October 2019
School districts pay tuition for resident pupils attending Commonwealth charter schools. There are two programs that directly offset this tuition, Transition Aid and Facilities Aid.
Transition aid has previously been referenced as Chapter 46 aid, in reference to the legislation that created it, Chapter 46 of the Acts of 1997. The Chapter 46 legislation authorizes several aid programs. While the most significant component is the aid for recent increases in charter school tuition, two minor components exist to help offset tuition for new public school pupils and for sibling enrollment at tuition-capped districts.
The transition tuition aid program is designed to generate the greatest amount of aid where there is a large increase in district tuition over the prior fiscal year. This occurs where there is a significant shift of enrollment into new or existing charter schools. The aid is a function of change in tuition, not specific pupil enrollment.
Table 1 presents the financial impact for a single, $100,000 increase in Commonwealth charter school tuition in FY20. The example assumes there is no tuition before or after FY20 in order to illustrate the mechanics of the aid program.
In the first year an increase in tuition occurs, the district would receive aid in the amount of 100 percent of the increase. In the following fiscal year, the district would receive 60 percent of the 100 percent increase. Two years following the initial increase the district would receive a final 40 percent of the 100 percent increase.
In sum, over three years the district would receive 200 percent of one year's tuition increase, 100 + 60 + 40 = 200. In each fiscal year they would receive aid for increases over three fiscal years.
Table 2 below contains a 10-year simulation to illustrate the subtleties of the formula.
The one to one matching function of the 100 percent tier has the beneficial effect of holding the district harmless from the immediate financial impact of expanding tuition at Commonwealth charter schools.
The supplemental tiers of 60 and 40 percent reimbursement provide a financial cushion for districts during the years of increased pupil migration to charter schools. When charter tuition costs stabilize, aid diminishes, shifting the financial responsibility back to the sending district.
While it is true that new enrollment is a trigger in generating aid, it is increases in tuition that drive the formula.
For example, when a 300-seat school replaces their graduating class of 75 pupils with a new class of 75 new pupils, this process, by itself, generates no increased tuition, and thus no aid. However, if this same school expands to 375 seats, the additional enrollment will fuel an increase in tuition and trigger aid.
Pupils transferring-in from private or home-schooled settings represent a new cost to districts. When these pupils enter traditional public schools, state aid for these students lags by one school year. If they enroll at a Commonwealth charter school, the private and home-school component of Chapter 46 aid covers their first year of tuition, neutralizing the financial impact they normally present to their districts. In their second year, the state aid will cover them and financial responsibility shifts back to the district.
If the enrollment of a sibling at a Commonwealth charter school is the sole cause of a sending district's tuition cost to exceed their net school spending (NSS) cap, the sibling's tuition will be paid from Chapter 46 aid.
Charter schools are not eligible for state financing for school construction. Facilities aid offsets the entire cost of facilities tuition, simulating the direct aid districts receive from the state's School Building Authority for capital projects.
Unlike transition aid, facilities aid is not formula based. The aid is a one to one reimbursement of the districts per pupil facilities tuition.
Funding for charter tuition aid is provided on Line 7061-9010 of the state budget.
FY2020 State Budget: 7061-9010 For fiscal year 2020 reimbursements to certain cities, towns and regional school districts of charter school tuition and the per-pupil capital facilities component included in the charter school tuition amount for Commonwealth charter schools, as calculated under subsections (ff) and (gg) of section 89 of chapter 71 of the General Laws; provided, that $7,500,000 shall be expended for school districts in which net charter school tuition costs exceed 9 percent of net school spending and in which chapter 70 aid under section 3 of this act as a percentage of the district's foundation budget is below the total state chapter 70 aid under section 3 of this act as a percentage of the total state foundation budget; provided further, that $7,500,000 shall be expended for school districts to mitigate the costs associated with significant and sustained charter school enrollment growth; provided further, that such funds shall be administered by the department of elementary and secondary education; provided further, that the department shall report quarterly to the house and senate committees on ways and means on the distribution of funds to districts and the methodology used to distribute such funds; provided further, that notwithstanding subsection (ff) of section 89 of chapter 71 of the General Laws or any other general or special law to the contrary, the per-pupil capital facilities component of the Commonwealth charter school tuition rate for fiscal year 2020 shall be $938; and provided further, that if the amount appropriated is insufficient to fully fund all reimbursements required by said section 89 of said chapter 71, the department shall fund the reimbursements in accordance with the following priorities: (a) the per-pupil capital facilities component; (b) the 100 percent increase reimbursement; and (c) the remaining increase reimbursements, beginning with the most recent year. $115,000,000
While the budget language clearly identifies the priority of facilities aid funding over transition aid, it does not identify the priority of funding for private, home school, and sibling pupils.
Transition aid supplements a districts Chapter 70 aid, while facilities and private, home school, and sibling pupil tuition costs exist outside of the Chapter 70 state aid program. Subsequently, the Department's priority order of funding is facilities aid first, private, home school, and sibling pupils second, and transition aid last.
Transition aid was initially established by Chapter 46 of the Acts of 1997 and revised in 2010 through An Act Relative to the Achievement Gap. Effective with the fiscal year 2020 budget, Chapter 41 of the Acts of 2019, outside section 38, the program returned to its original three tier, 100/60/40 model.
M.G.L. c.71 § 89 (gg) Any district whose total charter school tuition amount is greater than its total charter school tuition amount for the previous year shall be reimbursed by the Commonwealth in accordance with this paragraph and subject to appropriation; provided, however, that no funds for said reimbursements shall be deducted from funds distributed pursuant to chapter 70. The district's reimbursement shall be 100 percent of the increase in the year in which the increase occurs, 60 percent of the increase in the year following the increase and 40 percent of the increase in the second year following the increase.
M.G.L. c.71 § 89 (c) If a charter school student previously attended a private or parochial school or was home schooled, the Commonwealth shall assume the first year cost for that student and shall not reduce the sending district's chapter 70 aid for that student's tuition in that fiscal year.
M.G.L. c.71 § 89 (i)(2) In any fiscal year, no public school district's total charter school tuition payment to Commonwealth charter schools shall exceed 9 percent of the district's net school spending; provided, however, that a public school district's total charter tuition payment to Commonwealth charter schools shall not exceed 18 percent of the district's net school spending if the school district qualifies under paragraph (3). The Commonwealth shall incur charter school tuition payments for siblings attending Commonwealth charter schools to the extent that their attendance would otherwise cause the school district's charter school tuition payments to exceed 9 percent of the school district's net school spending or 18 percent for those districts that qualify under said paragraph (3).
M.G.L. c.71 § 89 (ff) The [Department of Elementary and Secondary Education] shall, subject to appropriation, provide funding to charter schools for a portion of the per pupil capital needs component included in the charter tuition amount and shall reimburse the sending school districts for said costs. In fiscal year 2011 and thereafter, such funding shall not be less than the per pupil amount provided in fiscal year 2010.
Questions may be directed to Hadley Cabral in the Office of District and School Finance at (781) 338-6586 or hcabral@doe.mass.edu.
Last Updated: October 16, 2019
Massachusetts Department of Elementary and Secondary Education 135 Santilli Highway, Everett, MA 02149
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