School Funding Reality: A Bargain Not Kept

The Massachusetts foundation budget (which
ensures a minimum level of school funding for each district) was considered
groundbreaking at the time of its passage in 1993. It was designed to ensure adequate
resources for low-income and minority districts, to enable them to meet the
state’s new, higher standards. Fast-forward seventeen years. This new report by
Ed Moscovitch, the budget formula’s architect himself, finds that spending gaps
between rich and poor districts have not closed, and increases in state aid
under the plan have failed to keep pace with the actual cost of running
schools. That’s largely because spending on health benefits has exploded
compared to other operating expenses over the past decade. From 2000-2007,
state spending on benefits increased by 13.6 percent annually, leaps and bounds
above the 5.4 percent yearly increase allotted in the foundation budget. These
massive augmentations, the report assesses, have chalked up $1 billion in
additional costs to the state, and have commandeered funds from inputs more
related to student learning (professional development, educational materials,
etc.).  The report—the first in a
three-part series—is an important reminder to policymakers in Massachusetts and
beyond: teacher pensions might be getting all of the attention, but
out-of-control healthcare costs are just as big a problem.

Edward Moscovitch, “School
Funding Reality: A Bargain Not Kept
,” (Gloucester, MA: Cape Ann Economics,
for the Massachusetts Business Alliance for Education, December 2010).