Fiscal Crisis Campaign

By: MTA Government Relations

Published: January 2025

Funding Our Schools to Meet the Needs of All Students

Public school districts across the Commonwealth are facing severe fiscal challenges that threaten to undermine their capacity to deliver a high-quality public education to all students. While the Student Opportunity Act is providing meaningful investments in many communities, not every district has seen significant increases in state aid. Additionally, a combination of factors, including technical issues with the Chapter 70 formula, high inflation and escalating costs, have further strained local budgets. Since fiscal challenges vary between districts, it will take a mix of solutions to ensure that every district has the resources that students and educators need to succeed.

The MTA is advocating for a comprehensive legislative and budget platform that helps address the main drivers of the fiscal crisis facing our public schools. Together, we can build on our historic victories with the Student Opportunity Act, Fair Share Amendment and Question 2 to make meaningful progress in advancing our shared vision for public education. We are also working to address the fiscal challenges facing our public colleges and universities so that we may ensure all students succeed and faculty and staff are paid the wages and benefits needed to recruit and retain a strong workforce.

The Bills

These bills, filed in the 2025-26 legislative session, address the public school fiscal crisis that is undermining our capacity to deliver high-quality public education to all students.

Download a Fact Sheet on Fiscal Crisis Bills

Regional School Transportation

An Act relative to full funding of regional school district transportation
Lead Sponsors: Rep. Margaret Scarsdale (D-Pepperell) & Rep. Kristin Kassner (D-Hamilton) | Sen. John Cronin (D-Fitchburg)
H.697 | S.328

High inflation continues to drive up the cost of providing transportation to students, particularly in regional districts that cover larger geographical areas. Regional school districts are currently reimbursed for a significant portion of these costs, but the Commonwealth has historically underfunded those reimbursements relative to the total cost borne by the districts. This has resulted in additional stress on already stretched public school district budgets.

This legislation seeks to move Massachusetts toward 100% reimbursement of regional school transportation costs by requiring the Department of Elementary and Secondary Education to annually request full funding for the program.

In-District School Transportation

An Act ensuring full reimbursement for in-district school transportation costs / An Act providing in-district transportation funding
Lead Sponsors: Rep. Jim Hawkins (D-Attleboro) | Sen. Lydia Edwards (D-Boston)
H.597 | S.348

As noted, school transportation costs continue to rise, and non-regional school districts are not immune from those increases. In addition, non-regional school districts do not currently receive reimbursements for the transportation costs associated with regular day and in-district special education programs, meaning that those communities are covering the full cost of student transportation. While existing law does provide for reimbursements to be made to such districts by the Commonwealth, the state budget has not funded these reimbursements in over two decades.

Under this proposal, the Commonwealth will once again reimburse school districts for regular day and in-district special education transportation costs. Specifically, it will create a four-year reimbursement funding schedule starting with 25% of the total state obligation in FY26 before reaching 100% in FY29 and subsequent years.

Rural Schools Aid

An Act to provide a sustainable future for rural schools
Lead Sponsors: Rep. Natalie Blais (D- Sunderland) | Sen. Jo Comerford (D-Northampton)
H.517 | S.314

Rural schools often have costs that are not reflected in the foundation budget for school funding, which are mostly related to not having the same economies of scale as other non-rural districts. Rural districts also often have declining enrollments, which means they rarely get increases in Chapter 70 (other than minimum aid) since it is an enrollment-based formula.

This legislation proposes to increase financial support for rural school districts through a variety of means, including through the establishment of several funds to provide additional financial resources that help address their unique fiscal challenges. One such fund is a Rural Schools Aid Fund that would receive $60 million annually in state appropriations to directly support rural school districts.

Special Education Circuit Breaker

An Act relative to the long-term fiscal health and sustainability of special education in the Commonwealth
Lead Sponsors: Rep. Adam Scanlon (D-North Attleboro) & Rep. Mike Kushmerek (D-Fitchburg) | Sen. Jake Oliveira (D-Ludlow)
H.691 | S.430

Special education costs have been increasing significantly, stretching local school district budgets and necessitating a close examination of how special education is provided and funded in Massachusetts. Currently, the Special Education Circuit Breaker Program reimburses school districts at 75% for certain instructional and transportation costs above a per-student threshold of approximately $51,000. However, the current reimbursement program has proven inadequate in covering local district costs and districts are not always reimbursed at the 75% amount.

This legislation will move the Commonwealth closer to addressing these funding concerns by increasing the reimbursement rate for the Special Education Circuit Breaker program from 75% to 90% of eligible special education costs, lowering the cost threshold for expenses for eligibility under the program and creating a commission to study and make recommendations on special education funding. These changes will bring immediate relief to public school districts across the state and lay the foundation for additional, long-term reforms.

Whole Child Grant Program

An Act to establish the Whole Child Grant Program
Lead Sponsors: Rep. Marjorie Decker (D-Cambridge) | Sen. Adam Gomez (D-Springfield)
H.544 | S.369

There is a mental health crisis in Massachusetts public schools that has been intensified by the impacts of the pandemic and that continues to impact students’ ability to learn and educators’ ability to teach. Educators, who experience the impacts of this crisis firsthand every day in the classroom, have been clear that what is needed is more funding to support staffing increases in positions that provide direct services to students and the development of other important programs and policies at the local level.

