Franklin County school leaders call for equitable Chapter 70 funding

GREENFIELD — As state legislators contemplate how the state funds education, representatives for school districts and towns across Franklin County say urgent changes are needed to ensure rural school districts receive equitable funding.

The Department of Elementary and Secondary Education (DESE) and the Department of Revenue’s Division of Local Services (DLS) have been tasked with studying the local contribution components of the state’s Chapter 70 school finance formula and determining if changes are necessary. During a public listening session held last Thursday at Greenfield High School, superintendents, finance and school committee members, teachers, and other community members said they already know the answer: Yes, changes are needed.

“The formula is not only broken, it makes our MCAS test look good, ” Goodwin said.

Attendees said the Legislature needs to make changes to the formula, and pay particular attention to the reality of costs, the impacts of cutting funding, and change the formula to reflect the reality of the towns’ abilities to pay.

“The formula does not reflect the realitities of regional and rural school districts,” Mohawk Trail and Hawlemont Regional School Districts Superintendent Sheryl Stanton said.

Ability to pay calculation

Part of the formula used to determine a town’s ability to pay for education includes looking at the income of its residents, which town officials say makes no sense, as towns cannot tax income.

“The aggregate of all total residents’ personal income is not an accurate proxy for the town’s ability to pay for education. We do not have a local income tax, so aggregated personal income cannot have a direct impact on our ability to raise revenue to fund education,” Larry Langford, Buckland Finance Committee chair, said.

Instead of levying income taxes, municipalities rely on property taxes; however, under the limits of Proposition 2 1/2, many towns are unable to raise their taxes any higher and must cut their budget elsewhere to fund their schools or seek overrides from voters.

Peter Cross, a member of the Ralph C. Mahar School Committee, said that voters in Orange rejected an override request last spring; now the town is asking the School Committee to cut $1 million from a $16 million budget.

“I see Proposition 2 1/2 as a noose around each of the school districts that gets tighter and tighter each year,” added Kat Allen, coordinator of the Communities that Care Coalition.

Another portion of the calculation examines property values in a town, assuming that higher property values mean towns can raise more property tax revenue and have more funds for schools. Sunderland School Committee Chair Jessica Corwin said that in small towns, this is not the case, as outliers have a greater impact on average property values, even if only one or two homes are sold at higher prices.

She explained that for the 2022 fiscal year, despite enrollment declining, the town’s local contribution assessment jumped 14% because in the previous year, four homes had sold for high amounts to families with high incomes.

“It appeared that our property values had skyrocketed, and the incomes of those new families also meaningfully moved the needle on our per capita income, when of course, our town can’t even tax income to fund our schools or other town services,” Corwin said. “Small towns can have our aggregate data too heavily swayed by outlying data points for these calculations to be fair and accurate representations of our abilities to pay.”

New Salem Town Coordinator Emily Hill said that even if property values rise in New Salem and many other neighboring communities, the residents are retirees on fixed incomes who cannot afford dramatic increases in their property tax bills.

“We’re around 40% retired. That is a substantial amount of our taxpayers, and like most towns around us, we have two businesses. We don’t have a tax base,” Hill said. “We have to tax these retired individuals who are already facing homelessness and food insecurity; we, the town, cannot in good conscience raise our taxes.”

Contribution Cap

Mike Naughton of Montague and Tupper Brown of Gill told DESE and DLS representatives that the contribution cap included in the formula has led to an inequitable burden on towns that can’t afford to fund schools, while paying for towns that can afford to pay for their schools.

A DESE handout on the formula said that since 2007, the target calculations for municipalities combined are based on an underlying assumption that the total of all target local contributions statewide should fund 59% of the statewide foundation budget (target local share), with state aid covering the remaining 41% (target aid share).

However, towns are also capped on how much they contribute at 82.5%. Brown said capping how much wealthy towns contribute leads to less affluent communities being forced to contribute more in order to reach the 59% target.

“One of the underlying principles of Chapter 70 is that every town contributes the same percentage of its wealth to make up the local contribution. It is, in principle, a flat tax on all towns,” Brown said. “However, due to the interjection of a rule that no town should pay more than 82.5% of its foundation budget, the flat tax became a regressive tax. To a very large extent, wealthier towns pay a lower tax rate than less wealthy towns.”

According to calculations done by Naughton and Brown, raising the cap to 100% would, in fact, decrease the minimum contribution requirements for more towns than it would raise them.

“If there were no cap in FY26, Greenfield’s target contribution would be $4.2 million lower than it is. Montague would be $2.3 million lower, Orange $1.6 million lower, Bernardston $668,000 lower, Northfield $1 million lower,” Naughton said.

