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Chuck Kollars` Personal Home Ipswich: the Place

Ipswich Public
School Funding


In the past funding of my local public schools particularly concerned me, especially as funding has been in nontrivial trouble for several years (and the situation seems to just get worse). Some of what I learned may be of use to others in the future, so I've recorded it here. The information presented here is less detailed than before simply because I haven't been as deeply involved in the minutiae as I once was. You can skip to particular sections of interest (or of course you can read linearly).

(Along with how to pay for it is the question of what will be taught. My concerns in this area focused on the overly regimented and counter productive MCAS Test [particularly requiring it to graduate].)



What Is A "Fiscal Year"?

A "fiscal year" is any twelve-month-long period used for budgeting and accounting. It's often convenient to choose a period that's different from a "calendar year" (January through December). Any twelve months is fine, so long as it's used consistently every year. "Fiscal year" is often abbreviated FY and is referred to by the last two digits of the year in which it ends. So for example July 2012-June 2013 would be referred to as FY13.

Government budgeting in Massachusetts —including funding of public schools— is done on a July-through-June "fiscal year". Other events are meshed with this schedule. For example, Ipswich's Spring Town Meeting occurs only a few weeks before the beginning of the "fiscal year" in July. The July-June fiscal year works quite well for public schools, as an entire school year fits neatly inside a single budget year (with no complicated overlaps or carryforwards).

Is School Money Being Spent Wisely?

Summary

While "waste, fraud, and abuse" is a common generic problem in many school districts, it does not seem to be relevant to the particular case of the Ipswich school district. The school district's "Central Office" employs only a handful of people. Teachers talk directly to principals who talk directly to the superintendent; there are no other administrative or managerial layers. As a parent volunteer I had difficulties in scrounging up "routine" supplies like rubber bands, manila folders, blank CDs, and even cellophane tape. It was obvious to me there was no waste where supplies were concerned. And the most frequent gating factor for an activity was where to find an adult with time to provide supervision. Teachers and staff were stretched very thin.

Personnel costs (salaries, health insurance, retirement benefits, etc.) are approximately 85% of our schools budget. To retain both personnel and academic programs and also to provide all mandated services means all cuts have to come out of a small portion (10%-15%) of the total school budget. This is difficult.

For quite a number of years Ipswich schools have had a tradition of whenever cuts were necessary protecting direct student contact (i.e. classroom teachers) while eliminating supervisory, administrative and coordinator resources. When cuts are necessary, this is a very sensible policy; but it can't continue forever. Teachers deprived of all fallback, coordination, resources, and rejuvenation will eventually collapse. The schools look good on the surface but are in fact hollow. What's necessary in lean times does not point the direction to take all the time.

Ipswich schools funding might have continued as it was without being a dire problem if state aid hadn't been reduced for several years, even though state aid pays only about 15% of the cost of our schools with the lion's share of about 85% generated locally. (Further, it seems that Ipswich doesn't currently get its "fair share" of state aid due to a quirk in the state's Chapter 70 formula which heavily penalizes Ipswich for funding its schools well decades ago.) The good part of shifting the tax burden from the state to the town is there's even more local control of what money is collected and how it's spent. But the bad part is such a shift also changes the kind of taxation: less income tax and sales tax, and more property tax. Retirees who live on small fixed incomes and don't buy much largely escape income tax and sales tax, but are often hit significantly by property tax. One terminology calls this a shift from "progressive" taxation to "regressive" taxation. In Massachusetts shifting the tax burden from state to local brings the side effect of shifting it onto individuals who are not part of the economy.

The shortage of funds is because there really is a problem rather than because those entrusted to manage the situation were careless.

How Does Our Per-Pupil Expenditure Compare To Surrounding Communities?

A comparison of overall ("integrated") per pupil expenditure as calculated by the state Department of Education —which is a measure of the true cost of education in different school districts— shows that the costs of Ipswich schools are almost at the bottom of those in surrounding communities. Ipswich schools provide education at a relatively low cost. (Our state changed the way it calculates per pupil cost in FY05, so earlier numbers are not directly comparable.)

