FY21 State Aid
State Aid is the City’s second largest single source of general fund revenue, although it has been declining as a share of recurring revenue.
State Aid is comprised of revenue paid to the City net of state assessments, or charges, the City is required to pay to the state.
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State Aid and Assessments
Due to COVID-19 uncertainties, the State did not pass a budget for FY21. Therefore, State Aid Revenue was budgeted at the FY20 budget level, totaling $464.2 million. It includes:
- Chapter 70 Education Aid - $221.9 million
- Unrestricted General Government Aid (UGGA) - $201.2 million
- Charter School Tuition Reimbursement - $34.7 million
- Other categories, including State Owned Land and Veterans Benefits- $6.4 million
Assessments are budgeted to increase by $20.4 million, or 6.6%, and include:
- Charter School Tuition, budgeted to increase by $17.4 million, or 8.1%
- MBTA, budgeted to increase by $2.7 million, or 3.0%
- Other categories, including RMV Non-Renewal Surcharge and School Choice Sending Tuition, are increasing by $296 thousand in FY21
The Student Opportunity Act
For the past five years, Mayor Walsh, BPS teachers, staff, parents and students from around Boston and the state have been advocating on behalf of education finance reform that updates State funding formulas to better reflect the needs of students and a 21st century classroom.
The City has consistently advocated that any education finance bill must direct new resources back to districts that educate the highest needs students in the state, like Boston.
The Student Opportunity Act represents a fundamental change in trajectory of State funding for Boston’s schools and students. The bill will roll out in different phases over the next seven years as the Legislature funds it during the annual budget process. When fully implemented, the bill will ensure that Boston benefits in two main ways:
- A dramatic increase to Boston’s Chapter 70 funding
- A commitment to fully fund the City’s charter school tuition reimbursement
Net State Aid
State Aid Over Time
Net State Aid by fiscal year since FY08 have been decreasing year-over-year. Hovering over the different points will present each year’s revenue, assessments and net state aid.
FY20 and FY21 are budgeted amounts.
Net State Aid equals state revenue minus state assessments. The FY20 Net State Aid is currently projected to total $153.6 million, while the FY21 budget assumes a $20.4 million reduction to $133.2 million.
Between FY02 and FY20, Net State Aid has decreased by $274.7 million, putting pressure on the City’s other sources of revenue. These sources are increasingly required to cover for the diminishing revenue source.