Overall, state aid to schools is inadequate and, although the current distribution formula works out well for Belmont and Boston, it is unfair to many communities, including Watertown. I hope we can pass the “millionaire’s tax” this November and use the proceeds to increase school aid under a simpler, more rational formula.
The state distributes approximately $5 billion annually in unrestricted aid for local schools, known as “Chapter 70” aid, covering on average roughly 1/3 of total local school costs. Aside from MassHealth, unrestricted local school aid is the single largest item in the state budget — roughly 20% of state tax revenue.
The starting point for allocation of aid is the so-called “foundation budget”. The foundation budget is an estimate of the minimum costs of running schools in a particular community, based on the number and particular needs of the students in the community.
The state computes the share of a community’s foundation budget that it will support based on a formula that is adjusted each year. The formula has grown more and more complicated as a result of repeated compromises.
Watertown, Belmont and Boston are all among the more affluent communities in the state measured by either income or property values. Under the 2006 revision of the aid formula, they should all be getting the minimum aid allocation of 17.5% of their foundation budget. This guaranteed minimum was a victory for more affluent communities, many of which were getting even less than that under the old formula.
Boston is well above that level, at 26% of its foundation budget. Its aid is based on a formula term that grandfathers historic aid and on another term that provides minimum increases. From a community wealth perspective, it would appear that Boston is getting a generous award.
However, among the three school districts, Boston has by far the neediest students — 58% of its students are economically disadvantaged, as compared to 24% in Watertown and 8% in Belmont. It has the lowest percentage of students achieving “advanced” or “proficient” MCAS scores — only 27%, as compared to 48% in Watertown and and 81% in Belmont. The annual high school dropout rate is 5.5% in Boston as compared to 2% in Watertown and 0.1% in Belmont.
One of the key findings of the Foundation Budget Review Commission was that it takes more effort than we thought to close the achievement gap. We need to offer longer school days, wraparound services, and other resource intensive strategies to raise achievement among students from less advantaged homes.
A foundation budget computation that better reflected the needs of disadvantaged students would raise Boston’s foundation budget much more than it would raise other communities’ foundation budgets. It would reveal Boston’s high grandfathered aid level to be more consistent with Belmont and Watertown aid levels and with the statewide minimum aid standard.
The direct comparison between Belmont and Watertown highlights the unpredictable consequences of the overly complex distribution formula. Watertown is less wealthy than Belmont on an income basis and on a property value basis. And even though it has a strong commercial base to carry some of the cost of services, it has a higher ratio of residential property taxes paid to income than Belmont. By every measure its students have greater educational needs than Belmont students. Yet, compared to Belmont, it receives less aid, less aid per student and less aid as a percentage of foundation budget under the Governor’s proposal. See this post for the basic aid amounts and see this spreadsheet for the comparison details.
Watertown has chosen to accept a relatively high volume of development which yields fiscal benefits and some congestion downsides. The development creates “new growth” in Watertown’s assessed value, which in turn gives Watertown a relatively high “municipal revenue growth factor”. The MRGF in the state aid formula drives up the required local contribution, so driving down the aid. See the complete formula spreadsheet on DESE’s Chapter 70 page. Belmont has chosen less new growth, but, instead has passed overrides. Overrides are excluded from the MRGF calculation, so Belmont has received better state aid increases. A simpler formula which just looked at actual wealth would be fairer.
We need to fix the foundation budget which will raise aid to all communities. At the same time we need to simplify the distribution formula. If the voters raise the income tax on very high earners at the ballot this fall, we’ll have the resources needed to increase and simplify school aid.
Keep up the good fight. Any money increase you get get for Boston Public Schools would be very appreciated!
Great memo Will,
It’s wonderful to have you here.
Dick
Is it not at all surprising that the most poverty is in areas with the most single mothers. Studies show that single moms have the highest poverty rates.
Maybe just maybe we can try to help bring back families and dads into kids lives.
Pass out of the Judiciary Committee House Bill 3090 and help to start to bring dads back into kids lives.
Maybe just maybe it will help to put a dent into the poverty rate of Boston and other communities.
Interesting conclusion, could you expand on your thinking? A single parent is a family(they may not be divorced/separated). I do agree, having as many supportive parents/people involved in the best interest of a child, should help achievment . But I would want to clarify your statement in that with lack of family support(in what ever form, Mother, Father, Grandparent…)there may be some corrleation to achievement vs the fact that there is a single mother and therefore lower achievement. I personally think this is a more complex issue with many cause/affects. I do empathize with any parent(mother or father… who can not be actively involved in their child’s lives. Possibly this is the issue? Bringing supportive families together is a worthy cause, but again a Single Mother is a family. Full disclosure, I’m a single Mother with a wonderful kid who is doing just fine. She has support from Me/Her immediate family and loads of friends.
I think the gas tax is an outmoded tax. With ever more fuel efficient tax it is better to move away from a gas tax and change it to a mileage tax. Fuel efficient cars use the roads too and will no longer be paying their fair share. Have people do estimates on mileage for the tax as with many taxes and than they are gotten a bill after they have their cars inspected and can pay by the mile. Some sort of system like this needs to be adopted soon. Gas tax is a dying tax.
Kate. A single mom is a family and I am glad you have the support you need and have a great kid. You are the outlier for the statistics in terms of what happens to most single moms. They do live more in poverty than the average.
Correlation of single mothers with poverty yes.. Causation? Not at all. “Conservatives have used this data to argue for the importance of marriage in lifting women and children out of poverty, as if the shortage of stable husbands were the source of the problem rather than one of its side effects.”
