Joint Statement: School District Budget Challenges

Massachusetts Association of School Superintendents (M.A.S.S.) 

Massachusetts Association of School Committees (MASC) 

Massachusetts Association of School Business Officials (MASBO)

(M.A.S.S.) (MASC) (MASBO)

February 28, 2025

A disturbing trend has emerged in school districts throughout Massachusetts. As School Committees, Superintendents, and School Business Officials grapple with budget proposals for the 2025-26 school year, more and more districts are projecting significant budget deficits. The simple reality is that in many communities, expenses are increasing at much higher rates than the revenue available to support them.

At budget hearings and community meetings across the Commonwealth, residents are presented with proposed strategies to close the fiscal gaps, none of which is ideal, including staff layoffs, reduction or elimination of programs and services, and even school closures. District leaders try to reassure their constituents that they have proposed these solutions only after exhausting all other options. Many have advocated with municipal leaders for additional revenue, but cities and towns themselves are often facing economic challenges to deliver critical services.

Some communities will pursue a Proposition 2½ override to avoid cuts through increased taxes, but voters are not always willing to pay higher tax bills, particularly if their own household budgets are already strained. Even a successful override is often a temporary solution that does not address the long-term structural deficits facing school districts.

Although the financial situation in each school district is unique, we see a consistent pattern of fiscal pressures across a broad range of communities – whether large or small, urban, suburban, or rural. Several major expenses are increasing dramatically year after year, including out-of-district special education tuition, transportation, health insurance, utilities, and other significant line items. 

At the same time, the revenue available to most school districts remains relatively flat. State funding has increased overall in recent years, but not enough to offset the rapidly rising expenses. Local communities – especially those without a sizable commercial sector – rely heavily on residential taxes, which cannot increase by more than 2.5% without an override. These shortfalls are compounded by the loss of federal funding that supported pandemic recovery investments, forcing districts to choose between eliminating those interventions or redirecting other revenue to sustain them.

When faced with painful consequences – especially the loss of talented employees or vital programs for students and families – it is understandable for residents to express their anger, frustration, and fear, and to demand answers about the causes of this predicament. We urge the people of Massachusetts to know the facts and understand the statewide context before placing blame on the individuals who lead our school districts. 

School Committees, Superintendents, and School Business Officials have a tremendous responsibility to manage public funds with the utmost care and with the best interest of students at the forefront. However, they are ultimately constrained by the resources available to them, particularly as the needs and costs to operate school districts continue to escalate well beyond the means of our communities.

Shared from -> https://www.massupt.org/2025/02/28/joint_statement_budgets_2-28-25/

Why do prices feel high if inflation is down?

Inflation is down, but three in four Americans are still concerned about coming price increases.

Published January 28, 2025 by the USAFacts team

Inflation has eased since a 2022 peak, but an estimated three-quarters of American adults are still concerned about coming price increases. While the inflation rate has dropped to 2.9% as of December 2024, Americans are feeling the lasting impact of a historic spike.

How is inflation trending?

After rising to a 40-year high of 9.1% in June 2022, the inflation rate trended down for much of 2023 and 2024, falling to a low of 2.4% in September 2024 before ticking up over the next few months.

The declining inflation rate means prices have been rising at a more gradual pace, and this can in turn mean less stress on consumers.

Why do prices feel high if inflation is down?

Continue reading the full article online -> 

https://usafacts.org/articles/why-might-prices-feel-high-if-inflation-is-slowing

Washington Post: "Social Security issues 2.5% COLA increase"

"Social Security recipients will see a 2.5 percent increase in their monthly checks next year, the federal government announced Thursday. It’s a smaller hike than in recent years, which was expected given the cooling of inflation.

Soaring prices in recent years brought unusually large cost-of-living increases in benefit checks, since Social Security payouts are automatically adjusted once a year based on a government measure of inflation. The annual adjustment, known as COLA, brought seniors a 5.9 percent boost in 2022, an 8.7 percent increase in 2023 (the largest in about 40 years) and a 3.2 percent increase in 2024."

Continue reading the article online via my "gift link" (no subscription required via this link) ->  https://wapo.st/489gZaY

Washington Post: "Social Security issues 2.5% COLA increase"

Your food is more expensive – are US corporate profits to blame? | Inflation | The Guardian

"As inflation shot to its peak around mid-2022, Chipotle’s prices also rose, pushing up what customers paid for burritos and bowls by as much as several dollars. Since then, the fast casual restaurant’s costs have broadly fallen. Prices have not.

Chipotle’s decision to maintain high prices helped boost profits 110% in recent years, while its executives boasted to investors that they raised prices higher than inflationary costs.

Chipotle’s sparkling financials are representative of much of the food industry, according to a Guardian analysis of financial documents and earning calls transcripts from 36 top US food corporations.

It reveals that while you may be feeling the pain from high prices at restaurants and supermarkets, many companies making and selling the products are doing remarkably well. Most have seen their profits jump as they continue raising prices on customers, the analysis found.

