The state has a big new school funding law. Here’s what it means

Governor Charlie Baker signed the bill at a ceremony at English High School in Jamaica Plain.David L. Ryan/Globe Staff

Governor Charlie Baker on Tuesday signed into law a sweeping school funding bill that will eventually funnel an additional $1.5 billion of extra money to local districts.

The legislation is the result of many years of debate on Beacon Hill, and it attempts to bridge the gap between poor and affluent school systems, focusing particularly on helping communities that serve high numbers of students living in poverty or with language barriers or disabilities. Lawmakers have stressed the measure won’t raise state taxes.

Baker signed the bill at a ceremony at English High School in Jamaica Plain.

Students at English High School applauded.David L. Ryan/Globe Staff

“This legislation is about making sure every kid in the Commonwealth of Massachusetts, regardless of where they live or where they’re from or where they go to school, has the opportunity to get the education they need to be great,” he said.

Here are some highlights of the new law, and the challenges it seeks to address:

Why schools need more money

The law is in response to a legislative commission report four years ago that found the state’s school funding formula, established under the 1993 Education Reform Act, was grossly under-estimating the cost of providing a public education because it failed to keep pace with inflation. Consequently, a spending gap was widening between poor and affluent school systems, often because affluent communities could make up the difference and then some.

The commission identified four areas where the formula’s miscalculations were most egregious: the costs of providing services to students with disabilities, those learning to speak English fluently, and those living in poverty, as well as health care coverage for employees.

Consequently, the state’s cities with struggling economies were among the most affected since their schools tend to have a larger portion of disadvantaged students.

How the money will be distributed

The formula doles out state aid on a per-pupil basis and favors districts with the greatest need, considering such factors as a community’s household income levels and property tax revenue.

The formula also takes into account the kinds of students who are enrolled in a particular school system and the educational challenges they might have.

That means higher per-student state aid for children living in poverty, those with disabilities, and students with language barriers.

Renewed emphasis on achievement gaps

Local districts will need to craft a three-year plan to close achievement gaps among students of different backgrounds, tying the plans to state aid spending.

Gaps will be measured using a variety of metrics, such as MCAS scores, student attendance rates, and advanced coursework.

Districts will need to identify specific strategies and programs to close the gaps and how state education dollars will be spent to support the plan, such as extending the length of school days or years, increasing counseling and psychological services, beefing up teacher training, expanding early childhood education, and building a teacher workforce that reflects the demographics of student enrollment.

The plans will be subject to review by the state education commissioner, who can require changes.

The three-year plan also requires districts to get parents more engaged in their children’s education and their schools, particularly parents of students living in poverty or those with disabilities or language barriers.

More money beyond the formula

Aside from devoting more direct aid to local school systems, the law also calls for additional money for other education programs.

For instance, it sets up a special fund that the state education commissioner can tap to help districts pay for evidence-based programs and innovative strategies to close achievement gaps. Districts will be able to apply for the money through a competitive grant process.

The law also takes a modest step toward tackling deteriorating school buildings across the state by increasing the annual allotment the Massachusetts School Building Authority can reimburse local districts for new school construction projects, from $600 million to $750 million annually.

At a time when a school construction project can easily surpass $100 million, the additional money is not expected to go that far.

Greater focus on college completion

The state education secretary will have to submit an annual report to the Legislature that includes a host of data that aim to evaluate how well local schools are preparing graduates for success in college and the workplace.

The report must include data on such metrics as the portion of students who take college courses while in high school or take part in career training programs and the percentage of students accepted to college and those who earn college degrees.

The state Department of Elementary and Secondary Education has already been collecting some of this data, including high school graduating class members who earn college degrees.

Teaching financial literacy

School districts will be required to teach students about personal finance, including how to balance a checkbook, the inner workings of loans and interest rates, the dangers of credit card debt and online commerce, the rights and responsibilities of renting or buying a home, and saving for retirement.