January 22, 2025
Pursuant to section 6 of Chapter 70 of the General Laws, the Commissioner of Elementary and Secondary Education is issuing the preliminary estimates of Chapter 70 school aid and net school spending requirements for FY2026. These estimates are based on House 1, Governor Healey's proposed state budget for the coming fiscal year. The proposal increases aid to districts from $6,901,918,685 to $7,322,168,436, an increase of $420.2 million or 6.1%.
These are preliminary estimates subject to change as the House and Senate deliberate on the budget. Our purpose in providing these estimates is to assist cities, towns, and regional school districts in their budget preparations for FY2026. We advise you to construct your local budgets with sufficient flexibility to accommodate the changes that often occur in the state budget process. The Commissioner will issue final school spending requirements as soon as the governor and legislature approve either the FY2026 state budget or an earlier local aid resolution.
The FY2026 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. In House 1, 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 FY2026, the rates have been increased by 5/6ths 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 FY2026 the increase is 6.13%. An inflation rate of 1.93% 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 decreased from 905,572 in FY2025 to 905,254 in FY2026, a decrease of 318 students. Foundation enrollment decreased for 196 districts, while 118 districts experienced enrollment increases.
Finally, the formula's minimum aid provision guarantees all districts receive at least the same amount of aid in FY2026 as they did in FY2025 plus a $75 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 FY2026, a district's low-income enrollment is based on three eligibility categories:
Statewide, low-income enrollment for FY2026 is 419,861, compared to 415,821 in FY2025.
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 FY2026, these assumed rates have been increased by 5/6ths of the gap to 4.97% and 3.97%, 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 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 Chapter 70 by 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 FY2026.
Foundation tuition rates for Commonwealth charter schools are based on the same foundation budget rates used in Chapter 70. The foundation budget rate increases implemented in FY2026 are incorporated into the projected FY2026 charter tuition rates. In addition, charter school low-income enrollment for FY2026 has been identified using the same eligibility criteria used for school districts. Finally, 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 governor recommended a $179.1 million appropriation for these reimbursements. The projected assessments and reimbursements for charter tuition payments at this point 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.
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
Complete formula spreadsheet, showing the detailed calculations for each municipality and district
Preliminary FY2026 charter school tuition and enrollment
Questions about the Chapter 70 program should be directed to:
Meghan Ryan 781-338-6507
Rob O'Donnell 781-338-6512
Last Updated: January 22, 2025
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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