BOSTON (STATE HOUSE) – Gov. Charlie Baker’s new budget bill includes new funding to help school districts deal with rising costs of health insurance and employee benefits, a move he described this week as a “down-payment” on an issue raised in a special commission’s report that concluded state funding for schools has failed to keep pace over the years with rising expenses.

In November 2015, the Foundation Budget Review Commission issued a report saying the state’s current school funding system underestimates the cost of educating students by at least $1 billion per year. School district spending on employee benefits throughout Massachusetts exceeds the foundation budget allotment by more than 140 percent, according to the report.

During a WGBH radio appearance Tuesday, Baker said his fiscal 2018 budget “included for the first time … a down-payment on one of the issues that was raised by the commission, which is the rising cost of health insurance for cities and towns.”

According to the Department of Elementary and Secondary Education, the change would mean “an additional $66 million is invested in district foundation budgets.” A school district’s foundation budget is calculated based on costs for a variety of categories, including teaching and instruction, benefits, maintenance, guidance services, special education tuition and administration.

During his monthly “Ask the Governor” segment, Baker mentioned the additional funding on Tuesday after a caller named Brian from Lynn asked him what he would to do get more cash flow into schools while many communities grapple with tight budgets.

“I’m sure this will end up being the source of debate in the Legislature between now and the end of the session, but I can tell you that making sure that our schools are funded has been a priority for us since we got here, and it’s going to continue to be going forward, and this down-payment on the Foundation Budget Review Commission thing I think is an important first step toward resolving some of those issues as well,” Baker said.

Baker’s fiscal 2018 budget recommends $4,719,407,241 in aid to school districts, an increase of $91 million or 2 percent over this year. The 2017 budget increased the education aid, known as Chapter 70 money, by 2.6 percent or $116 million, over the previous year, according to the education department.

In a Jan. 27 legislative bulletin, Massachusetts Association of School Committees general counsel Stephen Finnegan said it appears that Baker’s budget begins to address rising health care costs raised by the Foundation Budget Review Commission, but not the special education costs flagged by the panel.

Finnegan also reported that the current state budget includes a minimum aid guarantee of at least $55 per pupil, compared to $20 per pupil proposed by the governor, and said school committees, like state government, are struggling with rising health care costs that he described as “budget busters.”

The $20 adjustment represents a “below-inflation increase,” according to the Massachusetts Municipal Association, and “could force many communities to reduce school programs or further shift funds from the municipal side of the budget.” The MMA is pressing for minimum aid of at least $100 per student, and “strongly supports” implementation of all of the recommendations of the Foundation Budget Review Commission to update minimum spending standards for special education and health insurance, as well as the commission’s recommendation to phase in the changes over a four-year period.

A $40 million increase in unrestricted municipal aid recommended by Baker should “somewhat reduce” the competition between school and municipal budgets at the local level, Finnegan wrote, while highlighting other accounts that local school officials will try to boost during legislative budget deliberations.

Other state spending accounts critical to local education budgets are level-funded in Baker’s budget, including a $277 million proposal to address certain special education expenses, funding for regional school transportation, money for districts sending students to charter schools, and reimbursements to help schools cover the costs of transporting homeless students. A “pothole account” featured in previous state budgets to cover “extraordinary expenses that occur unexpectedly” was not funded in the budget proposal recommended last week by the governor, according to Finnegan’s bulletin.

House lawmakers will likely release of their redraft of Baker’s budget in April, after holding joint budget hearings with the Senate.

The final numbers for Chapter 70 and other local aid accounts will not be set until after the House and Senate pass their budget proposals and recommend a consensus budget to the governor, probably sometime this summer.

The Senate last session passed a bill calling for a major increase in education spending phased in over several years, a proposal that died in the House.

The section of Baker’s budget dealing with local aid calls for foundation budget rates for employee benefits and fixed charges to be increased to $414.79 for pre-school and half-day kindergarten; $829.55 for full-day kindergarten; $829.59 for elementary; $810.59 for middle school; $761.96 for high school; $3,259.68 for in-school special education; $505.99 for limited English pre-school and half day kindergarten; $1,002.45 for limited English all other grades; and $1,196.77 for vocational.

Copyright 2017 State House News Service