The state’s formula for funding public schools has changed in ways that pump extra money into wealthier districts while shortchanging low-income areas, according to a report scheduled to be released Monday by the Massachusetts Business Alliance for Education and the Greater Boston Chamber of Commerce.
The analysis found that many wealthier districts receive more money from the state than what the funding formula determines they need, because multiple funding levers added by state legislators over time do not take a community’s financial need into account.
“This research and analysis shows that there’s a massive scale of inequity that’s baked into the current state aid formula,” Ed Lambert, executive director of the business alliance, said in a phone interview.
Lambert said the formula was intended to put more money into needy districts to help offset limited local funding and “fulfill the constitutional requirement to make sure that all students were getting access to a high-quality education.”
“Over time what has happened, and what the report points out, is that additions and/or changes have been made … to expand parts of the formula in ways that allowed all communities to benefit, whether they had the capacity to fund education on their own or not,” Lambert said.
State Representative Alice Peisch, co-chairwoman of the Legislature’s Joint Committee on Education, said in a phone interview Sunday that “at the end of the day, the overwhelming majority of the funds go to the neediest students in the neediest districts.”
“Not all of the funding is needs-driven, but most of it is,” Peisch said.
A task force assembled by the state Department of Elementary and Secondary Education and Department of Revenue under the 2019 Student Opportunity Act, an education reform bill that overhauls the school funding formula, is working on an analysis of the formula that will inform future decision-making, Peisch said.
“I think that there is room to change the distribution formula,” she said.
A spokesman for state Senator Jason Lewis, co-chairman of the education committee, said over the weekend that Lewis was reviewing the report and didn’t yet have detailed comment on its findings.
The spokesman, Thomas Dalton, said in an e-mail that Lewis and other legislators passed the Student Opportunity Act last year because they “recognized … that further reforms are likely needed” to address what local communities contribute to their districts.
He also pointed to the task force analyzing the funding formula, adding that Lewis believes the new report “will provide helpful input for the DESE/DOR analysis.”
Representatives for Speaker of the House Robert A. DeLeo, Senate President Karen E. Spilka, Education Secretary James Peyser, and Commissioner of Elementary and Secondary Education Jeffrey C. Riley did not respond to requests for comment on the report.
In the state’s next proposed budget, about 14 percent of the $5.48 billion allocated for funding public schools — $778 million — would be distributed without consideration of need, according to the new report. Passage of that budget was postponed in July when the Legislature approved an interim spending measure.
Out of that $778 million allocated according to so-called “needs blind” factors, nearly half a billion dollars would go to the state’s wealthiest 20 percent of districts, which can afford to fully fund their own schools without state aid, according to the report.
“This is state money that could otherwise be used to accelerate increases in funding to higher needs districts that do not have the capacity to fully fund their schools,” Lambert and James E. Rooney, president and chief executive of the Greater Boston Chamber of Commerce, said in a preface to the report.
“It is funding that could be used to close yawning gaps in opportunity and achievement for high-needs and low-income students, gaps that have likely been widened by the recent school closures related to the COVID-19 pandemic,” Lambert and Rooney continued.
The state’s “needs blind” factors include a “minimum aid” rule that guarantees districts a flat increase per student when no other factor would give them an increase. Under the proposed budget, districts receiving “minimum aid” would get $30 per student, adding up to $11.9 million total, according to the report.
The formula also includes a guarantee that districts will receive at least as much money each year as they did the previous year, even if enrollments drop precipitously. According to the report, districts will receive about $319 million under the proposed budget because of this “hold harmless” provision.
The report suggests gradually phasing out this provision and raising the maximum contribution for wealthy districts, which, like poorer districts, are required to cover only 82.5 percent.
“We think it’s time for policy makers to ask the question, in tough times, particularly in COVID-challenged times … does it make sense for us to be sending state education aid to very wealthy communities who have the capacity to fund this on their own?” Lambert said.
Rooney said in a statement that recovering from the COVID-19 pandemic in an economically equitable way “requires greater attention to how the state leverages and targets its limited resources.”
“Our priority rests with ensuring every student can access a quality education and that we continue to make headway toward closing achievement gaps,” Rooney said. “The economic future of these students and the state depend on it.”