Chapter 70 - Part 1
Chapter 70 is the law that directs funds from the State to the Schools... and it's messy to say the least.
Every year, parents, teachers, and city councilors in Methuen sit through budget meetings full of numbers and acronyms that are hard to follow. Words like “foundation budget,” “net school spending,” and “Chapter 70” get thrown around as if everyone knows what they mean. Most people don’t, and that’s not their fault… well, it's not completely their fault. This article explains exactly how the state decides how much money Methuen’s schools get, where that money comes from, and how the city is required to spend it.
What Is Chapter 70?
Chapter 70 is Massachusetts state law. It is the primary way the state distributes money to public schools. The law was passed as part of the Massachusetts Education Reform Act of 1993, and its goal has always been the same: make sure every school district in the state has enough money to give every child an adequate education, regardless of whether they live in a wealthy suburb or a working-class urban city like Methuen.
The formula does three things. It calculates how much each district needs to spend. It figures out how much the local city or town can afford to contribute. Then the state covers the rest.
Well, it's supposed to…but that's part 2 of this series.
Step 1: The Foundation Budget
What Does It Cost to Educate Methuen’s Kids?
The first thing the state does is calculate what it should cost to run Methuen’s schools. This number is called the foundation budget. Think of it as the state’s best estimate of the minimum needed to provide a quality education to every student in the district.
It's important to understand that at no point during any stage of this law do they define “quality”…
The foundation budget is not one flat number per student. The formula recognizes that different students cost more to educate. A high schooler costs more than an elementary schooler. A student in a vocational program costs more than one in a standard classroom. The state assigns specific dollar rates to eleven categories of school spending, including classroom teachers, specialist teachers, guidance counselors, administrators, and building costs, and multiplies those rates by how many students fall into each category.
On top of those base costs, Methuen gets extra funding for students who need more support. The law provides additional money for low-income students, English Language Learners, and students receiving special education services. The more students a district has in those categories, the higher the foundation budget goes.
This is enormously important for Methuen. The Methuen school district serves approximately 6,500 students, and about two-thirds of them are classified as high needs, meaning they are low income, English learners, or have disabilities, according to the Massachusetts Department of Elementary and Secondary Education. That high concentration of students with greater needs pushes Methuen’s foundation budget up significantly compared to a wealthier district with fewer high-need students.
Methuen By the Numbers (FY27)Foundation Enrollment: 6,553 studentsRequired Net School Spending: $124,723,584Required Minimum City Contribution: $52,046,906Chapter 70 State Aid: $72,676,678Non-Net Spending (busing, etc.): $11,855,430Step 2: Required Local Contribution
What Is Methuen Expected to Pay?
Once the foundation budget is set, the state figures out how much Methuen, as a city, should be able to contribute toward it. This is called the required local contribution.
The state does not ask every city to pay the same share. Instead, it looks at each community’s property values and residents’ income levels to estimate how much the local tax base can reasonably support. Wealthier communities with high property values and high incomes are expected to cover most of their own foundation budget. Cities like Methuen, with lower average incomes and more modest property values, are expected to cover less and receive more from the state.
For Methuen in the current budget year, the required minimum city contribution is $52,046,906.
That sounds great but it's not really working for us…more on that later.
Unfortunately, t h
Step 3: Chapter 70 Aid
The State Covers the Gap
Here is where it all comes together. Once the foundation budget is calculated and the required local contribution is determined, the state covers the difference. That difference is Methuen’s Chapter 70 aid.
The math: Foundation Budget − Required Local Contribution = Chapter 70 State Aid
For Methuen in FY27, that means the state is sending $72,676,678 in Chapter 70 aid. That is a substantial sum, and it reflects the reality that Methuen is a gateway community with a high-needs student population and a tax base that cannot fully self-fund its schools.
The Student Opportunity Act of 2019 was specifically designed to direct more funding toward districts like Methuen. Methuen Public Schools confirmed that as a result of the SOA, the district received increased Chapter 70 allocations in FY22, FY23, and FY24, allowing the district to add teaching and support positions, decrease class sizes, and expand English learner education, special education, and counseling services.
Unfortunately, the SOA hasn't held up its end of bargaining and hasn't aged well.
Net School Spending: The Legal Floor
Chapter 70 does not just hand out money. It also creates a legal requirement. Every district must actually spend a minimum amount on education each year. That minimum is called Net School Spending, or NSS.
Net school spending is the total of the required local contribution plus the Chapter 70 state aid. Methuen is legally required to spend that combined amount on education. If it does not, the state can block the city’s tax rate from being approved, the Attorney General can take enforcement action, and the city could lose state aid entirely.
Importantly, not everything a city spends on schools counts toward net school spending. Transportation, school construction, school meals, and spending funded by grants do not count. Only direct instructional and operational costs count. This distinction matters enormously in Methuen’s budget right now.
The mayor’s total proposed school allocation for FY27 is approximately $113,976,970 although it has found itself a few extra dollars during the budget cycle, but once non-net items like busing are stripped out, the actual instructional spending falls to roughly $103 million. The required NSS floor is $124,723,584. The gap between those two numbers is at the heart of Methuen’s current budget crisis. That gap is covered by chargebacks.
Methuen Public Schools has noted that its operating budget has historically exceeded the required net school spending, albeit barely, and that the city has exceeded its required contribution for at least the past decade. The district is not trying to shortchange students. It is caught between a legal spending requirement and a state funding formula that is not keeping up with actual costs.
It's also important to note that NSS is not just spend on our schools but also what we spend on GLTS, Northern Essex, school choice, and charter schools. So, net school spending is on total education and not just Methuen education.
Chargebacks
Chargebacks are a key and often misunderstood part of how Methuen funds its schools. The Methuen School Department pays a percentage of the budget for other city departments each year, covering shared expenses such as insurance, school resource officers, and other shared city resources. These costs are estimated at around $24 million annually.
Chargebacks do count toward the state's Net School Spending requirement, meaning they factor into whether Methuen meets its legal education spending obligation under Massachusetts law. However, accounting rules around chargebacks can shift whether particular line items count toward the state minimum, so the size of any funding gap can appear to change depending on how the ledger is sliced.
Why This Matters Right Now
Methuen is a city that is supposed to benefit from the way Chapter 70 works. It has a high-needs student population. It qualifies for more state aid than wealthier communities. The formula was designed with cities like Methuen in mind.
And yet the city’s mayor stated plainly in his FY27 budget presentation that Chapter 70 school aid is increasing by just 2.3 percent while costs to maintain the same level of services in Methuen’s schools are rising by 11 percent. The formula is not broken in theory. It is broken in practice. The next article explains exactly why.
Sources
Massachusetts General Laws Chapter 70: malegislature.gov
DESE Chapter 70 Program: doe.mass.edu/finance/chapter70
Massachusetts Budget and Policy Center: massbudget.org
Boston Globe, “Methuen mayor, School Committee divided over district budget,” June 13, 2025: bostonglobe.com
Inside Methuen, “Built to Fail,” April 23, 2026: insidemethuen.com
City of Methuen FY27 Budget Presentation: methuen.gov
Methuen Public Schools, Collective Bargaining Updates: methuen.k12.ma.us
DESE Compliance With NSS Requirements: doe.mass.edu/finance/chapter70/compliance.html