FY18 Chapter 70 Aid Preliminary House 1 Proposal January 25, 2017 - - PowerPoint PPT Presentation

FY18 Chapter 70 Aid

Preliminary House 1 Proposal January 25, 2017

Goal of the Chapter 70 formula

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• 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.

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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)

• All districts receive at least $20 per pupil in additional aid over the prior year. (CBRSD receives
• $32,460 for 1623 foundation students)

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Chapter 70 aid is determined in three basic steps

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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

• f the community.

3. The remainder is funded by Chapter 70 state aid. Local Contribution + State Aid = a district’s Net School Spending (NSS) requirement. This is the minimum amount that a district must spend to comply with state law.

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Foundation budget rates reflect differences in the cost of educating different types of students.

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5 CBRSD = DECILE 7; ECONOMICALLY DISADVANTAGED

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.

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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.

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635 Central Berkshire

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Pre- 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 51 114 519 413 543 8 60 16 508 1,623 1 Administration 9,386 41,957 191,013 152,001 199,846 2,944 152,409 40,642 790,197 2 Instructional Leadership 16,951 75,778 344,990 274,529 360,943 5,318 1,078,509 3 Classroom and Specialist Teachers 77,723 347,469 1,581,876 1,107,749 2,141,804 36,723 502,911 1,613,708 7,409,961 4 Other Teaching Services 19,934 89,118 405,723 232,407 254,385 5,001 469,561 621 1,476,750 5 Professional Development 3,074 13,748 62,602 54,004 68,842 1,306 24,260 35,514 263,350 6 Instructional Equipment & Tech 11,250 50,291 228,957 182,195 383,277 3,529 21,175 880,673 7 Guidance and Psychological 5,655 25,284 115,109 121,930 200,953 2,362 471,293 8 Pupil Services 2,249 10,059 68,690 89,282 270,686 1,059 442,025 9 Operations and Maintenance 21,583 96,487 439,271 378,965 483,107 9,166 170,248 249,230 1,848,058 10 Employee Benefits/Fixed Charges 21,154 94,568 430,558 334,772 413,744 8,020 195,581 163,805 1,662,201 11 Special Ed Tuition 385,878 385,878 12 Total 188,958 844,760 3,868,787 2,927,834 4,777,585 75,427 1,536,146 427,141 2,062,256 16,708,895 13 Wage Adjustment Factor 100.0% 10,295 Foundation Budget per Pupil

• ----- Kindergarten ------

Massachusetts Department of Elementary and Secondary Education

Office of School Finance

FY18 Chapter 70 Foundation Budget

• ------------------------------------- Base Foundation Components -----------------------------------------------------------
• -- Incremental Costs Above The Base ------

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)

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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.

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Step 3: Calculating Chapter 70 Aid

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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

Key Factors in School Funding Formula

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Foundation Budget

• Enrollment
• Wage Adjustment

Factor

• Inflation

Local Contribution

• Property value
• Income
• Municipal Revenue

Growth Factor

These six factors work together to determine a district’s c70 aid.

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Districts receive different levels of Chapter 70 aid, because their community’s ability to pay differs #’s related to CBRSD

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1,640,055 636,740 4,920,058 1,742,741 487,594 441,236 691,015 509,390 154,094 4,296,196 356,010 607,406 85,986 140,374 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % Net School Spending Local Contribution State Aid

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Example: Town of Becket

Calculating Chapter 70 Aid by Town

Foundation Budget – Required Local Contribution = Foundation Aid FOUNDATION ENROLLMENT = 220 FOUNDATION BUDGET =$2,322,250

• required contribution -$1,771,907

=Foundation Aid $ 550,343

CBRSD 70.6% (209) VOC. 5.7% (11) STATE AID 23.7% CBRSD VOC STATE AID

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Example: Town of Dalton

Calculating Chapter 70 Aid by Town

Foundation Budget – Required Local Contribution = Foundation Aid FOUNDATION ENROLLMENT = 911 FOUNDATION BUDGET =$9,455,968

• required contribution -$5,048,029

=Foundation Aid $ 4,407,939

CBRSD 52% (895) VOC. 1.3% (16) STATE AID 46.7% CBRSD VOC STATE AID

Calculating Chapter 70 Aid

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• Districts are held harmless to

the previous year’s level of aid.

• In FY18, “minimum aid” is

also available.

• District receives at least $20

per pupil in additional aid over FY17 (237 operating districts).

635 Central Berkshire Aid Calculation FY18 Prior Year Aid 1 Chapter 70 FY17 8,629,219 Foundation Aid 2 Foundation budget FY18 16,708,895 3 Required district contribution FY18 10,559,439 4 Foundation aid (2 -3) 6,149,456 5 Increase over FY17 (4 - 1) Minimum Aid 6 Minimum $20 per pupil increase 32,460 FY18 Chapter 70 Aid 9 sum of line 1, 5 minus 7 8,661,679

Chapter 70 Website http://www.doe.mass.edu/finance/chapter70/

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Chapter 70 State Aid and Spending Requirement 01/25/2017 FY18 Preliminary Chapter 70 Aid and Net School Spending Requirements

Chapter 70 Contact Info

• Melissa King, 781-338-6532

mking@doe.mass.edu

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