My Turn/Singleton: Chapter 70 the real culprit

While not perfect, misconceptions abound on school state aid

  • Busses wiat for the new school years to start on Rt 2 in Shelburne. Recorder/Paul Franz PAUL FRANZ

  • Singleton

Published: 4/3/2016 4:52:53 PM

Mohawk and other rural schools share enrollment drop, rising costs” reads The Recorder headline of March 24.

The central argument about the problems of school finance in the region, primarily articulated by Mohawk Superintendent Michael Buoniconti, is that:

First, rural districts are plagued by declining enrollment and second, sparsely populated rural schools do not receive enough state aid because the state formula (Chapter 70) is biased toward more densely populated districts.

As a former member of the Montague Finance Committee and the Gill-Montague School Committee, I share Mr. Buoniconti's concerns about declining enrollment and inadequate state aid. However, I do not believe his analysis is consistent with the historical data on school finance and his solution does not pay close attention to the real problems of the state aid formula

First of all, a number of large urban districts in the eastern part of the state have exactly the same problem Buoniconti has identified — declining enrollment and flat chapter 70 aid. For example the City of Somerville received approximately $24.3 million in Chapter 70 aid in 2002. In Fiscal Year 2016, the city received $19.7 million, a decline of nearly 20 percent. Why? The answer they hear is “declining enrollment.”

Boston is faring a bit better than Somerville but not much. Its Chapter 70 has increased by just over 3 percent over the past 15 years, essentially flat.

What is this problem that some dense and sparse districts share? In my opinion it is a core problem of the Chapter 70 state aid formula that has gone largely unnoticed.

The formula is based on funding something called a foundation budget. This is a basic budget for each school district that was created in 1993 and has been updated each year since for changes in enrollment and inflation. The formula assumes that this budget is funded by a local contribution (also called a “minimum contribution”) and state Chapter 70 aid. So ...

Foundation Budget equals Minimum Contribution plus Chapter 70 and thus ... Chapter 70 equals Foundation Budget minus minimum contribution.

Essentially the state calculates a foundation budget for each district and then subtracts a minimum (local) contribution to calculate Chapter 70.

There have been a litany of complaints about this formula over the years. Buonoconti is correct that the rates used to calculate the foundation budget are not well suited to rural schools. A more common critique is that the foundation budget has not kept up with inflation. A legislative commission called the Foundation Budget Review Commission has recently proposed a significant increase in the foundation budget to address this problem.

I believe that these critiques, while valid, ignore a deeper problem. The formula significantly exaggerates the role of enrollment in calculating annual changes in the foundation budget. It assumes that if you lose 10 students and your foundation budget averages $10,000 per student, then the budget should be $100,000 lower than it would be if you had not lost those students. This is not realistic.

Yet the local contribution is barely affected by enrollment. It is primarily a measure of local wealth. The result is that state aid becomes highly dependent on enrollment but the local contribution is barely influenced by it.

This is a double standard with a mathematical consequence. If you are one of the many districts with declining enrollment but relatively stable or increasing local wealth, your theoretical Chapter 70 tends to decline over time.

But there is another key factor in this mix. I said your “theoretical” Chapter 70 goes down because in reality the state does not allow it to go down. Even if the formula says your state aid should be cut, the state gives you the same amount that you got last year plus a small additional amount per student. This is called “hold harmless.”

“Hold Harmless” is much better than having state aid constantly cut, but it has some very negative consequences. First is that it creates the impression that, despite flat Chapter 70 for 15 years, many districts are getting “more than they deserve.”

Secondly, getting more than they deserve also means you can fix the formula to more adequately calculate the foundation budget, as the Review Commission advocates, or tweak it to be fairer to rural districts, but many districts will get no increase in Chapter 70 because last year's state aid still covers this year's calculation. For others, the reforms will produce outcomes wildly varying between districts.

Adjusting the internal elements of the formula to benefit this or that class of districts has a bad history of producing unexpected and irrational results. The legislature will spend a lot of time and energy “fixing the formula” but in the end everyone still complains.

I fear Superintendent Buoniconti's analysis and strategy fit into this tradition. His strategy may also divide us from potential allies in the eastern part of the state. We should continue the discussion about education finance in rural districts but pay closer attention to the data and the real flaws in the Chapter 70 formula.

Jeff Singleton, a former member of the Montague Finance Committee and the Gill-Montague School Committee, lives in Montague.


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