$10 Billion Is a Lot of Money

In a $10 billion budget request that goes on for almost 950 pages, it might be easy to overlook a few hundred million dollars here and there. But there are a couple of line items in the Department of Elementary and Secondary Education (DESE) budget request for fiscal year (FY) 2026 that deserve a closer look.

One such item is DESE requesting a much higher than usual increase in the Foundation Formula. The Foundation Formula is the principal vehicle for distributing state general revenue to school districts in a way that (theoretically) reflects student needs and (theoretically) balances resources between poor and wealthy districts. The total Foundation Formula funding has been creeping up from about $3.4 billion a few years ago to $3.8 billion last year. For the next fiscal year, DESE would like to keep the $3.8 billion and add another $500 million, which is three or four times the typical increase.

Why the big increase? Three years ago, DESE asked for an increase in the base amount per student, in part because enrollment was declining. (For reference, the number of students being funded by this "student-based formula" has decreased by over 20,000 students in the last five years). Apparently, having the formula vary with the number of students is only okay if that number is going up. In fact, the increase in the base amount accounts for over $300 million of the request.

Secondly, a bill was passed last year that made several changes to education programs at the state level. The estimated cost of all of those changes was "up to" $228 million in FY 2026. But that includes changes in a laundry list of budget items-not just the Foundation Formula.

Here are what the fiscal effects directly associated with the Foundation Formula were calculated to be for FY 2026 by the Committee on Legislative Research's Oversight Division. Just over $1.6 million was estimated for changes to how virtual students are counted. A change in how students are counted-from being based entirely on attendance to being based 90 percent on attendance and 10 percent on enrollment-was expected to cost $41 million in FY 2026. A change to how preschool students are counted is expected to cost an additional $61 million in FY 2026. Finally, incentives that increase the Foundation Formula for districts that keep a five-day school week, instead of switching to a four-day school week, are projected to cost $40 million in FY 2026.

So why is the legislature being asked for an additional $500 million? It seems that DESE will not accept districts receiving less money for fewer students.