WORCESTER – Last week, the Massachusetts legislature held hearings as to a number of education-related bills pending before it.

While all are receiving some attention on Beacon Hill, none have a greater potential impact on education, and on the public school children of Massachusetts, than implementation of the recommendations of the Foundation Budget Review Commission, which was the topic of a hearing during July.  

The work of the Commission – which took place during 2014-2015 – addressed the key formula used to ensure adequate funding for public education throughout the Commonwealth.

Worcester School Committee Member Brian O’Connell

The formula was implemented through the Education Reform Act of 1993 – the same year the state Supreme Judicial Court ruled, in McDuffy v. Secretary of the Executive Office of Education, “that the Commonwealth was not providing to children in less affluent communities the education to which Part II, Chapter 5, Section 2, of the Massachusetts Constitution entitled them.”

Twenty-two years later, the Commission concluded that “some of the assumptions contained in the formula for calculating the foundation budget have become outdated” in critical areas.  In these areas, the gap between actual spending by districts statewide, and the sums calculated as sufficient by the foundation budget, had grown to as much as $2.1 billion. The gap arose in the following five key categories:

Employee Health Insurance. The Commission found that district spending on this insurance “exceeds the foundation budget allotment by more than 140%. This is primarily due to the dramatic growth in health insurance costs nationwide and the fact that such costs have increased at a significantly higher rate than the rate of inflation used to adjust the foundation budget.”  In Worcester, for example, the public schools spend almost twice the amount for employee health insurance included in the foundation budget – a gap of $29.1 million as of 2015-16! The Commission recommended adjustment of the formula to reflect the average rates of the Massachusetts Group Insurance Commission (GIC) – the state agency which offers health insurance to the employees and retirees of the Commonwealth – and use of an inflation factor in the future which tracks increases in the GIC rates as well. It also proposed inclusion of an additional component for retired employee health insurance – a component not currently recognized in the foundation budget.  

Special Education. The Commission concluded “that the foundation budget understates the number of in-district special education students and the cost of out-of-district special education”.  Here again, the Worcester Public Schools spends almost twice the amount included in the foundation budget for special education – an additional gap (2015-2016) of $29.8 million!  The Commission proposed increases in the number of assumed in-district special education students to a figure reflecting current reality, and it urged that the formula “increase the out-of-district special education cost rate to capture the total costs that districts bear before circuit breaker reimbursement [state partial reimbursement for these costs] is triggered.”

English Language Learners (ELL). The Commission noted that many such students “have serious social and emotional needs, and arrive at school with little to no formal education for school districts to build upon.” It suggested a new increment to the foundation budget to account for the increased funds needed to educate these students, and it proposed application of this increment to ELL students in vocational programs as well. These recommendations would provide Worcester, cumulatively, at least $5 million in additional support.

Low Income Students. The Worcester Public Schools, joined by other districts, testified to the Commission as to the increased costs of educating students from economically challenged backgrounds. “Worcester school officials presented evidence that their successful efforts at turning around [a] Level 4 [academically struggling] school cost about $2000 more per student than other schools in the district received.” Were this $2,000 increment factored into the formula, for economically disadvantaged students, the Worcester Public Schools could receive approximately $20 million in additional support. The Commission recommended a significant increase in “the increment for districts with high concentrations of low income students”, and it urged that the new increment “should provide high poverty school districts with enough funding to pursue several turnaround strategies at once.” The Commission noted that the methods used to determine “economically disadvantaged” students should “properly and accurately count all economically needful students.”

Inflation Factors. The Commission found that, during the “Great Recession” (the 2010 fiscal year), the state had applied an inflation factor which was from a different quarter – with a lower factor – than that required by statute. This exacerbated the gap between funds needed by school districts and funds provided them through the foundation budget as applied. An inflation factor adjustment could provide the Worcester Public Schools with up to $9 million in additional support.

Implementation of all of the Commission’s recommendations could add approximately $93 million to the resources available to the Worcester Public Schools to educate its children. The cumulative cost is obviously the major obstacle to full adoption of the Commission recommendations by the Commonwealth. As Senator Sonia Chang-Diaz, Senate Chair of the legislature’s Joint Committee of Education (and a co-chair of the Commission), concluded, many assumptions behind the formula “are now outdated, hampering districts’ efforts to provide students with a quality, well-rounded education.” However, the passage of time creates a risk that the report – a truly thoughtful and realistic analysis of the costs inherent in educating Massachusetts children – may be marginalized, neglected, forgotten or ignored. Yet, during the two years since issuance of the report, the discrepancies between the current funding formula, and the economic reality of education costs, continue to grow.  The Worcester School Committee has taken a lead here in Massachusetts, proposing a resolution urging implementation of the Commission report, which will be presented to the Board of Delegates of the Massachusetts Association of School Committees in November.  

Senator Chang-Diaz has introduced as lead sponsor – joined by the entire Worcester legislative delegation – Senate Bill 223 (Senate Docket 1905) – “An Act Modernizing the Foundation Budget for the 21st Century” – which would lead to development of an “implementation schedule” for key recommendations of the Commission over several years. The schedule would be open to review and revision, and it would be “subject to appropriation”. It makes no binding fiscal promises. However, her bill seeks to start a process to bring the Commission’s recommendations into effect, ultimately, through creation of a revisable timetable which takes into account the fiscal challenges confronted now by the Commonwealth and by many of its residents.  

Clearly, those concerned about the well-being of public education students, in Worcester and throughout the Commonwealth, have a critical interest in this topic as legislative discussion of educational proposals continues.

About Brian O'Connell, Worcester School Committee

Brian O’Connell is a member of the Worcester School Committee. An attorney, he is a graduate of the College of the Holy Cross, and of Harvard Law School. He is the Chief Financial Officer / Business Manager of the Haverhill Public Schools. He is also Secretary of the Board of Trustees of Worcester Academy, Chair of the Audit Committee of the Academy, a member of the Board of Trustees of Anna Maria College, Chair of the Finance and Audit Committee of the College, and Past President and current member of the Board of Directors of the Holy Cross Alumni Association. He is Past President, a Life Member and member of the Resolutions Committee of the Massachusetts Association of School Committees.

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