This legislation is responsive to the needs in our public schools and builds on the work the Commonwealth is already doing to address this crisis. Specifically, it creates a formula grant to provide per-pupil funding to public school districts to hire more school counselors, social workers, psychologists, Education Support Professionals and other educators, and allows for other critical investments that support the well-being of students and educators. Importantly, this grant will provide the highest per-pupil amounts to low- and middle-income districts that are not major beneficiaries under the Student Opportunity Act.

Charter School Tuition Reimbursement

An Act honoring the Commonwealth’s commitment to public school districts
Lead Sponsors: Rep. Brandy Fluker-Reid (D-Boston) | Sen. Robyn Kennedy (D-Worcester)
H.577 | S.389

When a student leaves a public school to attend a charter school, the public school district is required to pay the charter school a corresponding tuition amount, a system that siphons hundreds of millions of dollars from Massachusetts public school districts and significantly stresses the budgets of impacted public school districts. This is because the costs of operating a community’s school system do not meaningfully change despite a decline in enrollment.

One way to begin to address this issue is to strengthen the Charter School Tuition Reimbursement Program that currently reimburses sending public school districts for three years on a sliding scale when they lose students to charter schools. This legislation will add a fourth year to the reimbursement schedule and raise the reimbursement rate in the second year, thereby increasing funding to public school districts so that they can continue to deliver a high-quality public education.

Minimum Aid

The MTA strongly urges that the FY26 budget include $150 in Chapter 70 per-pupil minimum aid. Many minimum aid school districts, which represent a significant portion of all school districts, face similar fiscal challenges to non-minimum aid districts but only receive a modest per-pupil increase in Chapter 70 funding. Many of the proposals mentioned above will provide immediate and long-term relief to these districts but increasing Chapter 70 minimum to $150 is a critical piece in ensuring that all students and educators in Massachusetts have the resources they need.

Understanding the Funding Issues

Chapter 70 Inflation Adjustment: Due to high inflation in the previous years and the 4.5% inflation cap in the Chapter 70 funding formula, public school districts did not receive the real dollar aid they were promised under the Student Opportunity Act. Our Chapter 70 bill addresses this flaw in the formula by maintaining the 4.5% cap but ensuring that the formula makes up for lost inflation. Our estimates show how much additional state aid districts could receive in FY 2026 if this inflation issue is fixed.

Regional School Transportation: High inflation continues to drive up the cost of providing transportation to students, particularly in regional districts that cover larger geographical areas. Because the Commonwealth has historically underfunded the reimbursements relative to the total cost borne by the districts, our bill calls for a 100% reimbursement of regional school transportation costs. Our estimates show the increase in regional transportation reimbursement from 87% to 100% for FY 2025.

In-District School Transportation: Currently, non-regional school districts do not receive reimbursements for the transportation costs associated with regular day and in-district special education programs. Our proposed legislation gives school districts 25% reimbursement for regular day and in-district special education transportation costs in FY2026.

Rural School Aid: Rural schools often have high operating costs which are mostly related to not having the same economies of scale as other non-rural districts. These estimates show the increases for districts if rural school aid is increased from $16 million to $60 million in FY 2025, as provided for in the MTA-backed bill.

Special Education Circuit Breaker: Special education costs have been increasing significantly, stretching local school district budgets. The current reimbursement program has proven inadequate in covering local district costs, especially out-of-district transportation costs. Our estimates reflect the increase in reimbursement amounts that districts would receive based on the MTA-backed legislation, which lowers the cost eligibility threshold and increases the reimbursement rates for tuition and transportation costs from 75% to 90% for FY 2025.

Whole Child Grant Program: There is a mental health crisis in Massachusetts public schools that has been intensified by the impacts of the pandemic and that continues to impact students’ ability to learn and educators’ ability to teach. Our legislation creates a grant program to provide per pupil funding to each school district – with districts with higher percentages of low-income students receiving the highest per pupil amounts. See the spreadsheet for estimated grant amounts for FY 2026.

Charter School Reimbursement: Public school districts are required to pay charter schools a corresponding tuition amount when a student leaves a public school to attend a charter school. This significantly stresses the budgets of impacted districts. The estimates here show how much additional funding public school districts could receive in FY 2025 with our bill, which proposes adding a fourth year of funding with reimbursement rates at 100% of any tuition increase in the first year, 80% in the second year, 60% in the third year, and 40% in the fourth year.

Minimum Aid: Many minimum aid school districts, which represent a significant portion of all school districts, face similar fiscal challenges to non-minimum aid districts but only receive a modest per-pupil increase in Chapter 70 funding. Many of the proposals mentioned above will provide immediate and long-term relief to these districts but increasing Chapter 70 minimum to $150 is a critical piece in ensuring that all students and educators in Massachusetts have the resources they need. The estimates in the spreadsheet show the increase in minimum aid amounts that districts could receive under this proposal in FY 2026.

How much additional funding could your district receive?

These numbers give a better sense of how your district would benefit from MTA-backed proposals aimed at addressing the fiscal crisis currently facing our schools. These are rough estimates based on existing data that is often several years old and will change. These are not projections of actual likely aid.

Downloads

Fiscal Crisis 7 bills - Factsheet-1.pdf

Join a Fiscal Action Team to connect and organize with educators and activists who are fighting for the funding our schools deserve. Meetings are held monthly on Zoom.