IN 2019, Massachusetts passed historic legislation in the name of equity that significantly boosted state funding for public school districts with high proportions of low‑income, English learner, and special education students.

The Student Opportunity Act (SOA) increased Chapter 70 aid – the state’s primary school funding law and program – by $1.5 billion across a seven-year rollout. Nearly three-quarters of that additional aid has been allocated to urban districts in Gateway Cities with often weak tax bases that serve a disproportionate number of high-needs students and rely heavily on state education funding.

At the time of the SOA’s passage, school and city leaders hailed the legislation as a long-overdue update to the state’s K-12 funding formula, one that boosts aid for districts educating lots of students from low-income households.

The well-intended move was aimed at addressing persistent racial and socioeconomic achievement gaps, but what Beacon Hill perhaps didn’t foresee was the greater financial pressure it would place on municipal budgets as sluggish state aid growth that has not kept pace with inflation, strict limits on local tax increases, and rising costs continue to trap many local governments between a rock and a hard place.

In New Bedford, the significant funding increases from the SOA have helped the school district hire more counselors, specialists, and other support staff. Of the nearly 12,500 students enrolled in New Bedford Public Schools, 26 percent are English learners, 24 percent have disabilities, and 79 percent are low income. Overall, nearly 88 percent of the student population is considered high need.

The K-12 funding formula, first crafted as part of the 1993 Education Reform Act, establishes a foundation budget, the minimum amount of education spending per pupil deemed necessary to deliver an adequate education.

Districts must meet that required minimum spending level through a combination of state aid and local funding. State aid makes up a larger share of the foundation budget in poorer districts and in those educating more high-needs students.

The formula had not kept up with the higher costs associated with educating disadvantaged students, and the SOA significantly increased the state aid for educating these pupils. It also increased the level set by the state as the foundation budget for these students, which increased the amount of local spending required by districts to reach their required share of school costs.

“We welcome more education aid, as our schools need it … The upshot is, for better or worse, we are contributing more to schools,” New Bedford mayor Jon Mitchell said in a May press release. (Mitchell’s office declined to make him available for an interview and pointed to his remarks on the issue from his budget address this spring.)

Some municipalities won’t see a mandated local spending hike because they already contribute above the minimum amounts required by state law, but others, like New Bedford, fund their public schools at the mandated minimum.

“We do so, not because we believe the schools don’t need more money, but it’s all that we can afford,” Mitchell said in his May budget address.

As of fiscal year 2027, Chapter 70 aid from the state accounted for more than 86 percent ($271 million) of New Bedford’s education budget, while the city is responsible for the remaining 14 percent ($43 million), for a total of more than $314 million.

Mitchell says that without proportional increases in other funding streams, the local contribution requirements of the SOA have contributed to a recent and unprecedented budget deficit of $32 million.

While growth in unrestricted local aid – state funding for all non-education needs – has remained relatively flat, increasing by just 10 percent ($2.7 million) in New Bedford between fiscal year 2023 (roughly the time the state fully funded the SOA’s rollout after pandemic-related delays) and fiscal year 2027, the city’s required local contribution to schools has increased by 26 percent ($9 million) in the same timeframe. Meanwhile, New Bedford’s tax levy ceiling – the maximum amount it can raise through property taxes – has grown by 19 percent ($28.5 million) since 2023.

The Massachusetts Municipal Association, which advocates on behalf of cities and towns, has been raising concerns about exactly the kind of fiscal squeeze New Bedford is now feeling.

“Without addressing this aspect of the SOA funding challenge, districts with required increases in local contributions that exceed the percentage growth in their own local property tax revenues may be forced to cut funding for essential municipal services, which would only weaken their capacity to deliver critical non-school services to residents,” the municipal association wrote in a 2025 letter to Gov. Maura Healey.

Though city leaders say New Bedford’s deficit, announced in May, can largely be attributed to higher non-discretionary costs such as pension and health care obligations, they say it is exacerbated by the required increase in school spending. The city will have to make up for the deficit with higher property taxes, layoffs, and service cutbacks, according to the mayor’s budget proposal. Because New Bedford funds its public schools at the minimum required amount, the city cannot make cuts to its school department budget.

Mitchell’s proposal, which he described as his “best effort” to balance the city’s budget this spring, eliminated more than 90 positions, with some 26 layoffs within the city’s fire department. He also proposed closing a fire station, but in June, the city council slashed $1.7 million from his budget to allow for the station to remain open, The New Bedford Light reported, though Mitchell will ultimately be the deciding factor on that.

Adding to the municipal budget woes is unaddressed inflation, which has eroded the intended impact of the SOA funds and effectively reduced the amount that districts receive each year. The act included an automatic Chapter 70 increase to account for inflation, but the legislation, passed before the COVID-19 pandemic when inflation was much lower, capped that annual adjustment at 4.5 percent. Actual inflation rates for school costs have exceeded this cap, reaching 8 percent in recent fiscal years, meaning the aid has not kept up with current education costs, according to the Massachusetts Budget and Policy Center, a research and advocacy organization.

Advocates like the Massachusetts Association of School Committees have argued that the inflation cap should be eliminated and have called on the state to use actual inflation to calculate future Chapter 70 aid.

But correcting this would require $465 million in additional, annual state funding, with $248 million going to Gateway Cities, according to a 2024 study released by MassBudget.

The funding gaps from unaddressed inflation tend to be larger in Gateway City school districts. For example, New Bedford had a funding gap of $15.5 million as of fiscal year 2027, while Eastham had a gap of just $27,000, according to MassBudget. Springfield had the largest gap in the state at more than $31.5 million.

State Sen. Jason Lewis, a Democrat from Winchester who led efforts to pass the SOA in 2019, introduced a bill in 2025 that would create a commission to revise the way local education funding is determined and consider the elimination of the inflation cap. The fiscal year 2027 state budget ultimately reestablished the Budget Foundation Review Commission, which will conduct a comprehensive review of the K-12 funding formula.

In May, the Senate proposed a $53 million increase in unrestricted aid for cities and towns. Mitchell called the effort “laudable,” but said the funding would “barely make a dent.”

“New Bedford is hardly alone among Massachusetts cities and towns that are struggling with the fact that the state has not kept up its obligation to fund general government aid,” Mitchell said in his spring budget address. “Had the state kept up its local aid commitment, we would have received approximately $13 million more this current year.”

Healey’s budget proposal would have increased local aid by $33 million from the year prior, while the House proposed a $10 million increase. The final state budget ultimately included a $40 million increase, falling far short of the $351 million increase sought by the MMA.

Mitchell predicted that the deficit and cuts that defined New Bedford’s budget season this year are not likely to let up.

“The budget still has a long-term imbalance,” Mitchell said in his address. “Because the cost of city government is projected to rise faster than the revenue coming in, still more sacrifices will be necessary.”

Update, September 1: This story has been updated to include that the fiscal year 2027 state budget reestablished the Budget Foundation Review Commission, which will conduct a comprehensive review of the K-12 funding formula.