As of early 2012, this table reflects the most recent available data.

Recent Per Pupil Expenditure Comparison
(highest at top, lowest at bottom)
Cost Per Pupil Over All Grades
(combined Regular and Special Education)
TownFY05
(2005-06)
FY06
(2006-07)
FY07
(2007-08)
FY08
(2008-09)
FY09
(2009-10)
FY10
(2010-11)
Hamilton
(Hamilton/Wenham)
$10568$10921$12105$12616$13955$14283
Wenham
(Hamilton/Wenham)
$10568$10921$12105$12616$13955$14283
Essex
(Manchester/Essex)
$11905$12436$12772$12998$13684$13582
Manchester
(Manchester/Essex)
$11905$12436$12772$12998$13684$13582
Andover$10487$11160$12025$12536$13122$13263
Rockport$10131$11019$12099$11436$11959$13068
Gloucester$9986$10351$8315$12044$12909$12812
Swampscott$10169$10546$10688$11875$12323$12448
Marblehead$9951$10810$11202$11133$11788$12235
Boxford
(Masconomet Secondary)
$9322$9922$10495$11391$11992$12161
Middleton
(Masconomet Secondary)
$9272$10363$10208$10900$11525$12044
Topsfield
(Masconomet Secondary)
$9248$9896$10838$11449$11879$11888
Newbury
(Triton)
$8898$9547$9792$10792$11263$11503
Rowley
(Triton)
$8898$9547$9792$10792$11263$11503
Salisbury
(Triton)
$8898$9547$9792$10792$11263$11503
Lynnfield$9575$9878$9715$10276$10600$10906
Ipswich$9042$9681$9734$10186$10679$10902
Georgetown$7445$7680$9532$8243$8595$9148

(Almost all numbers in the above table are simply copied from the original state DOE accounting reports. Numbers for Boxford, Middleton, and Topsfield however had to be calculated approximately, because each town has its own elementary schools while they share the Masconomet secondary school.)

(Because they are uncommon and because their reporting is so irregular, "revised" numbers have been ignored.)

Local Property Taxes

Overview

Local property taxes in Ipswich have risen significantly over what they were many years ago mainly because of projects undertaken around the turn of the century (new school building, new library extension, remodeled town hall) and the Open Space bond. At the same time, property prices (especially "waterfront") have soared because of easier access to growing Boston (for example long-time residents of Great Neck are being priced out of their homes). As a result, some of our residents on fixed incomes are having a hard time making ends meet. (Even though they're higher than they were many years ago, local property taxes in Ipswich are still not as high as in many surrounding communities.) Ipswich town government is very aware of the voices of stretched voters and is very skeptical about all spending.

How Do Our Taxes Compare To Surrounding Communities?
Tax Rates

Property tax rates have generally dropped in the past few years to compensate for property valuations going up. So a comparison of local property tax rates in surrounding towns shows that the tax rate in Ipswich is currently relatively low. (The comparison of average tax bills in the next table may be more meaningful, since the tax rate bounces around quite a bit as properties are reassessed and as communities grow.)

As of early 2012, this table reflects the most recent available data.

Local Property Tax Rate Comparison
(highest rate at top, lowest at bottom)
TownTax Rate
(FY10)
Hamilton16.29%
Wenham15.56%
Topsfield13.87%
Rowley12.50%
Boxford12.37%
Essex12.26%
Danvers (*)12.22%
Newburyport11.66%
Ipswich11.54%
Georgetown10.58%
Gloucester (*)10.49%
Newbury9.52%
Rockport8.96%

(*) This town has different tax rates for residential and for non-residential properties. The residential tax rate is shown.


Tax Bills

A comparison of average local property tax bills in surrounding towns shows that Ipswich taxes are somewhere in the middle of the range. (Note the tax bills for the towns near the bottom of the table differ by only small amounts -typically less than $100, while the tax bills for the towns near the top of the table differ by significant amounts -typically more than $500.) Of course, recent Ipswich property tax bills reflect payoffs for several projects (school building, library extension, town hall remodelling) as well as expenditures to date under the Open Space bond, all of which were begun in good economic times and may not reflect Ipswich's current fiscal priorities.

