Blue Mass Group

Reality-based commentary on politics.

Nothing but the facts and very little good news from the Mass Budget and Policy Center

By

The proposal would reduce unrestricted local aid by 28.5 percent. The Governor, however, proposes increases in the meals and hotels taxes that could produce $150 million in new revenue and reduce the local aid cuts to 16.7 percent.

The Governor’s budget documents describe the proposed Chapter 70 education funding level as a cut of $300 million.

One element of the Governor’s Chapter 70 education funding proposal raises significant legal as well as policy concerns. Data on the website of the state Department of Elementary and Secondary Education indicates that the House 1 funding levels could leave funding in 153 districts a cumulative $168 million below the “foundation budget” levels that the state has calculated as the minimum amount of funding that a district needs to provide an adequate education to its students.

At the core of the Education Reform Act of 1993 and Supreme Judicial Court decisions on education financing is the principle that the state has a constitutional obligation to provide enough funding for each district to provide an adequate education for its students. The Governor has indicated his hope that the emergency state aid coming from Washington will provide enough money to allow all districts to spend at the foundation budget level. He has also been a leader in the national efforts to encourage Congress to include such education aid in the stimulus package. If those efforts are not successful, however, there is a danger that the 569,000 students in these 153 districts will be denied what had been thought to be a constitutionally guaranteed right: the right to attend a school that receives at least the minimum amount of funding it needs to provide an adequate education to its students.

The budget also proposes deep cuts in human services, health care, environmental and other accounts across state government. In addition, the Governor proposes several revenue measures in addition to those tied to local aid. His budget would repeal the sales tax exemptions for candy, soda, and alcohol, expand the bottle bill, increase fees at the registry, and hire more auditors to reduce tax evasion.

This Budget Monitor examines the spending recommendations in each area of the budget and revenue proposals and compares proposed spending levels to historic levels. While there is very little good news in the budget, this reflects the reality of the situation we are in.

The state has had structural fiscal problems for a decade and we are now in the middle of the worst recession since the Great Depression.

Please share widely!
fb-share-icon
Tweet
0

Comments

  1. wrapping their heads around this Chapter 70 funding.  I don’t think the average joe understands how serious a problem it is.  As I commented here and here, we are in a baaaaad place in my district.  It’s this simple:  because of the complexities of regional district assessments, if we don’t get to foundation level we won’t be opening our doors to over 7200 students in September.  Plain and simple.  

    • Or more accurately, for folks who are not dummies, but who are uniformed about Chap 70, don’t understand it, never mind wrap their heads around it. (Count me in that group)

      <

      p>Then if you’ve got time,I for one would like to hear some suggestions from you and other BMG folks in the know, about how the Chap 70 distribution formula might be changed to make it more equitable.

      <

      p>Or is it already equitable and the answer is that a bigger share of the state revenues should be put into Chap 70? And then you might tell us where we might get some more revenues for Chapter 70?

      • website, they do a fairly good job in providing explanations and overview.  This might be helpful for people:

        <

        p>Chapter 70 Regulations and Overview

        <

        p>Explanation of the Foundation Budget

        <

        p>FY10 Chapter 70 Aid and Required Contribution

        <

        p>From my perspective, the egregious inequity of the formula was fixed for the town I represent several years ago.  In that correction, however, one of the other towns in the district got hammered because the formula had previously  advantaged them.  I cannot speak to the formula, per se, as its rather esoteric, but I will say that much of the difficulty we have recently had can be put squarely on the shoulders of Prop 2 1/2.  Overrides are not the proper way to finance a quality public education.  

        <

        p>  

        • how the Chap 70 distribution formula might be changed to make it more equitable.Or is it already equitable and the answer is that a bigger share of the state revenues should be put into Chap 70? And then you might tell us where we might get some more revenues for Chapter 70?

          <

          p>Thanks for the links, but they don'[t help dummies much.

          • 1:  Chapter 70 is the code section that describes State funding from a combination of the Lottery proceeds plus general fund.  The theory is that irrespective of a town’s wealth, students across the commonwealth ought to have at minimum a certain level of schooling. A foundation.  An SJC case in the 90s confirmed it this principle.

            <

            p>2: Some economists and educators, even before the SJC, came up with a model that calculated education costs, which at a minimum have to be incurred.  That became the Foundation Budget:  wages, administration, facility, special ed tuition, ….

            <

            p>3: Because of i) mix and ii) costs, the Foundation differs from town to town.  There is a different foundation cost per pupil depending which town you’re discussing.  That is to say vocational is more expensive than non-vocational; special education is more expensive.  That’s mix.  Costs differ because capital costs more, for example in Boston than Pittsfield.

            <

            p>4: A per pupil costs is calculated.  This is the part that annoys the Charter nazis.  The per pupil cost “follows” the student should he leave the district to attend another district or a Charter school.

            <

            p>5: Each town calculates its “foundation budget” based on the Model costs multiplied by pupils enrolled in the various schools.  

            <

            p>6:  Here’s the hard part (at least the hard calculation). Each town has an established “minimum contribution” based upon i) its property tax based and ii) its income tax base.  That is to say that wealthier towns must contribute more because they can allegedly pay more.  IMHO, it’s not a bad method to determine wealth, however, it can be affected by age demographics: elderly non-workers can cause the income factor to indicate less wealth than the town actually has.

            <

            p>7:  Chapter 70 + Local = total spending which must be in excess of the foundation.  Penalty for not doing so?  Non-approval of a municipality’s tax rate, enforcement action by the Attorney General, or loss of state aid

            <

            p>8: But to reiterate: Chapter 70 does NOT equal the minimum foundation.

            <

            p>9:  To the extent that the town’s total budget exceeds the foundation minimum, that excess must come from property taxes plus some miscellaneous sources.  