Enrollment and geography

Part of the state aid formula considers a school district’s enrollment and how many students each town has, based on its zipcode. Martha Thurber, chair of the Mohawk Trail Regional School Committee, said this does not work for a number of reasons, such as how in many small rural towns, zip codes often do not align with the borders of the town, and that budget cuts often lead to students leaving the district, resulting in less state aid and a declining cycle of budget cuts.

“We’re trying to save as much money as we can, but frankly, we’re running out of time as we wait for changes to chapter 70,” Thurber said. “Rural districts now face a death spiral where program cuts lead to students who can afford their own transportation to leave for other schools and other districts, leaving fewer students, leading to even less aid, leading to more cuts until you’re left with only a shell of an education system.”

Langford added that rural aid should be incorporated into the yearly funding formula, rather than as an additional appropriation subject to a legislative vote each year.

“We are very grateful for every penny we receive, but rural aid is a band-aid,” Langford said. It’s not a sound long-term funding model.”

While rural school districts may not be as cost-efficient as other school districts, they are no less deserving of support, said Patricia Kinsella, superintendent of the Pioneer Valley Regional School District.

“We all want farmers to produce right here in the state. When we have local farms producing good food, we have greater food security, stronger economies, and we are less vulnerable to outside forces,” Kinsella said. “If we want working farms, if we want productive forests, if we want clean watersheds, we must support families that work in these sectors, and one of the ways we support these families is by ensuring they can send their kids to good local schools.”

The cost of education

Thurber said that over the last 20 years, state aid to Mohawk Trail has increased by less than 3%, while fixed costs have gone up by 75%, leaving member towns to fill the gap.

“Towns are now paying 75% of our school budget, while all forms of state aid, in aggregate, are paying about 25% ,” Thurber said.

Shutesbury School Committee member Anna Heard said some of the biggest expenses in the school budget are fixed costs, such as health insurance, which the schools can not cut, leading to programming cuts to balance the expense.

“Shutesbury is faced with a 40% increase over the last year, which is just insane to think about trying to work that into your budget that should only increase by 3% a year,” Heard said. “When you’re trying to balance your budget, if health care goes up by 40%, something has to go down.”

“We are constantly having to fight to keep art and music in our schools,” said Greenfield School Committee member Ann Childs. “It doesn’t work. It can’t work. The current formula is just completely unrealistic; it does not reflect the way the basic costs and prices have increased.”

The solution is change

Goodwin said she reviewed the budgets for every school district in Franklin County and found that it costs $111 million to educate the 5,000 students in the county. Without equitable state aid, this expense is put on the towns’ limited tax base.

While fixed costs continue to rise, school officials said they can’t cut; they’ve already cut their budgets as much as they can, and without changes to state aid, the next cuts may result in further impacts on educational programming.

“We are not just whiners looking for more money to fix our problems from the state,” Thurber said. “We are looking to be partners with the Legislature and the state to fix a fundamental equity problem.”

Kinsella added that regional school districts cannot regionalize further to cut costs, and the solution to their fiscal challenges is changes to the Chapter 70 formula and increased state aid.

“The family that’s getting up at 4 a.m. to milk their cows does not need to be worrying about putting their children on an even earlier bus for a longer ride to a town further away,” Kinsella said. “We’re not asking for special treatment, we’re asking for fair treatment. A funding forumula that recognizes that rural districts are not and never will be the same as urban and suburnabn districts.”

Speakers urged DESE and DLS to recommend that the Legislature make changes to the Chapter 70 formula to save rural and regional schools from the downward spiral they’ve been going down.

“We’re running out of money, we’re running out of options, and we need your help,” Hill said.

This storm is a hurricane, battering communties and threatening their fracture.

State Senator Jo Comerford

“My hope is that the study you’re conducting will make visionary recommendations and deliver real and lasting solutions to intractable problems. Solutions that will have a measurable impact on students lives and community well-being,” State Sen. Jo Comerford said. “MMA (Massachusetts Municipal Association) says that cities and towns are experiencing a perfect fiscal storm; here in western and north central Massachusetts, this storm is a hurricane, battering their communities, threatening their fracture.”

Additional listening sessions have been scheduled across the state, including a virtual session on Nov. 19 at 4 p.m. Additional written comments can be submitted to C70PublicComment@mass.gov.

DESE and DLS plan to finish their report in the spring. More information about the Chapter 70 local contribution study can be found at www.doe.mass.edu.