A more detailed comparison of local property taxes is also available if you want to know more than this sketch tells.

As of early 2012, this table reflects the most recent available data.

Average Local Residential Property Tax Bill Comparison
(highest bill at top, lowest at bottom)
TownAverage Residential
Parcel Valuation
(FY10)
Average Single
Family Tax Bill
(FY10)
Wenham$585,126$9,105
Hamilton$492,915$8,030
Boxford$618,372$7,649
Topsfield$532,305$7,383
Essex$545,337$6,686
Ipswich$456,271$5,265
Newburyport$451,108$5,260
Gloucester (*)$475,858$4,992
Rowley$387,562$4,845
Rockport$526,739$4,720
Danvers (*)$374,517$4,577
Newbury$461,116$4,390
Georgetown$412,477$4,364

(*) This town has different tax rates for residential and for non-residential.

Must Senior Citizens Pay Too?

Taxes that seem typical to family-aged adults may seem outrageous to senior citizens living on fixed incomes, partly because the value of a dollar has changed slowly but inexorably over time. A dollar's worth of goods in 1962 —near the time senior citizens paid their first tax bill— now costs $5.31. Because a dollar isn't what it used to be, property valuations and taxes have risen steeply. Tax bills in current dollars can place an unfair burden on someone whose retirement income is based on their old wage dollars that were stretched much less.

Advocacy cannot overcome a large number of negative votes from a frightened group who votes heavily. Parents should help an elderly neighbor investigate the avaliable property tax relief options. In many specific cases they'll be able to mitigate the unfairness. In the end getting appropriate relief will probably require not only digging around in websites, but also directly contacting the Assessor's office at Town Hall after learning what to ask (the Assessor's Office, which implements specific relief arrangements, is not a source of advice, and may not necessarily volunteer information about all available options). The Ipswich Council on Aging (COA) is a good source for advice and support. (Senior citizens should also investigate the "circuit breaker" state income tax deduction.) These reductions may allow senior citizens to vote for better support for Ipswich schools without themselves becoming the target of an outrageously high tax burden.

It might seem counter-intuitive to increase school funding by reducing the local tax base. How will aiding a senior to get tax relief help the schools? By reducing the tax liability of the senior citizen, their fear of an override is reduced, perhaps even to the point of eliminating one negative vote. And the contact may give parents the opportunity to get their senior citizen to view their kids more like grandkids than pests.

What Is "The Feoffees Of The Grammar School" And Can It Fund Our Schools?

The Feoffees of the Grammar School is an (approximately) 350 year old trust which benefits the Town of Ipswich, in particular its public schools. Until quite recently, the sole asset of the trust was its ownership of all the land (but not most of the buildings) on Little Neck (reachable by going through Great Neck and past Pavilion Beach).

The trust was initiated by the will of William Paine with the words "unto the free scoole of Ipswitch the little neck of land at Ipswitch knowne as Jeferry's neck, the which is to be and remaine to the benefitt of the said scoole ... for ever as I have formerly intended and therefore for the sayd land not to be sould nor wasted." A decade previously, the state legislature had commanded each town to provide a school to train the elite boys, mainly for Harvard (different from universal public education, which was mandated well over a century later), but Ipswich town meeting had never properly funded their school. So William Paine's bequest may have been an example of an elite person using their wealth to force the rest of the town to do something it didn't want to (or maybe of burnishing one's reputation by very publicly donating then-worthless real estate to a good cause).

At some point lost in the mists of history, the trust began to benefit a universal public school open to all. It's not entirely clear whether this was a different school, or an abrupt change in policy of the existing school, or a gradual change of community mores.

Because of the trust, it would seem that, unlike most towns, the Ipswich public schools have another source of funding besides local and state taxes. However, there has been a longstanding fear that the state would simply deduct the proceeds of the trust before it sent any state tax monies, so the net to Ipswich schools would be the same as if the trust didn't exist. Although this hasn't actually happened, the fear appears to have been realistic. In particular this fear may partly explain the very low trust proceeds in the latter half of the last century.

