Baker: Fed $$$ Help State Keep School Aid Promises
Budget Woes Pose Instant Challenge to School Funding Law
10/15/20 5:02 PM
OCT. 15, 2020....The revised spending plan that Gov. Charlie Baker announced Wednesday includes $5.28 billion in state aid to local schools, a funding level that clocks in at roughly $108 million more than was allocated last year and $196 million less than he proposed in his original January budget before the economic downturn.
The Baker administration described the new, $45.5 billion budget as one that "protects education funding" at a time when it is now projecting state tax revenue collections for this year to land $3.6 billion below initial estimates.
The amount of school aid in the new budget is not a surprise -- it's in line with a commitment Baker and lawmakers made earlier in July to keep aid to cities, towns and school districts equal to last year's levels, plus another $107 million to schools to cover inflation and enrollment factors.
As the budget moves through the legislative process, its education pieces could also prompt amendments from lawmakers who, less than a year ago, approved major school finance reform legislation intended to steer $1.5 billion to K-12 schools over seven years.
That law, known as the Student Opportunity Act, changes the school funding formula to better account for costs associated with special education, employee health care, and teaching low-income students and English language learners.
Signed on Nov. 26, 2019, it includes a provision stipulating that its funding formula changes "shall be fully incorporated" in the state budget by fiscal 2027, and that in every year leading up to 2027, the budget "shall increase foundation and increment amounts over the prior fiscal year in an equitable and consistent manner."
The interpretation of "equitable and consistent" and the way new money would be phased-in were shaping up to be flashpoints in the budget debate, before the COVID-19 outbreak ballooned to a scope that redirected state government's attention almost entirely to the public health crisis and put the budget development process on hold for months.
This year was intended to mark the first year of the funding overhaul's gradual implementation, and Baker's revised budget would postpone that.
The budget Baker filed in January, which he said at the time would "fully fund" the first year of the Student Opportunity Act, proposed to boost Chapter 70 school aid by $303.5 million, or 6 percent, over fiscal 2020 levels. The $108 million hike in the updated budget filed this week represents a 2 percent increase.
Baker has said that when federal money -- including COVID-19 relief funds that support pandemic-related expenses -- is added in, districts will ultimately receive more money than they would have under his January budget. They're also incurring new costs that go beyond traditional classroom needs, for things like personal protective equipment, increased sanitation and remote learning technology.
"After recognizing the significant level of federal funding that was made available to districts, year-over-year K-12 education spending is more than what was originally proposed in our budget from January, which fully funded the first year of the Student Opportunity Act," he said Wednesday. "We're particularly proud of this achievement. A lot of people rightfully worried that with the passage of the landmark education funding bill, we wouldn't be able to meet those obligations."
Baker said the administration would "continue to work with our colleagues in the Legislature and others going forward to make sure that we continue to live up to our commitments" around education funding. He declined to discuss the prospects for future years' implementation.
"I'm not going to speak to fiscal '22 today," Baker said. "I mean, there's a lot of work to be done associated with that one, and obviously we'll probably be standing here and talking to you about that when we file our budget in January."
The pandemic has thrown at least one of the new law's dates off-track so far. Districts were originally slated to submit to the state by April 1 a three-year plan outlining steps they would take to address "persistent disparities in achievement among student subgroups." As schools tackled first the abrupt transition to remote learning last spring and then focused on developing and implementing reopening plans, that deadline was pushed back and is now set for Jan. 15, 2021.
The Massachusetts Taxpayers Foundation -- which flagged Chapter 70 school aid as one of the few line items to increase over last year in a revised budget it described as "not as austere as some would have anticipated" -- said there is approximately $440 million in one-time federal CARES Act funding to help schools offset new costs.
The foundation's analysis of the budget also cautioned of "a more challenging year" ahead in fiscal 2022, when some of the revenues relied upon this year cannot be replicated.
"On the spending side, yearly hikes in non-discretionary spending for MassHealth, Chapter 70, and pensions typically grow by $1 billion," the MTF analysis said. "Factor in the cost increases to pay for the Student Opportunity Act reforms as well as annual inflationary costs and collective bargaining agreements that add hundreds of millions in costs, and the state will likely confront another multi-billion shortfall with fewer resources than in FY 2021."
Discussing school funding during a Thursday webinar hosted by MassINC, Rep. Aaron Vega, a Holyoke Democrat who sponsored one of the bills that was incorporated into the Student Opportunity Act, acknowledged some worry about how the implementation schedule would be affected by the current fiscal climate.
Vega is not seeking re-election, and said that his aide, Patricia Duffy, who is on track to succeed him in the House, has already told House Speaker Robert DeLeo that the Student Opportunity Act is "her number one priority."
"We're worried that with this budget currently, and how we're going to make these investments, and if we fall behind on that seven-year pledge, where will we be?" Vega said as he accepted a "Gateway Cities Champion Award."
Last week, as budget writers heard updated revenue projections from economic experts, the Fund Our Future Campaign, which had advocated for school finance reform, released a statement calling on lawmakers to fully implement the Student Opportunity Act as a way to stand by the promise they made "to low-income students, students of color and English learners, who had been left behind for years by an outdated school funding system" despite the challenges presented by the COVID-19 pandemic.
"State budget cuts, or the failure to deliver the resources promised by the Student Opportunity Act, would pour salt on the wounds of students who need even more support during this generational crisis," the group's statement said.
Baker's budget does not propose new taxes, and he said Wednesday he would veto tax hikes if the Legislature pursues them.
The Fund Our Future statement recommended that lawmakers raise taxes, particularly on "large corporations and wealthy investors who are accumulating sky-high profits during the pandemic" and invest those revenues in K-12 and higher education.
The administration said its updated budget includes $1.298 billion for the Department of Higher Education, University of Massachusetts system, state universities and community colleges, for a $14.8 million or 1.1 percent increase over fiscal 2020. Baker's January budget had proposed $1.316 billion, including $566 million for UMass.
The new spending plan funds the UMass line item at $560 million, up from the $558 million in last year's budget. UMass President Marty Meehan said he would work "with the House and Senate to sustain this level of funding as the budget process moves forward."
"This is especially critical as COVID-19 will likely continue to present financial challenges in the spring semester," Meehan said in a statement. "By level-funding our state appropriation, which makes up about one-quarter of our operating budget, the Governor is sending a clear message that a strong UMass is critical to the futures of our 70,000-plus students and the Commonwealth's post-pandemic economic recovery."
Last month, Meehan said the UMass campuses were faced with "very tough expense reductions" to address an anticipated $335 million budget shortfall. University finance officials tallied those cuts at about $291 million, including $40 million from 141 permanent layoffs and 1,616 indefinite furloughs.
Meehan said at a September trustees meeting that UMass officials were lobbying for level-funding from the state but suggested that cuts were possible. He said the school expected multiple years of financial challenges arising from the pandemic.
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