Boston’s State Education Aid Plays Reduced Role

Limited aid increases and underfunded reimbursements are concerning

The Commonwealth’s FY19 General Fund operating budget for education aid for Boston continues the trend of limited aid increases and underfunding of a major reimbursement account.  Chapter 70 education aid is the largest state aid account for Boston at $220M in FY19.  However, this year Boston’s Chapter 70 aid will increase by less than 1%, and it continues to decline as a percent of the operating budget of the Boston Public Schools (BPS).

A second major education revenue source is the state charter tuition reimbursement to help mitigate the loss of state aid due to students attending public charter schools.  However, the state appropriation of this account has not been fully funded. The $22.7M paid reimbursement for Boston in FY19 is $28M less than the amount due as only 45% of the reimbursement was paid by the state.  Payment was 98% in FY14.

Education Assessment
The City of Boston is assessed by the state for tuition payments for 11,250 students who reside in Boston and attend Commonwealth charter schools.   The assessment represents a transfer of state Chapter 70 aid from Boston to the public charter schools as the money follows the students. The City’s charter school tuition assessment in FY19 is $194.9M, an increase of $21.6M or 12.5% over last year.  The tuition assessment increase in FY19 is $19.7M greater than the total Chapter 70 aid increase this year.

Five-Year Trend
In the last five years, FY14 to FY19, Boston’s Chapter 70 aid has increased by 5.1% while the BPS budget has increased by 18.6%.  The charter tuition assessment of $195M in FY19 is an increase of $84.3M or 76.2% since FY14.  The bottom line is that this year the City has $582,017 or 0.2% more in General Fund state education aid, not including funds for school construction, than it did five years ago and net state education aid is $83.7M less. If this trend holds, within a few years, the cost of the charter assessment will be greater than Chapter 70 aid and the charter reimbursement combined, a reason for concern. However, the City does hold the BPS budget harmless from the growing charter school tuition assessment.

Education State Aid v. Assessments
$ in Millions
Aid FY14 FY19 Change %
Ch.70 Aid $209.4 $220.0 $10.6 5.1%
Charter Tuition Reimbursement $32.7 $22.7 -$10.0 -30.6%
Total Ed. Aid $242.1 $242.7 $0.6 0.2%
Charter Tuition $110.7 $194.9 $84.3 76.2%
Net State Aid $131.4 $47.7 -$83.7 -63.7%
BPS Budget $937.9 $1,112.2 $174.3 18.6%

Impact of Formula Change
The state’s decision this year to increase Chapter 70 funding through a formula change will provide no help to Boston. As a “minimum aid” community, the City of Boston does not qualify for that additional aid. This year, Boston receives a minimum Chapter 70 aid increase of $30 per-pupil.

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