Malden budget breakdown

 
 
 

malden's budget

As said in the video above, the City of Malden's annual budget funds services that are necessary to the residents of Malden such as schools, police, libraries, firefighters, roads, and other programs. To meet the budget, money from various programs are added together. Malden's money comes from sources of revenue such as local property taxes, state aid, local receipts ( fees for permits, motor vehicle excise taxes, etc.), and other sources.

This video relies on information for FY2015 because it was the most recent year at time of writing that had full city and state budget information, including grants. You can view the adopted Malden city budget for FY15 here: http://www.cityofmalden.org/content/fiscal-year-2015-adopted-budget.

For the fiscal year that just closed in June, FY16, click here: http://www.cityofmalden.org/content/fiscal-year-2016-adopted-budget.
For the fiscal year that began in July, FY17, click here: http://www.cityofmalden.org/content/fiscal-year-2017-adopted-budget.

Please note that budgets go through several phases (proposed by mayor, approved by council, vetoes by mayor, etc.), so many adopted budgets (budgets that have received final approval) are slightly different than the budget that has been closed out at the end of the year. For this video, we used the city's adopted budget.

Below you'll find explanations of key components of the budget, with links to additional information for further understanding. Please do not hesitate to contact me or my office at (617) 722-2460 if you'd like more information about the budget.

I also want to thank my interns, staff, and City Controller Chuck Ranaghan for their help in making this video come to fruition.

Chapter 70- educational state aid

One of the goals of the legislature is to provide the necessary funding for K-12 schools to function. In order to ensure that each school district can provide an adequate education for students across the Commonwealth, the Chapter 70 education aid formula is used to determine how much aid each district actually needs to meet these standards.

The Chapter 70 formula can be broken down into 4 steps:

1. Calculate the Foundation Budget

First, the cost of providing education to students in a district is determined. In order to do this, the state uses a number of assumptions set into law about the cost of different pieces of education. Adding these rates together provides a "per pupil" estimated cost of education. The foundation amount is the total cost of educating students in a school district based on those assumptions. To calculate the foundation budget, multiply the number of students at every grade level and demographic multiplied by the set of education cost categories. Some changes are then made based on different costs for different categories of students. The foundation budget for Malden in FY15 was $82,589,408. Under state law, total spending for Malden Public Schools cannot go below this amount.

2. Determine the Required Local Contribution

After the foundation budget is determined, the state needs to calculate how much an individual community can contribute towards their foundation amount. This amount is based off of the property wealth and income levels of the community. The required local contribution of Malden in FY15 was $35,343,087.

3. Fill in the Gap with Chapter 70 State Education Aid

The total foundation budget from Step 1 minus the required local contribution from Step 2 leaves us with a sum of money that is paid for through the state's Chapter 70 aid. For Malden Public Schools, that number in FY15 was $47,246,321 in Chapter 70 Aid.

4. Provide Additional Local Revenue

Step 4 isn't required under state law, but is a key way that communities invest in their schools. The Chapter 70 formula defines a minimum requirement for education spending, a number that many communities find to be inadequate to provide for a good school system. Communities can add money on top of the required local contribution to exceed the foundation budget requirement. In Malden, the City provided about $1 million above the foundation budget for Malden Public Schools, an increase of about 1.3%.

To put it mathematically: 
Foundation budget = Required local contribution + Chapter 70 aid
Total School Spending = Foundation Budget + Additional Local Revenue

Chapter 70 is just one of the state programs that help districts fund their public schools. Grants, special education circuit breaker reimbursements, and charter school reimbursements are other important ways the state supports public schools.

For more information about Chapter 70, click here.

Massachusetts School Building authority (MSBA)

The Massachusetts School Building Authority aids communities in designing and receiving reimbursements for various school development projects. A recent example of their effect on Malden was their assistance in getting the city reimbursements for the renovation of Malden High School.

For more information about MSBA, click here.

Chapter 90- State aid for roads and highways

Another program that aids districts in meeting their budgets is Chapter 90. Chapter 90 is a program that provides districts with state aid that contributes to the funding of road repairs and road maintenance. The money received from this program helps districts with roadway projects in order to keep infrastructure clean, safe and in good repair. (Note: Although Chapter 90 is an annual program, it is not always considered to be state aid because it does not show up on cherry sheets, which indicate state aid for various programs to municipalities.)

For more information on Chapter 90, click here.

unrestricted general government aid (UGGA)

Cities can use UGGA to fund any services in their budgets that needs additional revenue in order to run. Examples include rec departments, school funding, libraries, and any other type of city spending.

Prior to 2010, the Commonwealth used lottery aid and additional assistance to provide municipalities with additional state aid. Originally, lottery aid gave more state aid to cities and towns who profited less off of property taxes while additional assistance gave more state aid to cities and towns with less wealthy school districts. With some inherent issues with the original formula the state changed the program and combined the two programs into UGGA.

For more information on UGGA, click here.

The fair share amendment

The Fair Share amendment is an initiative passed by both the House and the Senate in order to raise revenue for public education and transportation. The current Massachusetts income tax rate is 5.1%, and will likely shrink to 5.0% by 2019. This amendment aims to add an additional 4% surtax on individuals who's incomes are over $1,000,000.

For more information on the Fair Share amendment, click here.

charter school tuition reimbursement

In order to help pay for students attending Commonwealth Charter Schools, the programs Chapter 46 and facilities aid help offset the tuition. Whenever there is a large increase in district tuition, the Chapter 46 aid formula is used in order to create the greatest possible amount of aid that can help students enrolling in charter schools. However, facilities aid is not formula based. The aid received here would be a one to one reimbursement of the tuition that each student pays to attend school.

You can find more information on Charter School Tuition Reimbursements here.

Special education circuit breaker

State law requires public school districts to provide an adequate education for all students, including students with disabilities. When a student's needs can't be met in the public school setting, the school district pays to send the student to a more appropriate placement at a specialized school. The state's special education circuit breaker program partially reimburses schools for those costs at a percentage rate (usually between 35% and 75%, depending on funding levels that year) for special education tuition that exceeds four times the average per pupil tuition.

For example, if the state fully funds the special education circuit breaker, the reimbursement rate will be 75%. If theoretical District A has an average per pupil cost of $10,000, and has a special education student with a tuition cost of $50,000, the district will receive $7,500 from the state through the circuit breaker. Total cost ($50,000) minus four times the average per pupil cost ($10,000 x 4, or $40,000), at 75% reimbursement.

Representative Ultrino was one on the lead sponsors on fully funding the special education circuit breaker program, which has been underfunded for several years.