districts incrementally until all districts meet their foundation target. Districts already spending above their target foundation budget receive a minimum per pupil increase in state aid.

   2. Statewide Initiatives - $33 million scheduled increase in FY'97

      In addition to increasing direct aid to schools, the Education Reform Act committed substantial new funds each year to the implementation of statewide initiatives such as the new assessment system, professional development, school restructuring, educational technology, and early childhood education. However, during the first two years of Education Reform, approximately 2/3 of all implementation funds were used to fund the teachers' early retirement incentive program.

      The chart attached on the next page shows the breakdown of Education Reform funding from Fiscal Year 1994 through Fiscal Year 1997. According to the Education Reform Act, these funds are due to increase at roughly the same rate through the year 2000 at which point all schools would be funded at their foundation budget and all components of the Education Reform Act would be fully in place

6. THE FISCAL YEAR 1996 COMPROMISE ON MINIMUM AID AND PROFESSIONAL DEVELOPMENT

   The only major departure from the original funding schedule took place in Fiscal Year 1996 in response to the growing concern among above foundation communities that they lacked enough new funding to implement Education Reform's many requirements.

   According to the original funding schedule, this minimum aid was due to fall from $100 per student in FY'93 to $50 per student in FY'94 to $25 per student from FY'95 on (see attached chart 2). In most above foundation districts, this $25 per student increase was supplemented at the local level by the minimum increase in local contributions called for by the law and failed to provide them with adequate resources to keep pace with inflation and enrollment. Although some argued that these districts already had access to substantially more funds then the below foundation districts, a general consensus formed that the above foundation districts needed additional funds as well.

   The compromise that was struck through the legislative process increased the minimum aid for above foundation districts from two additional funding sources: increased targeted lottery aid and statewide implementation funds (see attached chart 3). Since the implementation funds were diverted from the Board's request for professional development grants, the compromise added a $25 per student earmarking of state aid to all districts to professional development

   The Board's FY'97 budget request repeats this compromise a second time with a cumulative increase of $75 per student in new state aid to above foundation districts and a second increase in professional development earmarking from $25 per student to $50 per student.