Some companies say they have no choice but to pass inflationary pain on to consumers. Others, however, acknowledge they are exploiting the inflationary atmosphere to raise prices, or to shrink product sizes, a strategy dubbed “shrinkflation”.

Continue reading the article online (subscription may be required) ->

https://www.theguardian.com/environment/article/2024/jul/26/food-price-inflation-corporate-profit

Your food is more expensive – are US corporate profits to blame? | Inflation | The Guardian

NEPM: "Massachusetts schools need more funds, some point to flaw in education finance law"

Why are so many school districts faced with funding issues this year? 

There is a common thread and it points to a flaw within the Student Opportunity Act (SOA) funding model. Yes, the model that was redesigned in 2019 to add more funding to the schools in need but some have identified a technical issue in the formula as summarized in this article:

"Fix the funding flaw

A not common alliance is calling on education officials to fix a calculation in Chapter 70. That group, Novick’s MASCA, the Massachusetts Association of School Superintendents, the Massachusetts Teachers Association and the American Federation of Teachers Massachusetts created a FAQ to explain how inflation of the last two years, between 7% and 8 % is a factor.

"... the [Chapter 70] law caps the annual inflation adjustment of the foundation budget at 4.5 percent," the FAQ said. "As a result, districts did not receive funds to cover a significant portion of inflation that they had to pay for in expenses.”

The way the Chapter 70 formula originally worked, the FAQ said, “that would not be a long-term problem because the lost inflation would automatically be added back into the foundation budget in the following year. But a technical change made almost a decade after the law was passed inadvertently changed that. Now when the cap reduces aid below the level needed to keep pace with inflation, that reduction is locked in forever and reduces future aid.”

Continue reading the New England Public Media article online -> https://www.nepm.org/regional-news/2024-04-25/massachusetts-schools-need-more-funds-some-point-to-flaw-in-education-finance-law

Thanks to Mass Municipal Association for the pointer to the article ->

https://twitter.com/massmunicipal/status/1783926637169442860

NEPM: "Massachusetts schools need more funds, some point to flaw in education finance law"

Franklin is not alone in struggling to fund their schools & town budget

Via Boston Globe: 

"Nearly five years after Massachusetts lawmakers overhauled the state’s school funding formula, districts are struggling to balance their budgets for the upcoming school year, prompting many to consider cutting programs and staff or asking taxpayers to dig deeper. 

The chief culprit, district leaders and advocates say, is the high rate of inflation that hit the US economy in recent years, much higher than the adjustments used in the new funding formula that was revamped to reflect modern-day costs. 

The failure of the new formula to accurately capture inflation could be collectively costing districts hundreds of millions of dollars in aid, according to Colin Jones, deputy policy director at the Massachusetts Budget and Policy Center, a nonpartisan research institute. 

Voters in Belmont, Harvard, and Westford will be considering hefty property tax hikes at the polls this spring, which, if they fail to pass, could result in significant cuts to school and town services. In Belmont, for example, if voters reject an $8.4 million override on April 2, school leaders have said they will need to close the Mary Lee Burbank Elementary School, eliminate dozens of teaching and other positions, and make deep cuts to extracurricular activities."

Continue reading the full article online (subscription may be required) ->

https://www.bostonglobe.com/2024/03/12/metro/massachusetts-school-funding-budget-cuts/

Franklin is not alone in struggling to fund their schools & town budget

Half of recent US inflation due to high corporate profits, report finds | Inflation | The Guardian

"A new report claims “resounding evidence” shows that high corporate profits are a main driver of ongoing inflation, and companies continue to keep prices high even as their inflationary costs drop.

The report, compiled by the progressive Groundwork Collaborative thinktank, found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report.

Prices for consumers rose by 3.4% over the past year, but input costs for producers increased by just 1%, according to the authors’ calculations, which were based on data from the Bureau of Economic Analysis and National Income and Products Accounts.

“Costs have come down substantially, and while corporations were quick to pass on their increased costs to consumers, they are surprisingly less quick to pass on their savings to consumers,” Liz Pancotti, a Groundwork strategic adviser and paper co-author, said."

Continue reading the article online (contribution may be required)

https://www.theguardian.com/business/2024/jan/19/us-inflation-caused-by-corporate-profits

Direct link to report referenced ->

https://groundworkcollaborative.org/wp-content/uploads/2024/01/24.01.17-GWC-Corporate-Profits-Report.pdf

The Groundwork Collaborative thinktank found prices for consumers rose by 3.4% over the past year, but input costs for producers increased by just 1%. Illustration: The Guardian

CommonWealth Magazine: "Old laws, like Prop 2 1/2, need to adapt to times"

"I’VE BEEN STRUGGLING to find the right metaphor for our current economic situation. After the great recession of 2007-2009, my go-to was a staircase: the recession had knocked us down a flight of stairs and it took us a decade to climb back up.

But that won’t do today. If COVID knocked us down the stairs, our response was to leap–like some superhero–up and out of the building. Only afterwards did we realize we don’t know how to land.

