Bay Staters have long taken pride in our state's leadership on public education. However, World Population Review’s 2026 public education ranking puts Massachusetts at third, behind New York and Connecticut. That website now ranks us behind New York and Connecticut. On the other popular education ranking site, US News and World Report, Massachusetts has fallen all the way to fifth, although that site considers pre-k and higher ed, instead of just public K-12 schools. Regardless of which methodology you prefer, the story is the same: Massachusetts’ public education has gotten worse relative to its peers. The answer may lie in a fiscal crisis experienced by municipalities across the Commonwealth.  

In October of 2025, the Massachusetts Municipal Alliance put out their Perfect Storm Report, highlighting the historic convergence of factors putting pressure on municipal budgets. That year saw a historic number of education budget deficits, program cuts, and layoffs. What is happening to cause this fiscal crisis, what effect is it having on educational outcomes, and what can the legislature do about it?

In Massachusetts, each school district is funded by a patchwork of federal, state, and municipal governments. State education funding is mostly given out through what is called Chapter 70 aid. Chapter 70 of the Massachusetts General Laws governs state education aid to public school districts. It establishes a minimum amount that a school district needs to operate, determines how much each municipal government is mandated to contribute based on their capacity, and provides the difference through state aid. The money is distributed on a formulaic basis, considering factors like enrollment and local revenue. The calculation for the minimum amount that schools need is made up of a series of component price estimates. Many of those components are automatically adjusted based on inflation, using the U.S. Department of Commerce’s state and local government price deflator. However, the annual inflation adjustment is capped at 4.5%. This has artificially constrained estimates of school need in years of high inflation: without that cap, we would have seen an increase of 7.08% in 2023 and 8.01% in 2024, but both years the adjustment was limited to 4.5%. This creates a gap between necessary spending to maintain level service, and legally required “adequate”  spending, reducing aid. In 2025, Chapter 70 aid was reduced by $431 million as a product of the inflation cap. Without a legislative fix, this gap will compound, pushing the “adequate” funding amount further and further below the standard of education that we are used to. 

Can’t municipalities pick up the slack? There are two issues with this, one regarding equity and another regarding law. 

Equity: When the burden of education funding is placed too heavily on municipalities, wealthier municipalities are much more likely to be able to maintain full funding, while poorer municipalities are less likely to be able to. Research finds that wealthier school districts spend more per-pupil and their students perform significantly better on standardized tests, and reforms to expand the share of state funding and reduce property tax reliance effectively reduce spending inequities and improve outcomes for disadvantaged communities. When state aid leaves a gap between required funding to meet legal adequacy standards, and required funding to maintain level standards, it dooms poorer districts to worse outcomes. 

Law: In Massachusetts, municipalities rely on property tax as their primary source of revenue. Yet, state law heavily restricts the extent that municipalities can increase their property taxes every year. Proposition 2.5 applies a limit to the dollar amount that each municipality can raise through property taxes every year. The limit increases by 2.5% plus new growth each year. The only way for a municipality to raise more than the limit is if they hold a local referendum called an “override,” which is politically difficult and extremely rare. Indicative of rising fiscal pressures, more and more municipalities have been forced to attempt overrides over the past few years. Due to these restrictions, municipalities are simply not able to keep up with the increased fiscal demand placed on them by state aid falling behind. Prop 2.5 and the Chapter 70 inflation cap leave Massachusetts’ education finance mechanisms extremely vulnerable to inflation at every level, and we are seeing the consequences of that. 

I set out to find out whether the education financial crisis is having a real impact on our schools, by compiling and analyzing data on Massachusetts school districts published by the Massachusetts Department of Elementary & Secondary Education. The first major conclusion I came to is that money absolutely matters. 

Per-pupil spending was positively associated with student teacher ratios in both the 2022/23 school year and the 2024/25 school year. This association was stronger for non-charter schools, where 56-58% of the variation in student teacher ratios could be explained by the variation in per-pupil funding. 

To come to other conclusions, I estimated a series of multiple regression models at the district level using per-pupil funding, the percentage of students classified as low-income by DESE, and the percentage of students meeting or exceeding MCAS standards. Outcomes were analyzed separately for the three MCAS subjects: Math, ELA, and Science. To estimate the impact of the high-inflation period and reductions in state aid, I used data from two school years, 2021/22 (prior to the recent period of elevated inflation) and 2024/25 (following it), and estimated models separately for charter and non-charter school districts. In total, this resulted in 12 regression models (3 subjects × 2 years × 2 school types). The results of all the models are available here, but the conclusions are clear. Higher funding correlates with higher proficiency, and the achievement gap is worsening. The results for charter districts were often statistically insignificant, which may reflect smaller sample sizes and greater variability, for this reason they are excluded from all below analysis.

In non-charter schools, when controlling for the percentage of students in each school district who are low-income, per-pupil funding significantly correlated with the percentage of students in each school district who met or exceeded MCAS standards, in both 2022 and 2025, and across subject matters. The below chart shows the percent increase in students meeting or exceeding standards that correlated with a $1k increase in per-pupil funding in each category and year. 

In both years and in every category, there was a positive relationship between per-pupil funding and proportion meeting or exceeding standards. While this relationship did not always maintain the same slope, it existed for all 6 datasets. 

In non-charter schools, when controlling for per-pupil funding, schools with a higher percentage of low-income students have a lower percentage of students meeting or exceeding MCAS standards, and that gap increased in all three categories from 2021/22 to 2024/25. The increase in the strength of this negative relationship was statistically significant in ELA, with a Z-score of approximately 2.22 (about a 97% confidence level). The increases in math and science were smaller, though both trended in the same direction, with Z-scores of approximately 1.37 and 1.54 respectively, which correspond to confidence levels in the 80s, which is suggestive but not conventionally statistically significant. However, because the dataset includes all schools in the population, sampling noise is nonexistent, and classical significance testing is less necessary than it would be in a normal sampled study.

After the consecutive high inflation years where the inflation adjustment cap took effect, and the gap between legally adequate and actually needed funding increased, the slope of the negative correlation between percent of students who are low income and percent of students meeting/exceeding standards increased. In other words, after the inflation adjustment cap took effect, the achievement gap widened. 

For non-charter schools, 69-76% of the variation in percent of students meeting or exceeding standards can be explained by the variation in per-pupil funding and the variation in percent of students classified as low-income. In statistics language, the R2 values of the 6 regression models done on non-charter schools all fell between .69 and .76, which suggests that the relationship between these three variables is consistently strong, across time and across categories.

Many solutions have been proposed to address the fiscal crisis and worsening outcomes that Massachusetts public schools are facing. These include adding a catchup mechanism to Chapter 70 aid, overturning prop 2.5, and establishing a municipal education fund. The bill to add a catchup mechanism keeps getting sent “to study,” which is Beacon Hill code for killing the bill. This is a legislative tactic that lets legislators avoid doing anything without having to vote “no,” and be confronted by pesky constituents. 

You might think that knowing the importance of funding on student outcomes, facing worsening rankings, and worsening achievement gaps across all categories, the legislature would address this, and pass at least ONE of the many solutions that advocates propose. But, in character for the least productive legislature in the country, they have been sitting on their hands and letting the issue compound, letting Massachusetts fall behind NEW YORK on a ranking that defines why many families move here. Did Eli Manning pick up a career in lobbying that I don’t know about??

Blog post by Oscar Gillette, Act on Mass Digital Media Intern, Spring 2026. Oscar's interest in local politics began in School Committee campaigns and education budget fights in his hometown of Andover. He studies history and political science at American University, and he loves the show Survivor.