Report: Wealthiest Mass. School Districts Getting More State Money

Analysis shows too much education aid is going to wealthier school districts at the expense of low-income communities

NBC Universal, Inc.

Massachusetts gives more money to wealthier school districts than they need at the expense of low-income communities, according to a new report.

The state's method for determining funding increases aid to districts that, based on their wealth and income, could afford to fully fund their schools with less or no state aid, according to an analysis by the Massachusetts Business Alliance for Education (MBAE) and the Greater Boston Chamber of Commerce (GBCC).

In the 2021 budget proposal, $778 million, or 14%, of total Chapter 70 state aid, is not distributed to school districts based on need as determined by a state formul, the study found. Approximately $498 million, or 64%, of those funds are sent to the wealthiest 20% of school districts in the Commonwealth.

The Chapter 70 program provides aid to public schools in the state and established minimum requirements for district spending and how much towns must contribute to school costs.

The economic crisis caused by the coronavirus pandemic further threatens the state’s ability to deliver increased funding for districts that serve greater numbers of higher-need students, according to the findings.

“An equitable economic recovery from the COVID-19 pandemic requires greater attention to how the state leverages and targets its limited resources,” Greater Boston Chamber of Commerce CEO James Rooney said.

The MBAE and GBCC report, "Missing the Mark: How Chapter 70 Education Aid Distribution Benefits Wealthier School Districts and Widens Equity Gaps," outlines four recommendations to make the education funding formula more equitable.

The formula's deficiencies were largely unchanged by the Student Opportunity Act (SOA), an education reform bill of historic scope passed in November 2019, the analysis shows. The bill was intended to increase state spending to address the needs of low-income students, English language learners, and students with a disability.

“Equitable access to resources is an essential component of closing equity and opportunity gaps,” MBAE Executive Director Ed Lambert said. “It is critical, particularly in this economic climate, that we redirect state dollars to communities serving students that need them the most.”

Gov. Charlie Baker’s 2021 budget proposal provides $5.48 billion in Chapter 70 education aid. Cities and towns are required to contribute at least $6.79 billion to meet spending requirements.

The analysis shows that $778 million, or 14 percent of total Chapter 70 aid, is allocated to school districts on the basis of factors included in the formula that do not take into account underlying community need, which the report calls "needs-blind formula factors."

The report identifies five needs-blind formula factors and analyzes their effect on the amount and distribution of state Chapter 70 aid, including the "hold harmless" provision, which guarantees that each district will receive at least as much state aid as it did the year before. Minimum aid is another factor, which provides a flat per-student increase in state aid when districts would not otherwise get an increase. Generally, districts that benefit from the hold harmless provision also get minimum aid.

Maximum local contribution share is another problematic factor identified in the report. For 2021, the state calculates that 104 of Massachusetts’ 351 municipalities can fully afford to fund their schools from local resources available to them. However, a municipality’s local contribution to its schools is capped at 82.5 percent of total required spending on schools, assuring that school districts serving wealthy communities still receive state Chapter 70 aid. The report's findings show that this formula factor lowered the amount of state aid to the lowest-resourced districts by as much as $82 million in 2021.

The report outlines ways the state formula could be adjusted over time to ensure funds are flowing to the districts most in need, including a gradual phase-out of the hold harmless provision and increasing the maximum required local contribution.

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