School Finance FAQs

Answers to frequently asked questions about School Finance in Massachusetts during the COVID-19 pandemic.

On Authority

During times of crisis, clear lines of communication remaining open between administration and the School Committee are more important than ever. The scrambling around school closure did lead to some quick decisions, but the lines of decisions around budgeting and collective bargaining remain in effect.

On Collective Bargaining

The employer of record for collective bargaining remains the School Committee; if there are Memoranda of Agreement with collective bargaining units, those should come before the School Committee for approval. School Committees should be updated on whatever plans regarding time and renumeration have been accepted by bargaining units.

The state’s guidance is that employees should be paid, with an expectation that some service is being provided by those employees, however possible under the circumstances.

On Payment of Contracts

Decisions regarding payment of contracts should be proceeding with the sense of the Committee; the state’s guidance has been as follows:

  • Collaboratives are seen as an extension of the school district, and should be paid as per usual, with the expectation that services to students are still being provided
  • Out-of-district tuition should negotiated, again with the expectation that services to students are still being provided
  • Contracts regarding transportation should be negotiated with providers, understanding that there will be need for such services again, but that not all costs of those providers currently are being incurred. Regional districts should plan to report costs for reimbursement at the same proration as if they were actually bussing students.

Municipal districts should note that town accountants under MGL Ch. 41, sec. 56 will be seeking what services have been provided to the district for which the cost has been incurred.

On Warrants

Many districts are finding this a good time to avail themselves of the provision of MGL Ch. 41, sec. 56 (for municipal districts) and MGL Ch. 71, sec. 16A (for regional districts) to appoint a single signatory for warrants. Note that this is done by a vote of the School Committee. Warrants so signed must still be made available on the next agenda, and, as the law notes such provision “shall not limit the responsibility of each member of the board in the event of a noncompliance with this section.”

There are also districts that have, after conferring with district counsel, moved to the use of electronic signatures for warrants.

On Quarterly Transfers

Between the additional cleaning of schools, purchases in some districts of remote instructional materials and technology, and possible savings due to buildings not being opened, there is a very good chance that the district budget does not look the same way it was projected to as the second quarter closed. Do recall that transfers between cost centers do need to be voted via roll call by the School Committee.

On the Remainder of this Fiscal Year

The March state revenue collections were $83 million or 3.2 percent above the state's monthly benchmark, so with 70% of the year in, the state thus far is 1.1% over the benchmark for the year. However, per State House News Service, Revenue Commissioner Geoffrey Snyder “acknowledged, though, that revenue collections moving forward will be impacted by the economic disruptions seen as essential to staunching the spread of the coronavirus, including sales, meals, and room taxes deferrals, and the extension of the personal income tax filing deadline into the next fiscal year.”

Further, some of the same stressors are also sure to impact local revenue collections during the fourth quarter; some municipalities are also delaying the collection of property taxes until later in the spring. A few districts have had their municipalities raise the question of non-net school spending (like transportation) being reallocated within the municipal budget.

As we have additional information on this, we will share it.

On the Federal CARES Act

On March 27, 2020, the President signed into law the CARES (Coronavirus Aid, Relief, and Economic Security) Act which overall set aside $30.75 billion for education nationally. That funding is divided into:

  • a Governor’s Emergency Education Relief Fund (9.8%)
  • an Elementary and Secondary School Emergency Relief Fund (43.9%)
  • a Higher Education Emergency Relief Fund (46.3%)

The remainder is set aside for outlying areas, the Bureau of Indian Education, and hardest hit areas.

The Congressional Research Service last week shared the following estimates regarding allocated funding for Massachusetts:

  • $51,001,000 for the Governor’s Emergency Education Relief Fund
  • $214,894,000 for the Elementary and Secondary School Emergency Relief Fund
  • $265,905,000 for the Higher Education Emergency Relief Fund

The Governor’s fund can be used from early education through to higher ed. The Elementary and Secondary funding must have at least 90% allocated to districts.

States are only eligible for CARES Act funding if they sustain the level of support for K-12 and higher ed at a level equal to the average of the prior three years for both FY20 and FY21. However, this provision may be waived by the Secretary equal to their average support for the preceding three years. The secretary of education is given authority to waive this maintenance of effort provision if states have “experienced a precipitous decline in financial resources.”

The CARES Act also states that any entity that receiving funds must continue to pay its employees and contractors to the extent practicable during the period of any disruptions or closures related to coronavirus. It is, as yet, unclear how this interacts, as above, with MGL Ch. 41, sec. 56.

We await further information on what the actual allocation to Massachusetts will be and how it then will be allocated to districts.

On FY21

As noted above, it is widely expected the pandemic will impact tax revenue for FY21. The Joint Committee on Ways and Means in collaboration with the Office of Administration and Finance was to hold a virtual hearing on Tuesday, April 7 to reconsider revenue for FY21; that has now been postponed to Tuesday, April 14. MASC will send a report on that hearing.

It is not expected that the House will be proposing a budget for FY21 during the month of April.

We will update with additional information on FY21 as it is available.