Up Next: Worcester officials plan pursuit of at least $4.6M in state school funds

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An attempt to recover millions of dollars in state school funding proposed by a top Worcester Public Schools administrator may return far less than estimated based on state law, but a councilor who backs the effort plans to remain squarely behind the pursuit at Tuesday night’s City Council meeting.

“Whatever that number is, my pitch is going to be the same [Tuesday] night. It’s going to be pretty loud and clear that we’re getting screwed,” Councilor at-large Morris A. Bergman told the Sun Monday. “We should be screaming and yelling to get that money back.”

Moe Bergman

Courtesy city of Worcester

Bergman

At issue is the inflation rate used to calculate Chapter 70 aid in 2010. In the midst of a budget crunch, the state used an inflation rate of 3.04 percent. That rate was from a different fiscal quarter than the one required by state law. The rate for the required quarter was 6.75 percent.

The difference between the two rates, roughly 3.6 percent, means the city of Worcester would be due about $12 million if a correction was included in the next fiscal budget.

However, the final report of the Foundation Budget Review Commission noted that state law capped inflation at 4.5 percent. The difference between that rate and the rate used would mean the city is due, by statute, roughly $4.6 million in retroactive funding.

An April 25 report by Worcester Public Schools Chief Financial and Operations Officer Brian E. Allen to a joint meeting of the council’s Education Committee and school board’s Finance Committee estimated the city was owed $11,873,250.

In a late-morning interview Tuesday, May 3, Allen told the Sun the nearly $12 million figure does not recognize the 4.5 percent statutory inflation cap. In previous years, Allen said, the legislature has waived the cap. That is what he and the district are hoping for in this case.

“I don’t know that we’re ever going to be in a position to recover [the funding],” Allen said. “We’ve asked the legislature to consider putting that inflation factor back into the calculation for Chapter 70 for FY 2017. Because the inflation factor for FY 2017 is basically zero.”

The council Education Committee, led by Bergman, filed an agenda item for tonight’s City Council meeting that reads:

“Request City Manager request the City Solicitor render an opinion as to legal options in recovering the 2010 miscalculated foundation education formula dollars ($12,000,000.00) and whether or not there is an applicable statute of limitations.”

City Solicitor David H. Moore, through city spokesman John Hill declined comment Tuesday until he was able to report to the council, which he did not do Tuesday night.

Brian A. O’Connell, dean of the School Committee and finance chief for Haverhill Public Schools, which would be owed more than $3.1 million according to Allen’s estimates, called the nearly $12 million figure  “legislative advocacy,” an attempt to spur local and state legislators into action.

The House has passed the budget without the additional funds. Worcester officials are hoping the Senate addresses the matter in its budget and it survives conference committee.

O'Connell

Courtesy WPS

O’Connell

“We have to request the funds,” O’Connell said in an interview on Friday, April 29. “Whether or not the funds would be a contractual entitlement or if the state is mandated to provide that money is another issue. It’s worthwhile to request the funds, but it will likely be an uphill battle getting that money back.”

“Whatever the amount is owed, where have we been the last six years? It’s still a boatload of money,” Bergman said.

“On one hand we’re saying that the state should make us whole for the inflation factor that we should have properly received,” said O’Connell, regarding the difference between the figures. “But the actual claim we would file now is that the legislature would give us would be limited by the cap.”

Despite statute there appears to be some precedent to request the higher inflation rate and nearly $12 million.

According to a September 2009 report from the Massachusetts Budget and Policy Center, “In years when the inflation rate exceeded 4.5 percent, the Legislature waived the cap and increased Foundation Budget rates by the full amount.”


Document: A copy of Allen’s review can be viewed here


Among all the state’s 26 gateway cities, according to Allen’s report, $87.5 million in state aid would be needed to address the shortfalls from the state’s 2010 calculation of the inflation rate. Counting all of the state’s school districts, that figure balloons to $158 million.

The April 25 meeting, Bergman said, was the first time an attempt to recover the money was broached.

“I was shocked when I heard it,” Bergman said Friday. “This dollar amount has been floating around for six years? And this is the first time it’s really getting any attention? My understanding is there’s really no dispute about it.”

O’Connell said it is not a case that the city didn’t notice the school department was being shortchanged in 2010, but rather that the state simply didn’t provide the funding they should have if the proper inflation factor had been used.

“State action prevented us from receiving something that we should have received at that time. They wouldn’t have given us the funds at the time because the state had to appropriate its funding,” O’Connell said.

School Committee member Molly O. McCullough said there is a larger issue at hand.

“The actual inflation rate [used to calculate] of the foundation budget is much too low, which results in consistent underfunding. We have been working with our state delegation on this,” McCullough said on the phone Friday, April 29.

“Essentially we are fighting to recoup the money from 2010 and to have the formula changed moving forward — even in small increments, which it would probably have to be — in order to appropriately fund our schools.”

The fight for funds comes at a time when the Worcester Public Schools are facing serious budget concerns.

As the Sun reported in February, the school system’s Human Resources Department and administration requested an additional $14.5 million for this coming school year that they believed was needed to fill positions and fulfill other services.

According to school budget documents for fiscal 2017, a $3.8 million revenue increase in Chapter 70 funding is expected, leaving a $22 million budget gap heading into next fiscal year.

According to an internal communication to interim Superintendent Marco C. Rodrigues from Allen on April 20, a number of amendments were filed in mid-April by the state legislature that could change the city’s school department budget. These include supplemental Head Start funding, an MCAS low-scoring support grant, and reimbursement for out-of-district vocational transportation.

The same memo stated that budget recommendations for fiscal 2017 are being prepared and finalized in order for the budget document to be presented to the School Committee on May 13.

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