FY18 Chapter 70 Aid Preliminary House 1 Proposal January 25, 2017
Goal of the Chapter 70 formula • To ensure that every district has sufficient resources to meet its foundation budget spending level, through an equitable combination of local property taxes and state aid. 2 1/25/2017
Highlights from House 1 FY18 Chapter 70 (prelim) is $4.72B • $91M (2%) increase from FY17 • Foundation budgets are increased by an inflation factor of 1.11%. • House 1 includes an increase to the “Benefits and Fixed Charges” foundation budget rate, • based on the recommendations of the 2015 Foundation Budget Review Commission. It begins to implement a new rate which acknowledges the rapid rise of healthcare costs relative to inflation, and builds in a component to recognize the cost of retiree healthcare. This adds $66M to statewide foundation. (CBRSD receives $37,403 additional vs. FY2017) Economically disadvantaged enrollment continues to replace free and reduced price lunch • data, which is no longer available for all districts as a result of districts’ participation in the USDA’s Community Eligibility Program. The decile assignment and rate methodology is the same as FY17, with the rates factored up by inflation. (CBRSD is decile 7) The equity component of the formula continues to be phased in. Those communities required • to contribute more than their targets will have the gap between their required and target local contributions reduced by 85%. (5 of the 7 member towns have this reduction in the local contribution required) 3 All districts receive at least $20 per pupil in additional aid over the prior year. (CBRSD receives • $32,460 for 1623 foundation students) • 1/25/2017
Chapter 70 aid is determined in three basic steps A district’s Chapter 70 aid is determined in three basic steps: 1. It defines and calculates a foundation budget , an adequate funding level for each district, given the specific grades, programs, and demographic characteristics of its students. 2. It then determines an equitable local contribution , how much of that “foundation budget” should be paid for by each city and town’s property tax, based upon the relative wealth of the community. 3. The remainder is funded by Chapter 70 state aid . Local Contribution + State Aid = a district’s Net School 4 Spending (NSS) requirement. This is the minimum amount that a district must spend to comply with state law. 1/25/2017
Foundation budget rates reflect differences in the cost of educating different types of students. CBRSD = DECILE 7; ECONOMICALLY DISADVANTAGED 5 1/25/2017
Step 1: A district's foundation budget is derived by multiplying the number of pupils in 13 enrollment categories by cost rates in 11 functional areas. Massachusetts Department of Elementary and Secondary Education Office of School Finance FY18 Chapter 70 Foundation Budget 635 Central Berkshire -------------------------------------- Base Foundation Components ----------------------------------------------------------- --- Incremental Costs Above The Base ------ (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Pre- ------ Kindergarten ------ Jr High/ High ELL ELL ELL Voca- Special Ed Special Ed Economically School Half-Day Full-Day Elementary Middle School PK K Half KF - 12 tional In District Out of Dist Disadvantaged TOTAL* Foundation Enrollment 51 0 114 519 413 543 0 0 8 0 60 16 508 1,623 1 Administration 9,386 0 41,957 191,013 152,001 199,846 0 0 2,944 0 152,409 40,642 0 790,197 2 Instructional Leadership 16,951 0 75,778 344,990 274,529 360,943 0 0 5,318 0 0 0 0 1,078,509 3 Classroom and Specialist Teachers 77,723 0 347,469 1,581,876 1,107,749 2,141,804 0 0 36,723 0 502,911 0 1,613,708 7,409,961 4 Other Teaching Services 19,934 0 89,118 405,723 232,407 254,385 0 0 5,001 0 469,561 621 0 1,476,750 5 Professional Development 3,074 0 13,748 62,602 54,004 68,842 0 0 1,306 0 24,260 0 35,514 263,350 6 Instructional Equipment & Tech 11,250 0 50,291 228,957 182,195 383,277 0 0 3,529 0 21,175 0 0 880,673 7 Guidance and Psychological 5,655 0 25,284 115,109 121,930 200,953 0 0 2,362 0 0 0 0 471,293 8 Pupil Services 2,249 0 10,059 68,690 89,282 270,686 0 0 1,059 0 0 0 0 442,025 9 Operations and Maintenance 21,583 0 96,487 439,271 378,965 483,107 0 0 9,166 0 170,248 0 249,230 1,848,058 10 Employee Benefits/Fixed Charges 21,154 0 94,568 430,558 334,772 413,744 0 0 8,020 0 195,581 0 163,805 1,662,201 11 Special Ed Tuition 0 0 0 0 0 0 0 0 0 0 0 385,878 0 385,878 12 Total 188,958 0 844,760 3,868,787 2,927,834 4,777,585 0 0 75,427 0 1,536,146 427,141 2,062,256 16,708,895 13 Wage Adjustment Factor 100.0% Foundation Budget per Pupil 10,295 6 All of your students are counted in categories 1-10. Special education and economically disadvantaged costs are treated as “costs above the base” and are captured in 11 -13. 1/25/2017
