House and Senate Pass Historic Overhaul to Education Funding Formula

For the past year teachers and school leaders have been actively lobbying the state legislature and governor to begin taking steps to overhaul the state’s education funding formula to ensure equity for all students, especially those in low-income areas.

Because the state has not updated its education funding formula since 1993 to reflect districts’ real health insurance and special education costs, the amount of aid being provided to cover those costs is too small.

To compensate, many districts like Boston end up using money that would otherwise have supported core education programs—including Regular Ed. Teachers, Materials & Technology, and Professional Development. This also results in dramatic cuts in other areas of education.

The problem for low income school districts is there is a growing equity gap between schools in Boston and schools in more affluent areas of the state. When faced with such shortfalls, high-wealth districts can often draw on additional, local revenue. Lower-wealth districts, however, are generally unable to do so and the consequence is that they spend less on resources that are critically important to the quality of education students receive.

Late last month Rep. Liz Malia, Rep. Nika Elugardo and Sen. Sonia Chang Diaz joined  their colleagues in the House and Senate to unanimously passed historic legislation to invest $1.5 billion in the Commonwealth’s public education system.

“The Student Opportunity Act is a landmark agreement and a generational shift toward equitable education funding across the Commonwealth. As with the 1994 Ed. Reform law, and the Dropout Prevention law, we set out to make the education system support all children,” said Rep. Malia. “The Student Opportunity Act will change our policy and funding landscape in four areas in order to meet our goal. While this bill admittedly doesn’t have an answer for every lingering question and concern about educational policy in Massachusetts, I am proud of the massive steps toward a more equitable funding structure that this bill takes.”

Sen. Chang Diaz, who authored an earlier version of the bill added, “The last time the Massachusetts State Senate and House came to the conference table on this issue, the equity provisions were biggest gap between the bills. This is a huge victory for our kids and future in the Commonwealth. Thank you to the numerous advocates and stakeholders for your tireless advocacy that got us to this day. And congrats to Mary Keefe, Aaron Vega, Rep. Alice Peisch, Rep. Aaron Michlewitz, and House Speaker Robert  DeLeo for your work and for passing these critical reforms.”

Known as The Student Opportunity Act, the legislation invests funding to support the needs of English learners and school districts that serve high concentrations of low-income students in order to help address persistent disparities in student achievement.

Under the legislation, school districts across the Commonwealth will benefit from updates to the existing funding formula, along with increased state investment in other vital education aid programs such as transportation, guidance and psychological services, school buildings and special education. 

The bill fully implements the recommendations of the Foundation Budget Review Commission (FBRC) to ensure that the school funding formula provides adequate and equitable funding to all districts across the state.

The bill will provide an estimated $1.4 billion in new Chapter 70 aid over and above inflation when fully implemented over the next seven years.

Key updates to the foundation budget that will benefit Jamaica Plain are:

• Estimates school districts’ employee health care costs using up to date health insurance trend data collected by the state’s Group Insurance Commission (GIC), and includes for the first time an amount for retiree health insurance costs.

  • Increases special education enrollment and cost assumptions to more accurately reflect district enrollment and costs

  • Increases funding for English learners (EL) that is differentiated by grade level to reflect the greater resources required to educate our older EL students.

    • Addresses the needs of districts educating high concentrations of low-income students by:

    • Providing additional funding based on the share of low-income students in each district; districts educating the largest percentage of low-income students will receive an additional increment equal to 100% of the base foundation;

    • Returning the definition of low-income to 185% of the Federal Poverty Level, as opposed to the 133% level that has been used in recent years.

   • Improves data collection and reporting, specifically around use of funding, by:

    • Establishing a Data Advisory Commission to help improve the use of data at the state, district, and school levels to inform strategies that strengthen teaching, learning and resource allocation to ensure greater financial transparency, including tracking funding for low-income students and English learners.

    • Provides additional state financial support to help public schools and communities deliver a high-quality education to students:

    • Increases foundation rates for guidance and psychological services that will support expanded social–emotional supports and mental health services.

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