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The special commission charged with reviewing the state’s main school finance law has approved initial recommendations to update two important parts of the minimum school spending standard – changes that could increase school aid for many districts beginning as soon as fiscal 2017.
In a report filed with the Legislature’s Joint Committee on Education on June 30, the commission proposed to update how health insurance costs are accounted for in the “foundation” budget set for school districts under Chapter 70 school finance law. The commission also proposed to adjust special education cost factors to better reflect actual spending at the local level.
The report listed almost a dozen other foundation budget topics that would be worked on over the summer if the commission is granted its requested extension until Nov. 1 for a final report. These topics include looking at how the foundation budget reflects low-income, English language learner (ELL) and mental health and related “wrap-around” costs; preschool and early grade classroom assumptions; extended learning time; school technology; and ways for school districts to operate more effectively.
The recommendations for the health insurance component of the foundation spending standard would set a new employee health insurance rate linked to the average state Group Insurance Commission rate. The plan would also establish a new component for health insurance for retired school employees that is not now part of the foundation budget, and would create a special health care cost inflation factor for these two foundation budget components.
The commission also recommended that the foundation budget components for in-district and out-of-district special education be adjusted to reflect actual special education costs, which have substantially exceeded expectations originally adopted in the early 1990s. The plan would increase the current assumed in-district special education enrollment rate from 3.75 percent of students to 4 percent (from 4.75 percent to 5 percent for vocational students) and would increase the out-of-district rate to capture spending up to the level before special education “circuit breaker” reimbursements are triggered.
Analysis done by the Department of Elementary and Secondary Education and others has shown that these factors as originally included in the 1993 law now significantly understate actual costs.
Impact summary
The commission report includes an impact summary that describes how these formula changes would affect statewide school aid and local contribution amounts using fiscal 2014 data and assuming full implementation in a single fiscal year. The changes would have increased the fiscal 2014 statewide foundation budget by $800 million, to $10.5 billion. Required local contributions would have increased by $46 million, to $5.8 billion, and school aid would have increased by $495 million, to $4.8 billion. Some districts would have remained as “minimum aid” districts.
The commission, established in the fiscal 2015 state budget act, is charged with reviewing parts of Chapter 70 school finance law, with a focus on how the “foundation” spending standard is calculated. The commission, with 21 voting members, is co-chaired by Rep. Alice Peisch and Sen. Sonia Chang-Diaz, the House and Senate chairs of the Education Committee. There is also a six-member non-voting advisory committee.
The commission includes eight legislators and four members of the Executive Branch. There are nine members representing other public education stakeholders, including Attleboro Mayor Kevin Dumas, who represents the MMA.
• Download Foundation Budget Review Commission’s Preliminary Report, issued June 30 (806K PDF)