State school-aid changes, 'hold harmless' rules and foundation-budget math draw sustained attention at Hubbardston joint meeting

Tracy Novak, field director for the Massachusetts Association of School Committees, outlined how Massachusetts calculates state school aid — the foundation budget under chapter 70 — and explained changes from the Student Opportunity Act during a joint meeting of the Select Board and Finance Committee in Hubbardston.

Novak walked attendees through the history behind the state’s approach (from the 1647 Old Deluder Satan law to the 1993 McDuffy decision and the resulting foundation budget regime) and described how the Student Opportunity Act (signed in 2019) revises the foundational per‑pupil calculation by increasing dollar increments for low‑income students, English learners and in‑district special education and by separating health‑insurance inflation from the general inflation factor.

Why it matters: the Student Opportunity Act phases in higher per‑pupil allocations over a six‑year schedule and reweights where state aid goes, Novak said. For many small, regional and rural districts — including the Quabbin Regional School District that serves Hubbardston — those changes produce material shifts in the foundation budget even when local enrollment is flat. At the same time, other statutory rules (the state’s formula for the share a municipality is expected to fund, municipal revenue growth factors, and an 82.5% maximum local share cap) complicate how that foundation budget becomes actual town tax obligations.

Novak explained two halves of chapter 70 funding: a standard foundation (what it should cost to educate each child, by grade and program increments) and a standard local funding effort (how much each municipality is expected to contribute based on property and income measures). She showed the FY26 per‑pupil foundation values, the three increments (low‑income, English learner and special education), and how those are applied to an October 1 enrollment count with a one‑year lag.

On inflation Novak said the state uses a federal Bureau of Economic Activity measure of state and local spending and then caps the education inflation rate at 4.5 percent under the Student Opportunity Act. She noted health‑insurance inflation is treated separately (FY26 health‑insurance inflation shown at 6.13 percent) because health costs have risen faster than general public‑sector spending.

Audience members asked about how newcomer students and immigration affect low‑income counts and funding. Novak said low‑income status is currently measured by direct certification — enrollment in MassHealth, SNAP and related programs — and that the state matches those program rolls to school enrollment. She added that pandemic-era freezes and subsequent redeterminations affected counts statewide and that supplemental per‑diem funding has been used to help districts with sudden newcomer enrollment spikes. Novak cautioned that because of the October 1 enrollment rule and the one‑year lag, immediate increases in in‑district costs are not always offset the same year by higher foundation aid.

Novak also covered “hold harmless” rules — statutory guarantees that districts receive at least the same amount of state aid they received the previous year and a minimum per‑pupil increase — which can reduce the direct link between measured need and state aid in years when the state uses these protections. She showed Quabbin Regional’s figures and explained why Quabbin’s foundation budget has risen steeply (noting concentration of low‑income students across a relatively small number of districts statewide).

Committee members and residents raised follow‑ups about classroom sizes, special‑education prevalence, the cost of newcomer students, and long‑term enrollment trends. Novak said Massachusetts K–12 enrollment has been roughly flat (just under one million students) for several years, but the statewide distribution of poverty and English‑learner populations is highly concentrated — which is the primary driver of the large aid increases for some districts.

Conversation also covered municipal mechanics: Novak walked through how the state computes a municipality’s “combined effort yield” (property and income multipliers and the uniform tax rate calculation), how that yields a target local percentage of a town’s foundation budget and how the municipal revenue growth factor (a separate DOR measure that includes new growth, prior‑year local receipts and state aid) is used in final calculations. Novak urged regional districts to show town officials the spreadsheet line by line so towns understand why required local contributions move from year to year.

Ending note: Novak said the Student Opportunity Act has moved dollars toward high‑poverty districts as intended, but it also created scenarios in which state aid growth, hold‑harmless protections and foundation‑budget increases interact in ways that may “trap” some districts into multi‑year aid patterns. She encouraged local leaders to keep communicating with legislators and to review each town’s municipal revenue growth factor and combined effort yield when preparing budgets.

Key clarifying details from the meeting: Novak presented FY26 foundation budget per‑pupil base amounts and the FY26 increments for low‑income, English learners and special education; explained that October 1 enrollment drives the per‑pupil base with a one‑year lag; noted FY26 health‑insurance inflation at 6.13 percent and general education inflation near 1.93 percent; and described Quabbin Regional’s rising foundation budget driven primarily by the low‑income increment.

Sources: presentation by Tracy Novak, Massachusetts Association of School Committees, and Q&A recorded at the joint Select Board/Finance Committee meeting in Hubbardston.