July 29, 2024
On July 29, 2024, Governor Healey signed the FY2025 state budget that authorizes $6,901,918,685 in Chapter 70 education aid to Massachusetts school districts (7061-0008). This budget increases aid by $309,295,599 or 4.7% over FY2024. Every operating district receives at least $104 in additional aid per student.
The FY2025 Chapter 70 program continues to implement the Student Opportunity Act (SOA, An Act Relative to Educational Opportunity for Students). The SOA 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 SOA 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, which are all expected to be phased in by FY2027. For FY2025, the rates have been increased by 4/6ths of the gap between the rates in FY2021—the base year used in the calculations—and the final target rates. The SOA 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 FY2025 the increase is 5.03%. An inflation rate of 1.35% is applied to all other foundation budget rates, based on the U.S. Department of Commerce's state and local government price deflator.
Statewide, foundation enrollment increased from 905,106 in FY2024 to 905,572 in FY2025, an increase of 466 students. Foundation enrollment decreased for 164 districts, while 149 districts experienced enrollment increases.
Finally, the formula's minimum aid provision guarantees all districts receive at least the same amount of aid in FY2025 as they did in FY2024 plus a $104 per pupil increase.
The SOA 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 FY2025, a district's low-income enrollment is based on three eligibility categories:
Statewide, low-income enrollment for FY2025 is 415,821, compared to 421,305 in FY2024.
The SOA 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 FY2025, these assumed rates have been increased by 4/6ths of the gap to 4.93% and 3.93%, respectively.
The aggregate wealth model that has been used to determine target local contribution requirements since FY2007 is now codified in Chapter 70 by the SOA. 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 Chapter 70 by the SOA, 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 FY2025.
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 FY2025 have been incorporated into our projected FY2025 tuition rates. In addition, charter school low-income enrollment for FY2025 has been identified using the same eligibility criteria used for districts. The facilities component of the tuition rate is $1,188 per pupil, 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 FY20 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 SOA requires that 100% of the total statewide reimbursement obligation be funded in FY2024 and beyond. The FY2025 budget includes $199 million for charter school tuition reimbursements (7061-9010), a decrease of $34 million from the FY2024 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 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, given normal fluctuations in both projected and actual enrollments which occur over the course of the fiscal year.
DESE has prepared the following materials to assist local officials in understanding the state aid calculations and local contribution requirements in this year's Chapter 70 program:
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 in greater detail
Summary document, 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 O'Donnell 781-338-6512
Meghan Ryan 781-338-6507
Last Updated: August 2, 2024
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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