District says Chapter 70 data removes window for large state reimbursement; committee weighing no-fee full-day kindergarten options

At the Feb. 26 Hanover School Committee meeting, district finance staff presented updated Chapter 70 calculations and said preliminary data for fiscal 2026 make the town a "minimum aid" district for the next several years, removing an anticipated large state reimbursement that had made no-fee full-day kindergarten financially attractive.

The nut graf: Finance staff said a mix of factors'1. a smaller-than-expected foundation budget increase driven by a 25-student drop in district enrollment and fewer low-income students, and 2. a larger-than-projected rise in the town's required local contribution driven by increased estimated local receipts and equalized valuation'combined to shrink the Chapter 70 gap that had supported a large reimbursement for adding students to the formula.

Finance staffer Mike Oates told the committee, "I must report that the opportunity to receive significant increase in our Chapter 70 reimbursement by transitioning to a no fee full day kindergarten is no longer available to us, or at least for the time being." The presentation noted the town's free cash for FY24 came in at $3,299,283.

Administrators laid out two primary options for the committee: 1) eliminate the tuition for full-day kindergarten using a combination of one-time reserves (including consideration of the special-education reserve/free cash) and incremental Chapter 70 growth as a temporary bridge while developing a sustainable FY27+ funding plan; or 2) maintain the current tuition-based structure for full-day kindergarten and delay any no-fee change until a stable, ongoing funding source is identified. The district also plans to collect a standard $500 deposit from registered kindergarten families to secure placements; the committee was told deposits would be refunded if a no-fee decision is enacted.

Committee members expressed concern about creating a multi-year funding obligation without a clear, sustainable revenue source. One member said that using reserve funds now would require a written legal opinion from town counsel and coordination with the Select Board. Administrators said they will follow up with town counsel and the town manager's office and bring a recommended funding strategy to the next meeting; the committee agreed it will need a decision by the next meeting to inform registration and planning.

Ending: The committee asked administrators to return with more concrete funding scenarios, legal guidance on reserve use, and a recommended timeline; administrators will collect kindergarten deposits next week to secure placements while the committee finalizes the policy decision.