            <

            p>10: There are an un-countable number of towns that are projecting a shortfall for 2010. That is to say, the Chapter 70 + Local is not meeting the Foundation Minimum.  Actually it’s completely countable, but I’m lazy and will not count them.  Suffice to say, there are many.

            <

            p>11: Solutions to those towns.  There are 4: i)  Cut costs or ii) raise local taxes or iii) beg for more Chapter 70 or iv) hope for Fed assistance.

            <

            p>Bringing up the Minimum Foundation is a total red herring, UNLESS you are one of the towns where the projected 2010 shows that Chapter 70 + Local is less than the Foundation.

            <

            p>For these towns, the choices are rather stark,  because cost cutting is somewhat difficult if the Foundation has been established.  See what I mean?  If there’s a minimum foundation, a town can’t easily cost cut.  Although I’ve always figured that a voluntary freeze or reduction of salaries would solve the problem without upsetting the Foundation.  

            <

            p>Further, there is one more option for those underfunding towns: because there are several towns in the same boat, it wouldn’t surprise me that Legislature waived the requirement for F/Y 2010, upon which some underfunded school districts would sue on the principle that its poor students weren’t getting as good an education as the wealthy town.  On a bright note though, under that scenario, the Lawyers would make a grip of cash.

            <

            p>-

            • Why, you may ask isn’t the spending able to keep up with the Foundation Budget.  The answer, from a big picture, is really simple:  

              <

              p>1: The Foundation Budget has grown at 4.5% annual rate.

              <

              p>2: Towns can only raise taxes at approximately a 2.5% rate (plus or minus) and are therefore reliant on the State to increase Chapter 70 at a rate to compensate.  And, the State can’t.  Really, it never could.  It’s an absurd growth rate.

                • The entire point-by-point explanation of Chapter 70 was factual except that the foundation growth rate is absurd. That, opinion.  Take it as such.

                  <

                  p>I maintain that opinion simply because the foundation growth rate exceeded that of GDP!

                  <

                  p>Implicit, was at that high growth rate, i) a future tax revenue increase or ii) local aid increase that’s based on a tax increase or iii) additional allocation from the General fund from some, then unknown source.

                  <

                  p>Or at very least the foundation growth compeled the Towns to keep up thereby spending heavily in the good times and building no cushion for this current recession.  There is a provision within Chapter 70 whereby a town that spends over the budget can ‘bank’ the excess for mid-term future calculations.

              • The actual growth rate for the municipal tax levy probably is more like 3% to 3.5% in a typical year, as there is usually “new growth” in the form of new construction or renovation of existing property, both of which allow an increase in the levy limit about the 2.5% growth cap.  Of course, these are not “typical” times.

                • The actual growth rate for the municipal tax levy probably is more like 3% to 3.5% in a typical year, as there is usually “new growth” in the form of new construction or renovation of existing property, both of which allow an increase in the levy limit about the 2.5% growth cap.  Of course, these are not “typical” times.

                  <

                  p>And look what happened.  All over the state, in all departments, managers were using 4%, 4.5% to grow budgets all the while relying on i) 2.5% levy increase ii) new development property tax increase iii) state aid increase iv) Chapter 70 increase v) Library aid increase.  

                  <

                  p>Nevermind that the average GDP growth rate was 3.0% for 2002 – 2006.  Anyone for reality based budgeting?

                  <

                  p>I’d attend town committee meetings as the resident Mr. No, and listen to these magnanimous speeches exclaiming the dedication, selfless effort, blah, blah, blah….that the teachers, police, janitors, DPW did for the community.

                  <

                  p>No doubt.  

                  <

                  p>But, they’d lose me though when the raises, step raises and merit raises exceed 3.0%, which they typically do.  Talk about a slow speed train wreck.  Work through your community’s Education salary from year-to-year, say from 2004 to now and tell me that the rates of increase were less than 4.0%.  Gross salary.  And never mind about the benefits; we all know that benefits exceeded 4.0%.
                  Don’t be deceived with contract negotiated raises; look at gross salary, year-on-year.

                  <

                  p>And, here we are. Not in typical times, and the 4.0% growth in spending rate has caught up.  So what to do? Raise the gas tax, raise the bottle tax, raise the fees, raise the property tax….

      • when we have 500+ teachers?  We are a regional district, not a municipality.  We need to pass a budget in 4 out 5 towns.  Bankrupting 3 of those towns to get a budget that would provide something close to level service is not an option.  Cuts to the budget are proportional, so in order to make it possible for the least wealthy towns to afford the school budget, we have to make similarly proportionate cuts to the overall budget.  IOW, reducing the assessment burden of one town by 10% may be a small amount of money, but in the overall picture can translate into millions when all is said an done.  

        <

        p>I suppose we could literally open the doors, but we wouldn’t be operating schools, we’d be operating warehouses.  We already operate in the bottom quartile for cost (top quartile for performance).  There is no fat.  We can’t put 80 (or more) kids in a classroom.

  2. The real budgets are written by the House and Senate, and then by the Conference Committee.  I don’t think House One even makes it to conference.

    <

    p>ALL spending bills originate in the House.  THAT is the ball to keep an eye on.

    • See:  http://finance1.doe.mass.edu/c…

      <

      p>Despite a 300 page masters report from Judge Botsford when she was a hard working Superior Court judge that made clear that the current funding system was inquitable enough to be potentially unconstitutional, the SJC itself said, basically, “The legislature is trying hard.  Let them be.”

      <

      p>Actually, what the SJC really said was, “After getting slashed for upholding clean elections, do you REALLY think we will ever have the balls to touch the general appropriations power ever again?”

Archives