Step 2: Local Contribution Establishing local ability to pay The foundation budget is a shared municipal-state • responsibility. Each community has a different target local share , or • ability to pay, based on its property values and residents’ incomes. Prior to this policy, required local contributions had become • less linked to ability to pay. A process was established in 2007 to move each community from its 2006 baseline to its new target. Starts with determining statewide local contribution • (59% of statewide foundation budget) • 7 1/25/2017
Getting Closer To the Target Contribution Determining the Upcoming Year’s Local Contribution Preliminary Contribution Increase last year’s required local contribution by the municipality’s Municipal • Revenue Growth Factor (MRGF) Calculated annually by the Department of Revenue – Quantifies the most recent annual percentage change in each community's local – revenues, such as the annual increase in the Proposition 2½ levy limit, that should be available for schools Required Contribution If the preliminary contribution is above the target, reduce by the effort reduction • percent ( 85% in FY18 ). If the preliminary contribution is below by less than 2.5%, the preliminary • contribution becomes the new requirement. If the preliminary contribution is below by more than 7.5%, an additional 2% • is added to the preliminary contribution. For those below by between 2.5 and 7.5% , 1% is added. 1/25/2017
Step 3: Calculating Chapter 70 Aid Foundation aid is the core of Chapter 70. It provides additional funding for districts to spend at their foundation budgets. Foundation Budget – Required Local Contribution = Foundation Aid START WITH: Becket Cummington Dalton Hinsdale Peru Washington Windsor FOUNDATION BUDGET 2,322,550 911,272 9,455,968 2,325,084 1,202,057 553,986 858,153 MINUS REQ. LOCAL CONTRIBUTION 1,771,907 733,711 5,048,029 1,930,681 535,265 463,635 713,260 EQUALS FOUNDATION AID 550,643 177,561 4,407,939 394,403 666,792 90,351 144,893 9 1/25/2017
Key Factors in School Funding Formula Foundation Budget Local Contribution • Enrollment • Property value • Wage Adjustment • Income Factor • Municipal Revenue • Inflation Growth Factor These six factors work together to determine a district’s c70 10 aid. 1/25/2017
Districts receive different levels of Chapter 70 aid, because their community’s ability to pay differs #’s related to CBRSD 100% 85,986 140,374 356,010 90% 509,390 154,094 % Net School Spending 80% 4,296,196 607,406 70% 1,640,055 60% 50% 636,740 441,236 691,015 1,742,741 40% 30% 4,920,058 487,594 20% 10% 0% 11 Local Contribution State Aid 1/25/2017
Calculating Chapter 70 Aid by Town Foundation Budget – Required Local Contribution = Foundation Aid Example: Town of Becket FOUNDATION ENROLLMENT = 220 FOUNDATION BUDGET =$2,322,250 -required contribution -$1,771,907 =Foundation Aid $ 550,343 STATE AID 23.7% VOC. 5.7% (11) CBRSD 70.6% 12 (209) CBRSD VOC STATE AID
Calculating Chapter 70 Aid by Town Foundation Budget – Required Local Contribution = Foundation Aid Example: Town of Dalton FOUNDATION ENROLLMENT = 911 FOUNDATION BUDGET =$9,455,968 -required contribution -$5,048,029 =Foundation Aid $ 4,407,939 STATE AID 46.7% VOC. 1.3% (16) CBRSD 52% 13 (895) CBRSD VOC STATE AID
Calculating Chapter 70 Aid 635 Central Berkshire Districts are held harmless to • Aid Calculation FY18 the previous year’s level of aid. Prior Year Aid 1 Chapter 70 FY17 8,629,219 In FY18, “minimum aid” is • Foundation Aid 2 Foundation budget FY18 16,708,895 also available. 3 Required district contribution 10,559,439 FY18 4 Foundation aid (2 -3) 6,149,456 District receives at least $20 • 5 Increase over FY17 (4 - 1) 0 per pupil in additional aid over Minimum Aid FY17 (237 operating districts). 6 Minimum $20 per pupil 32,460 increase FY18 Chapter 70 Aid 14 9 sum of line 1, 5 minus 7 8,661,679 1/25/2017
Chapter 70 Website http://www.doe.mass.edu/finance/chapter70/ Chapter 70 State Aid and Spending Requirement 01/25/2017 FY18 Preliminary Chapter 70 Aid and Net School Spending Requirements 15 1/25/2017
Chapter 70 Contact Info • Melissa King, 781-338-6532 mking@doe.mass.edu 16 1/25/2017
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