The trust's terms were clarified and updated by the Massachusetts General Court (i.e. the state legislature) in about 1765, and again by a series of court cases centered around the Massachusetts Probate Court beginning after 2001 and ending in 2012. As part of the recent update, the trust was converted from a land trust to a money trust. (Unfortunately the only available legal term was break the will, which doesn't really fit converting from a land trust to a money trust and commencing ongoing investment, which is what actually happened. It suggests instead dissolving the trust and spending all the sale proceeds, which did not happen.)

This trust is often called The Feoffees of the Grammar School or just The Feoffees. Feoffee is an antique word that could be rendered as trustee today (it once had a very specific legal meaning though, one that was already becoming obsolete back in England when it was first used here, and never really applied here anyway). Although originally The Feoffees had a separate existence and managed many things besides the Little Neck land, all the other assets have been sold off (and the proceeds not rolled over into endowment funds as they were supposed to be). The Feoffees only remaining asset is related to Little Neck, so it's been customary recently to use the Little Neck trust and The Feoffees of the Grammar School interchangeably.

Over a century ago the Little Neck property was subdivided into lots, and has since been managed as a summer colony. Most of its houses are occupied only in the summer, by people from other towns or states. That arrangement was similar to the old Conomo Point in Essex and to Long Beach in Rockport. It was originally a very sensible arrangement, with Ipswich trading what it had (great seascapes) for what it needed (cash). The fact all the land was owned by a single rather odd trust was seen as nothing more than a quaint legal anomaly. For at least most of the latter part of the 20th century, the trust didn't generate very much money for Ipswich.

Regular property taxes were always collected on all Little Neck properties; the trust did not exempt the properties from any taxes. (Tenants paid taxes on both their houses [which they've always owned] and on the property under their houses [which they formerly rented from The Feoffees], with some payments being made directly to the town and others conveyed via the Feoffees; The Feoffees paid the property taxes on both common lands and shared facilities.) The Feoffees have in the past severely discouraged most year-round residence (probably mostly because of inadequate waste disposal; Little Neck is a barely-permeable hard rock formation). As a result of being mainly a summer colony, Little Neck sent almost no students to Ipswich public schools. In the past, property tax income from homes without students has benefitted Ipswich schools significantly; in fact it's possible that in some years households paying property taxes but not sending any students to school benefitted Ipswich Schools more than the more direct Feoffees contribution.

Through the years cash contributions from The Feoffees (but not the property taxes) have been earmarked for a specific purpose and have been off book so they were not used to cut local taxes (nor deducted from state aid payments, which was and still is a real and realistic fear). Fear of having the moneys deducted from state aid payments is the reason behind the tradition of using The Feoffees contributions for enrichment. With the agreement of The Feoffees, sometimes during an emergency Feoffees monies have been folded into the regular school budget rather than used for enrichment. But such use is of somewhat dubious legality, certainly frowned on, and most definitely cannot be counted on. Any school district budget item that's moved to Feoffees and not moved back the very next year is effectively being set up for sudden discontinuance.

Feoffees contributions have varied widely over the years: several grants to individual projects, a single grant to the whole school district, small amounts, very small amounts, and in a few cases either no contribution at all or a contribution to the town's General Fund rather than the schools. The total amounts of these Feoffees contributions were consistently very small for many decades in the last century, raising the question of what were fair rental fees to charge for Little Neck residency. (Here's a graph of yearly Feoffee contributions.)

The Feoffees started both to raise property rental fees to current market values and to make regular significant contributions to the school district in the mid nineteen-nineties. Even so, the initial contributions were small —typically $25,000 or $50,000— because at that time the trust had to cover its previous large capital expenditures (such as a wharf or dock shared by the Little Neck residents). In recent years when The Feoffees were no longer limited by their previous capital expenditures, they contributed considerably more than $250,000 per year to the school district.

Then an additional irritant to the Little Neck residents on top of market-rate rental fees occurred after 2005. The Feoffees had to undertake a near-emergency drastic sewering of all of mostly-rock Little Neck. Cost overruns ballooned hugely, so the final cost was more than double the original estimate. The Feoffees simply added the final cost of this sewering project to proposed new rental fees.

