School finance modernization on Legislature’s fall agenda

From the Beacon, September 2019

Wow, that was a fast summer! We know climate change has been making summers hotter, but now it seems the calendar is speeding up, too. The Legislature started its summer recess just four weeks ago, and with new sessions resuming soon after Labor Day, it doesn’t feel like there has been any slowdown or downtime. That’s a good thing, because there are many key issues and priorities awaiting action on Beacon Hill.

Chief among the issues that will be on the Legislature’s docket this fall is passage of a comprehensive rewrite and modernization of our 26-year-old school finance system. I highlighted this issue in a column earlier this year, but because the legislation may soon emerge for debate at the State House, it is important to review the major themes and concerns of cities and towns in advance of the debate.

The key question for cities and towns is whether the final bill will increase state support for K-12 education for every community and provide meaningful relief to those cities, towns and districts that are struggling mightily under the outdated system.

The MMA was privileged to participate in the important work of the Foundation Budget Review Commission, and we support full implementation of the recommendations. But the MMA is also calling for other necessary changes to school finance law, related to how we fund charter schools, ensure adequate minimum aid increases each year, and provide support for rural schools. In order to be successful, comprehensive modernization of our K-12 school finance system must incorporate all of these factors.

We acknowledge the initiatives in the packages that have been filed by the administration and key leaders in each branch. We are asking the Legislature to enhance and build on these recommendations. Members of the House and Senate have filed a wide range of bills to do just that.

For example, we are very pleased that the House bill (H. 576) and other proposals would use a much shorter time frame to implement important FBRC recommendations, rather than the administration’s seven-year approach. This shorter phase-in is desperately needed. In addition, though, the final bill must address the fiscal damage caused by the flawed charter school finance system; these are interlocked issues and combining them is essential.

Implementing consensus FBRC reforms
We support updating the Chapter 70 foundation budget factors consistent with the FBRC’s well-known recommendations. This includes accurate and realistic factors for special education and health benefits for active and retired school employees. It also includes enhanced and reworked increments for low-income and English learner students. We urge the Legislature to support the fullest and fastest possible implementation of these formula reforms.

We are encouraged that the fiscal 2020 state budget makes important steps in this direction. We also support the governor’s proposal to enhance the guidance and psychological services factor to reflect new best practices related to school safety and climate, and social and emotional health. This is a helpful addition to the FBRC’s work.

Ending damage caused by charter finance system
We call for a school finance circuit breaker to mitigate the harm done to local public schools by the state’s method of funding charter schools. There are years of documented harm caused by the current system, with many communities seeing a net reduction in available Chapter 70 aid from year to year, causing deep cuts in non-charter schools. Even if the newly redrafted charter school reimbursement formula is fully funded in the future, scores of cities, towns and school districts would continue to struggle to fund their regular (non-charter) public schools.

Rising charter school assessments are forcing local public schools to cut programs and services to make up the difference. Because the vast majority of K-12 students attend regular public schools in these communities, this means that the existing charter funding system has a directly negative impact on the vast majority of schoolchildren.

Of the cities and towns with the largest diversions, many have been deemed by the state to have underperforming schools. These include many of the state’s poorest and most financially distressed cities and towns. The current system has the unfortunate effect of harming the most vulnerable and challenged school districts, communities and students.

No update of the Chapter 70 framework will be workable or complete without correcting the major flaws in charter school finance. At a minimum, the final legislation should include a floor or circuit-breaker provision to ensure that each district’s Chapter 70 aid available for non-charter-school spending increases at an acceptable level from year-to-year.

Ensuring adequate minimum aid
Even with the partial implementation of many of the FBRC’s recommendations in the fiscal 2020 state budget, more than half of our cities, towns and regional districts received only minimum aid increases of $30 per student. This cannot continue, because below-inflation aid each year squeezes communities in an ever-tightening vice grip, forcing cuts to existing school programs or further diminishment of municipal services.

The MMA is asking that annual minimum aid increases be at least $100 per student to avoid the damage that would hit so many schools across the state. Because there is no perfect one-size-fits-all formula to address all of the dynamics in 351 diverse cities and towns, minimum aid is essential to ensure that no community is left behind. None of the major reform bills include a commitment to adequate minimum aid increases each year, and this vital element needs to be added.

Addressing rural school fiscal challenges
School finance is complex and multi-layered, with disparate impacts across different types of districts and in different parts of the Commonwealth. Even with the above reforms and policies, many smaller rural school districts would be left behind. That is why any meaningful school finance reform plan must also include provisions to assist rural school districts.

At this time, none of the bills would provide fiscal relief for regional schools struggling with declining enrollment, even though further consolidation or other fiscal efficiencies are simply not feasible in these areas. We are asking for a new rural school factor in the foundation budget to address this issue.

Summary
School finance reform is long overdue and must address needs in all districts. Municipal leaders are asking their partners in state government to update this vital part of the state-local relationship because it is fundamental to the quality of life in our communities and the long-term health of the Massachusetts economy.

In order to be successful, comprehensive modernization of our K-12 school finance system needs to include four fundamental pillars: swift implementation of the FBRC recommendations, a solution to the flawed charter school finance system, appropriate minimum aid, and a fix to rural school challenges. Without these elements, the gaps and inequities caused by the current framework will grow wider, and too many cities, towns and public schools will be left behind.