August 9, 2023
On August 9, 2023, Governor Healey signed the FY2024 state budget that authorizes $6,592,623,086 in Chapter 70 education aid to Massachusetts school districts (7061-0008). This budget increases aid by $594 million or 9.9% over FY2023. Every operating district receives at least $60 in additional aid per student.
The FY2024 Chapter 70 program continues to implement the Student Opportunity Act (An Act Relative to Educational Opportunity for Students). The Act makes significant changes to the Chapter 70 formula, based in large part on the recommendations of the Foundation Budget Review Commission (FBRC). The updated formula is also codified in Chapter 70 of the general laws.
The updated formula includes three parameters to be specified in each year's general appropriations act. These are specified as follows:
The Act establishes new, higher foundation budget rates in five areas: benefits and fixed charges, guidance and psychological services, special education out of district tuition, English learners, and low-income students, all to be phased in by FY2027. For FY2024, the rates have been increased by 3/6ths (or one half) of the gap between the rates in FY2021—the base year used in the calculations—and the final target rates. The Act also increased the number of tiers used for the low-income increment rates from ten to twelve; districts with higher concentrations of low-income students benefit from higher rates.
In addition to these targeted rate increases, foundation budget categories are also increased to account for inflation. A new employee benefits inflation rate is applied to the employee benefits and fixed charges category. This is based on the enrollment-weighted, three-year average premium increase for all Group Insurance Commission plans; for FY2024 the increase is 5.16%. An inflation rate of 4.50% is applied to all other foundation budget rates, based on the U.S. Department of Commerce's state and local government price deflator and capped at the 4.50% maximum set in the Act. The Act does not set a maximum for the employee benefits inflation rate.
Statewide, foundation enrollment increased from 903,751 in FY2023 to 905,106 in FY2024, an increase of 1,355 or 0.15%. Foundation enrollment decreased for 195 districts, while 161 districts experienced enrollment increases.
Finally, the formula's minimum aid provision guarantees all districts receive at least the same amount of aid in FY2024 as they did in FY2023 plus a $60 per pupil increase.
The Act reinstates the definition of low-income enrollment used prior to FY2017, based on 185% of the federal poverty level. It replaces the economically disadvantaged designation (based on 133% of the federal poverty level) used from FY2017 through FY2022. For FY2024, a district's low-income enrollment is based on three eligibility categories:
Statewide, low-income enrollment for FY2024 is 421,305, compared to 407,501 in FY2023.
The Act also provides for a phase-in of increases to the assumed in-district special education enrollment to 5% for vocational students and 4% for non-vocational students. In FY2024, these assumed rates have been increased by 3/6ths (or one half) of the gap to 4.90% and 3.90%, respectively.
The aggregate wealth model that has been used to determine target local contribution requirements since FY2007 is now codified in the Act. For municipalities with preliminary required contributions above their targets, the effort reduction component of the formula closes 100% of the gap between their preliminary contribution and their contribution target. For municipalities with preliminary required contributions significantly below their targets, the formula continues to apply an additional increment to their required contribution to close a portion of the gap to their contribution target.
Finally, pursuant to its codification in the Act, a provision introduced in the FY2020 budget specifying a minimum required local contribution of 82.5% of foundation for any city or town with a combined effort yield greater than 175% of foundation is continued in FY2024.
Foundation tuition rates for Commonwealth charter schools are based on the same foundation budget rates used in Chapter 70. The foundation budget rate increases being implemented in FY2024 have been incorporated into our projected FY2024 tuition rates. In addition, charter school low-income enrollment for FY2024 has been identified using the same eligibility criteria used for districts. The facilities component of the tuition rate is $1,188 per pupil, up from $1,088 in FY2023, with this cost fully reimbursed by the state as in prior years.
The reimbursement formula for transitional aid to districts reflects the change enacted by Section 38 of the FY2020 budget, which provided for a reimbursement of 100% of any tuition increase in the first year, 60% in the second year, and 40% in the third year. Funding for first year reimbursements is prioritized first, followed by funding for second year reimbursements.
The Act requires that 100% of the total statewide reimbursement obligation be funded in FY2024 and beyond. The FY2024 budget includes $232.7 million for charter school tuition reimbursements (7061-9010), a decrease of $11.2 million from the FY2023 GAA. This appropriation level is expected to meet the 100% requirement when tuition assessments are updated to reflect actual enrollments and district spending levels. The projected assessments and reimbursements for charter tuition payments at this point in time can be useful for budget planning but should not be viewed as final numbers.
Here are links to more detailed information on the Governor's proposed budget:
Summary chart, showing foundation enrollment, foundation budget, Chapter 70 aid, and required local contributions for each school district
Summary chart for regional school districts, showing foundation enrollment and required local contribution for each member of the district
PowerPoint, describing the major components of the formula
White paper, describing the major components of the formula in greater detail
Complete formula spreadsheet, showing the detailed calculations for each municipality and district
Questions about the Chapter 70 program should be directed to:
Rob Hanna 781-338-6525
Rob O'Donnell 781-338-6512
Last Updated: August 14, 2023
Massachusetts Department of Elementary and Secondary Education 135 Santilli Highway, Everett, MA 02149
Voice: (781) 338-3000 TTY: (800) 439-2370
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