Why Are Massachusetts Schools so Cash Strapped?

This morning, MBAE issued School Funding Reality: A Bargain Not Kept, our report on school funding and spending trends in Massachusetts.  We did the study to look at how the foundation budget was working and found that the explosive growth in the cost of school employee health insurance has crowded out funding for other portions of school budgets that directly impact students such as spending on books and other classroom materials as well as teacher training.

Education funding has increased by $5 billion since the Massachusetts Education Reform Act of 1993, school districts all over the state are laying off teachers and cutting back on book purchases, teacher training, library services and athletics.  Our members wanted to find out why and this report answers the question.

The study found that school employee health benefits are eating up school budgets.  From fiscal year 2000 to fiscal year 2007, state education aid (known as Chapter 70) rose by $700 million per year; over that same period school spending on employee benefits rose by $1 billion per year.

In contrast, spending on classroom teachers, teacher professional development, and purchases of books, software, and other educational materials – areas of the budget that have a significant impact on student learning – when adjusted for inflation has actually been falling since 2000.  Spending on instructional materials fell by 11.3% per year from 2000 to 2007.

There is almost no increase in the number of teachers and no improvement in average class size despite an almost $5 billion increase in total school spending since the Foundation Budget formula went into effect in 1996.  After 11 years of education reform, the student/teacher ratio was significantly less favorable in 2007 than it had been a decade earlier.

The report also found that spending between Massachusetts school districts has not been made equal, a central goal of the Act.  The neediest districts are the farthest below the state spending goal and have the lowest growth in spending.  At only 2.3% per year from 2007 to 2010, their per pupil spending growth was a full percentage point less than the wealthiest suburban districts (3.4%).

The report comes at a critical time.  Massachusetts faces an unprecedented education funding crisis as the slow recovery of state revenues and a concurrent drop in municipal income are compounded by the impending end of federal stimulus funding.  The immediate need for financial efficiency and a recent resurgence of education reform efforts makes this an opportune time to reexamine the school finance system and evaluate what changes are needed to achieve its goals – delivering high quality public education to all students.

The Boston Foundation provided funding for this work and released the report as part of its Understanding Boston series at a forum this morning.  MBAE Executive Director Linda Noonan and Board members Michael Widmer and Joseph Esposito joined MBAE co-Founder and Secretary of Education Paul Reville for a panel discussion.  The research for this report was conducted by Ed Moscovitch of Cape Ann Economics and the Bay State Reading Institute.  Ed worked with MBAE to establish the original foundation budget.