Or how’s this analogy…to avoid a dangerous tangle on the highway, we successfully accelerated around it–only to discover that our brakes aren’t working well.

You get the point. For the first time in decades, the problem with the US economy is that it’s running too hot, with plentiful job opportunities driving unsustainable wage growth and consumer demand keeping inflation above healthy levels.

Fixing all this is mostly a job for the feds. But lawmakers here in Massachusetts have an important role to play: they need to adapt."

Continue reading the article at CommonWealth Magazine ->

https://commonwealthmagazine.org/opinion/old-laws-like-prop-2-1-2-need-to-be-adapted-for-times/ 

CommonWealth Magazine: "Old laws, like Prop 2 1/2, need to adapt to times"

From the heat to the proposed 'friendly 40b' process, to the 5 year fiscal outlook, we cover these and more in this Talk Franklin episode - 07/26/22

FM #832 = This is the Franklin Matters radio show, number 832 in the series. 

This session of the radio show shares my "Talk Franklin" conversation with Town Administrator Jamie Hellen and Marketing & Communications Specialist Lily Rivera. We had our conversation at the Municipal Building in Jamie’s office. 

Topics for this session

• This heat wave broke, the drought is continuing 

• Weekly Farmers Market, Concert on the Common, food trucks, movie nights

• Hydrant painting contest by DPW, applications due Aug 12, winner announcement in October

• Friendly 40b

• EDC to do their ‘short list’ for the MAPC recommendations at Aug 10 meeting

• Green community presentation at August Town Council meeting

• 5 year fiscal outlook (not published yet but highlights covered)

• Old South Meeting House

• Davis Thayer deed processing underway, discussion in Fall on how best to use it

The conversation runs about 45 minutes. Let’s listen to my conversation with Jamie and Lily. Audio file -> https://anchor.fm/letstalkfranklin/episodes/The-End-of-the-Heat-Wave--Hydrant-Painting--and-the-New-Friendly-40b-Process-e1lrjsg/a-a8ak6mi

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Hydrant painting contest  https://www.franklinma.gov/public-works/news/hydrant-painting-starts-today

40b collection

https://www.franklinmatters.org/2022/07/what-is-40b-why-is-town-of-franklin.html

Beaver St collection

https://www.franklinmatters.org/2022/07/what-is-beaver-st-interceptor-why-does.html

Franklin for All webpage 

https://www.mapc.org/resource-library/franklin-for-all/

Green Community story map https://www.franklinma.gov/administrator/pages/green-community 

Town budget page  https://www.franklinma.gov/town-budget 

Community & Cultural District calendar https://www.franklinmatters.org/p/blog-page.html 

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The music for the intro and exit was provided by Michael Clark and the group "East of Shirley". The piece is titled "Ernesto, manana"  c. Michael Clark & Tintype Tunes, 2008 and used with their permission.

I hope you enjoy!

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From the heat to the proposed 'friendly 40b' process, to the 5 year fiscal outlook, we cover these and more in this Talk Franklin episode - 07/26/22

Washington Post: "Five charts explaining why inflation is at a 40-year high"

"The bumpy economic recovery has had policymakers, economists and Americans households grappling with greater price hikes for groceries, cars, rent and other essentials.

The latest inflation data, released by the Bureau of Labor Statistics, showed that prices in March climbed 8.5 percent compared with the year before, the highest measure in over 40 years.

The Federal Reserve has launched a major series of interest rate increases to get inflation under control, penciling in seven hikes by the end of the year. But it’s unclear how quickly that action will be able to bring down the rising cost of living, or if the Fed will be spurred to even more aggressive action that risks thrusting the economy into a recession

Persistent supply chain backlogs and high consumer demand for goods have kept prices elevated. And more recently, Russia’s invasion of Ukraine has strained global energy markets and triggered higher gasoline prices. There is no clear answer for when that will change, leaving Americans to feel the strain in their pocketbooks in the meantime. This is a breakdown of how we got here."

Continue reading the article (subscription may be required)   https://www.washingtonpost.com/business/2022/inflation-charts/ 

"Five charts explaining why inflation is at a 40-year high"

Washington Post: "Five charts explaining why inflation is at a near 40-year high" (3 min video)

"The bumpy economic recovery has had policymakers, economists and American households grappling with greater price hikes for groceries, gas, cars, rent and just about everything else we need.

The latest inflation data, released by the Bureau of Labor Statistics, showed prices in November rose to a nearly 40-year high, climbing 6.8 percent compared with the year before.

For months, officials at the Federal Reserve and White House argued that pandemic-era inflation will be temporary. But they’ve had to back away from that message, which was increasingly hard to square with what was happening in the economy — and the way Americans experience it.

Persistent supply chain backlogs and high consumer demand for goods have kept prices elevated. There is no clear answer for when that will change, leaving Americans to feel the strain in their pocketbooks in the meantime. This is a breakdown of how we got here."

Continue reading the article online (subscription maybe required)

https://www.washingtonpost.com/business/2021/10/14/inflation-prices-supply-chain/

Year-over-year changes in overall consumer price index, seasonally adjusted