Local Aid in the Governor's Budget

Overall, the Governor’s proposed budget for Fiscal 2015 invests only lightly in new local aid. It does sustain or increase aid in all major categories.

  • Unrestricted General Government Aid is level funded.
  • Chapter 70 school aid increases only 2.3%.
  • UGGA, Chapter 70 and the other 12 smaller local aid components included in the “Cherry Sheet” accounting together rise only 1.7%.
  • The Special Education circuit breaker, which is a special program flowing outside the “Cherry Sheet” accounting for local aid, is level funded at last year’s relatively healthy level.

Click here for details for my communities and neighboring communities. It is unlikely that the legislature will go below the Governor’s budget on the local aid amounts as the process moves forward — given that these numbers are fairly low and the economy is fairly healthy, it is reasonable to treat them as a floor for local budget planning purposes. Speaker DeLeo assured municipal officials on Friday that the House aid budget would be higher, although it remains to be seen how the numbers will work for individual communities.

I do appreciate that, within a limited investment, the Governor has made an effort to address the situation of communities that have not received their fair share under the education aid formula.   As a result, Belmont and Watertown do relatively well, each receiving Chapter 70 school aid increases of approximately 10%.   Total Cherry Sheet local aid  increases 4.4% for Watertown and 7.0% for Belmont.   Boston’s total Cherry Sheet local aid increases only 0.3%.  Arlington and Cambridge are also close to flat, although Cambridge may do better after charter school tuitions and reimbursements are finalized.

Under the 2006 education aid reforms, it was agreed that all communities should receive a target level of education aid inversely proportional to their taxable property and personal income per capita.  A new formula based on that concept was designed to replace a more complex formula — a formula that was widely perceived as broken.  Additionally it was agreed that all communities should receive aid equal to at least 17.5% of their foundation budget.  

Many communities were below the new target aid levels and the legislature and governor planned a five year schedule to bring below-target communities up to the new targets.   The aid for below-target communities was called “Down Payment” aid.   However, the schedule was suspended with the recession from Fiscal 2010 through 2013.    Watertown has been funded well below the 17.5% level for many years, bouncing along between 12 and 14%.   Belmont has approached but remains slightly below the 17.5% level.   Arlington and Boston are well above target.  Prosperous Cambridge remains well below.

Over the past couple of years, Representatives Hecht and Lawn and I have met with administration and legislative budget officials on multiple occasions to advocate for increases for under-target communities, Watertown especially and to a lesser extent Belmont and Cambridge.  Partially in response to our advocacy, in Fiscal 2014, the legislature included a new formula element — “Target Aid”, targeted to the most out-of-line communties, which yielded $326,284 for Watertown.  Read my analysis of the mechanics and history of Chapter 70 for a perspective on how we got to where we are or visit the Chapter 70 page of the Department of Elementary and Special Education for the full details of all the computations.

We continued our advocacy on this issue through the fall. In his budget proposal, the Governor resumes progress on the down payment aid schedule, a significant step in the right direction.   Overall, the Governor proposes to increase Chapter 70 aid by $99.1 million dollars — an increase of 2.3% over the FY14 level of $4.3 billion.   That $99.1 million breaks down as follows:

  • $73.5 million to fund increases required under the old broken formula.
  • $11.6 million to assure that all communities get at least some increase, based on $25 per pupil.
  • $14.5 million in down payment aid to bring communities closer to the amounts required under the new formula.  For each community, that amount is computed as 35% of the gap between what communities received in FY14 and what their target for FY15 should be, but is only paid to the extent it exceeds what their increase under the old formula is.

Belmont and Watertown do not actually benefit from the Down Payment aid, because the Governor tweaks another important element in a complementary way that helps them. He adjusts the “Effort Reduction” percentage.   Under the old formula, Foundation Aid is computed as Foundation Budget less Required Local Contribution.  The Foundation Budget is an estimate of the baseline cost of education for a district — to most observers an inadequate estimate, but that’s another story.  RLC is a complex chained quantity — the complexity of the RLC is the reason that the old formula is so inaccurate. In 2006, in addition to creating Down Payment aid, the legislature added an Effort Reduction schedule to bring communities whose RLC was too high down to the new target level.  As in the case of the Down Payment schedule, that Effort Reduction schedule was not followed through the recession.  The Effort Reduction percentage in the recession years was small — only 15% last year, for example.   This year the Governor put the effort reduction at 50%, the highest level ever.  This 50% effort reduction increases Watertown’s Chapter 70 aid by $695,498 and Belmont’s by $177,932. Watertown’s actual bottom line increase is diminished to $406,155 because the Governor does not continue the target aid program. Belmont also benefits from a 4.9% increase in Foundation Budget.

The Down Payment Aid and Effort Reduction complement each other — one reduces the need for the other. If both are set to zero in the aid model, total aid is reduced by $25 million. To access the current aid model and experiment with parameters, visit DESE’s FY15 Chapter 70 page and download the Complete Formula Spreadsheet. In Excel, select Format>Unhide and unhide the parameters sheet. The chart below comes from that sheet of DESE’s model. The red bars show the total gap for below-target communities all across the state, while the blue bars show the total by which aid exceeds target levels in above-target, grandfathered communities across the state.

The chart shows that overall — as a result of the Down Payment aid and the Effort Reduction — the total gap statewide for communities with above target effort (or, same thing, below target aid) is $49.4 million. This is the lowest gap since the 2006 reforms. Although I’d like to see us close the gap completely, at a cost of $49 million, I appreciate the progress.

For more details on how the components of the aid formula compare to prior years, click here.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

2 replies on “Local Aid in the Governor's Budget”

  1. What I don’t follow is how this relates to amount of $ per student in the end…and how business taxes per local community are taken into account. Cambridge, Burlington and Waltham can take care of many local funding issues using their business taxes while communities which are mainly residential such as Belmont, Arlington and Lexington don’t have access to those kinds of revenues. Thanks…

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