1. 1 Preliminary Report on Current Fiscal Conditions in Massachusetts Public Schools Massachusetts Department of Education January 2008

2. 2 The Context: Increasing Expectations and Challenges Performance targets for schools and districts are continually increasing towards goal of universal proficiency by 2014 The competency determination standard for the Class of 2010 has been made more rigorous Regional, national, and global competition Student population is increasing most rapidly for children who require additional programs and/or services Percent change in enrollment, 2003 to 2007

3. 3 Chapter 70 funding has not fully recovered from the downturn in FY02 Real and nominal Chapter 70 aid, FY94 to FY08

4. 4 District Spending is Not in Alignment with Foundation Budget Assumptions In FY07, on average, districts spent 18% more than the foundation budget required 117 districts spent 25% more 64 districts spent 40% more Spending in particular categories was much higher than assumed Health insurance Out-of-district tuition payments Classroom and specialist teachers (even with layoffs and salaries rising slower than inflation)

5. 5 Instructional spending Between FY02 and FY07, instructional spending increased at half the rate of inflation. As a share of total spending, it declined from 61% to 55%. Instructional spending as percent of total, FY02 to FY07

6. 6 Total spending is increasing, but cities/towns bear a greater share of costs Local sources supported 58% of total district expenditures in FY06, compared to 55% in FY02. Chapter 70 34% Federal 5% State Grants 2% Other 4% Local 55% Chapter 70 30% State Grants 1% Local 58% Federal 5% Other 6% FY02 FY06

7. 7 Report and district data tables at www.doe.mass.edu/research/reports/research.html

8. 8 Expenditures Total spending Instructional spending Health insurance Spending from fees Educator & student data Enrollment Number of teachers Student-teacher ratio Average teacher salary Chapter 70 Foundation enrollment Foundation budget Required & actual local contribution Amount of Ch70 aid Required and actual net school spending Available for each district for FY02 – FY07

9. 9 Considerations Adjust certain existing foundation budget assumptions Study adequacy of foundation budget Provide incentives for districts to participate in state health insurance and pension funds Expand the use of educational collaboratives and other regional entities to provide more cost effective services Help districts identify and adopt efficient, effective practices