It’s true that marriage can bring stability and emotional benefits to the children of middle- and upper-class families. But that’s not because the institution of marriage itself is universally beneficial. It’s because certain kinds of marriages are beneficial, such as those between adults who don’t have to worry about getting evicted, who can afford to pay their medical bills, who don’t contend with the surrounding stresses of violence or joblessless or having to get to work without a car.”
I’ve seen the effects of small amounts of money for court fees and bail destroy families. I’ve seen single mothers who have no “father” to safely step in. And they were White.. Just as the typical welfare recipient is white, I fear I’m reading yet again, a blame game veiled as just pull yourselves up by your boot straps.
I never spoke of Black or White in poverty. Just single moms and poverty. The statistics are irrefutable.
Passing House Bill 3090 is not the only solution to the problem but it could help.
There are other reforms on the Federal Level that should be done to help bring back dads into kids lives and not have incentive for them to run away.
Stop taking their drivers licenses and professional licenses away if they can not afford their child support and stop putting them in jails and stop destroying dads.
In 2016 there were over 500 suicides and they vast majority of those are middle aged and elderly men. It is no accident and it is a public health crisis.
I read the bill carefully before responding.. What do you think is different about this bill from what we have? I read it as a time wasting moral weigh in.
When you claim that you weren’t talking about race frankly you were.. Unless you haven’t read and researched your comments.
Thank you, Will, for clarifying this complex and essential subject. Sharon Bauer, Watertown
Education is so important to everyone. It really can be the key to a productive and profitable life. We should do all we can to support education and give everyone the chance they deserve. Thanks, Will for your efforts on education support for all.
Will the millionaires tax do much? We should rethink the tax burden to tax beneficiaries alignment. The gas tax is a fair way to pay for roads because the users are paying and proportionately benefiting. Paying for higher education, business should be taxed because they benefit from a trained workforce and higher wages are captured through income tax. Now about public school; The communities should be paying for the physical grounds buildings and utilities. The state should be on the hook for instructional costs such salaries and benefits. This causes the big disparity between communities as well as the undue burden on senior citizens who do not benefit but pay disproportionate property tax load.
I think the gas tax is an outmoded tax. With ever more fuel efficient tax it is better to move away from a gas tax and change it to a mileage tax. Fuel efficient cars use the roads too and will no longer be paying their fair share. Have people do estimates on mileage for the tax as with many taxes and than they are gotten a bill after they have their cars inspected and can pay by the mile. Some sort of system like this needs to be adopted soon. Gas tax is a dying tax.
The millionaire’s tax will raise $2 billion — a very significant budget impact: Our total budget is about $40 billion.
I strongly support the effort to revise the foundation budget and distribution formulas so that communities with less well-off residents and students with greater needs can receive a larger, more appropriate share of the state aid to education. I also agree with the effort to increase taxes on high earners to pay for increased aid to education in the Commonwealth.
Thank you for this valuable analysis.
Kate. I am glad your son is doing well. You are the outlier statistically. Single moms have the highest poverty rate in the nation. I am glad you do have the support you need. Others are not so lucky. Thus an effort to keep dads in kids lives would benefit potentially many others.
Thanks for this documented analysis providing us the mean to grow as citizen.
Thanks for the analysis. It really helps in avoiding comparisons that aren’t real.
I think the state should pay for the entire cost of education and allow the towns to administer it.
The state income tax should be made progressive and pay for all education This would greatly decreasing the real estate tax.
The state income tax would become somewhat progressive as a result of the “millionaire’s tax.
We would have to increase it much more dramatically to replace all local resources for education — that isn’t something people are really talking about doing.
I now have an idea about the complexity of school/town funding. I applaud your communication to us and your goal to change the formula. We need equity in schools across communities to raise up all children. All schools should have the best resources for kids. This is a base line societal issue. We must pass the Fair Share Amendment this Fall. In the future a Progressive Tax!
Yes pass more and more taxes. We can not tax ourselves out of problems. Maybe spending less and cutting the outrageous pensions the state gives people like Billy Bulger at 325,000 dollars a year.
Then maybe the state would gave a bit more money to go around
There aren’t a lot of Billy Bulgers.
While this is on criminal justice and not on education, the FY19 budget Baker is proposing has about $10,000,000 for a new class of corrections officers (200 or so), despite a decline in folks incarcerated, but only $375,000 for programs for the incarcerated or those in pre-trial. Where is the re-entry money, education money, drug
rehabilitation, etc. money for the them?
Please work on this in Ways and Means…
Will do — agreed we need more programming.
I am a retired teacher and resident of
Watertown, though I did not teach there.
I am alarmed at the low 48% advanced or
proficient scores on MCAS in Watertown.
And yet we get such a small per cent
of the “pie”… Doris Webb
These statistics are amazing, Will. We are lucky in Belmont, but I do think Watertown deserves a fairer share.
I support raising the income tax on very high Earners. But Trump is undermining that. Can Massachusetts accomplish taxing the high earners on its own? Can it avoid Trump’s tax plan?
Anne Covino Goldenberg
We’ll find out. The proposal is modest.
Thank you for your thoughtful analysis. I would strongly urge you to lobby your colleagues who are on the Education Committee to report out Sen. Chang-Diaz’s S.223 and its companion S.220 to ensure that the state is providing sufficient funding to public schools. The funding formula is over twenty years old, and like many policy ideas from the mid-1990s, it’s now outdated.
Strongly support S223!
I agree with your analysis. A have seen a similar analysis for Worcester. The so-called millionaires’ tax (a very poor name as the proposed tax relates only to income of more than a million or more and not to wealth of a million or more) is needed to adjust those inequities.
Ed Woll
Thank you very much for this analysis.