Worcester faces budgetary challenges despite $547M foundation budget for FY26

The Standing Committee on Finance, Operations, and Governance of Worcester Public Schools convened on April 3, 2025, to discuss the fiscal outlook for the upcoming fiscal year 2026. The meeting focused on the foundation budget, local contributions, and the implications of state aid on school funding.

The total foundation budget for Worcester Public Schools for FY '26 is projected at $547 million. This figure includes a required local contribution of $135 million from the city, with the state expected to provide $411.8 million in aid to bridge the funding gap. Notably, 75% of the growth in the foundation budget over the past decade has been attributed to state aid, while local contributions accounted for the remaining 25%.

The committee highlighted the importance of understanding the local required contribution, which is influenced by the municipal revenue growth factor defined under Chapter 70. This factor considers various elements, including a 2.5% increase from the previous year, new growth, and prior year local receipts. The discussion emphasized that while the city has seen an increase in local receipts—approximately $8 million more than the previous year—there are challenges in maintaining adequate funding levels for schools.

A significant concern raised during the meeting was the historical challenges Worcester has faced in meeting net school spending requirements. Despite exceeding the required local contribution, the district has struggled with eligible expenditures under Chapter 70. The committee noted that certain costs, such as transportation, are not considered eligible expenses, which can lead to a negative net school spending status. This situation is compounded by the cumulative nature of deficits, which carry forward into subsequent fiscal years.

The impact of the COVID-19 pandemic was also discussed, particularly regarding transportation costs that were not incurred during remote learning. The committee clarified that while the district was able to reallocate funds from transportation to eligible academic purposes, this was not a result of finding additional money but rather a necessity due to state budget cuts.

The meeting concluded with a review of non-net school spending components, which have been increasing over the years. The committee acknowledged the need for ongoing monitoring of both eligible and ineligible expenditures to ensure compliance with funding requirements and to address the financial challenges facing Worcester Public Schools.

Overall, the discussions underscored the complexities of school funding in Worcester, highlighting the critical role of state aid and the ongoing efforts required to meet educational spending mandates. The committee plans to continue evaluating the budget and its implications as they move forward into FY '26.