The strenuous efforts to collect market-rate rental fees, skyrocketing waterfront property values, and especially the huge cost overruns of the sewering project, eventually resulted in a Little Neck renters' revolt/strike, and subsequent lawsuits and disagreements over the conversion from a land trust to a money trust and the future structure of The Feoffees. The Feoffees agreed to temporarily put all eviction procedings on hold until the lawsuits were resolved, in return for the tenants at least continuing to pay them the previous level of rental fees and paying the disputed increase into an escrow account for several years. As a result of the rental fees dispute, The Old Feoffees were unable to contribute any money at all to Ipswich schools for the school years 2007-2008, 2008-2009, 2009-2010, or 2010-2011. As part of the legal settlement, the New Feoffees made the first of three $800,000 payments to the schools in September 2012. (Some of the delayed moneys were loaned to the schools by the town back when the lawsuits were expected to be resolved more quickly; legal fees advanced by the town are now being repayed as part of the settlement.)

The lawsuits and challenges wound down in winter 2011/2012, and ended altogether in November 2012. Regular Feoffees contributions to the schools will now recommence. For the first three years after the settlement the amount is set at about $800,000. After that, the exact amount of contributions will be affected first by the need to pay off all current debts (The Feoffees money endowment will be the net amount, different from the full Little Neck sale price) then second by prevailing interest rates and other financial and investment concerns. Very rough contribution estimates have ranged from somewhat below $½M (i.e. less than half a million dollars) up close to $¾M (i.e. nearly three quarters of a million dollars) each year. Some estimates show the trust generating significantly more income than it did previously before the trust's asset was converted from land to money.

Although the amounts may seem large, they're really small in comparison to the total school budget; reasonable Feoffees income is only a few percent of the total school budget. Even if they weren't restricted to enrichment items, Feoffees dollars wouldn't be anywhere near enough to solve Ipswich schools funding problems. So the answer to the qestion that heads this section is: yes, but....

State School Funding Aid

Schools are paid for mostly by local property taxes, but not entirely. Reimbursements from the State of Massachusetts are also important. This money is called "State Aid" or "Chapter 70" and is typically over a tenth of a total school budget. The exact amount of state aid to each town is calculated by a very complicated formula and announced each year via "Cherry Sheets".

In Ipswich, the procedure has always been to combine school (Chapter 70) and town state aid, then re-split the money 60% for the town and 40% for the schools. Doing so provides both our town and our schools a bit of a buffer against any possible dramatic fluctuations in only some parts of state aid. (The 60/40 split does not include the state's financial assistance toward paying the bond for the new school building.)

In the past the state of Massachusetts also offered very liberal financial assistance for the construction of new school buildings. This assistance was later considerably restricted because the state was going broke spending money for things different from what it had expected. The new school building in Ipswich though was launched before the state program changed, so significant financial assistance is still being provided under the old rules.

The formula by which the exact amount of state aid is calculated is called the "Chapter 70 Formula" and originated in the Education Reform Act (ERA) in 1993. It includes some historical factors that arguably aren't as important as they once were. The formula is reputed to be so exceedingly complicated that it's difficult to tell exactly what's going on. (Some web documents explaining the formula so it isn't quite as mysterious became available after this was written, and the too complicated judgment that was once simply the universally agreed conventional wisdom now provokes some disagreement.) Any change in the formula would affect the finances of every school in the whole state, and because of all the unforeseen side effects would likely cause more problems than it solved, so changes have not been encouraged. (The whole situation calls into question the wisdom of having created such a complicated formula in the first place...)

In any case, for reasons which are arguably not reasonable (nor even fully understood), Ipswich gets several hundred dollars less per pupil in state aid than surrounding towns such as Hamilton and Wenham. One probable explanation for this is Ipswich is viewed as being able to afford to pay more for education (particularly because its taxpayer contribution to education was higher than surrounding towns in 1993 - which may have been an anomaly even back then, and is certainly neither true nor reasonable any more. Another probable explanation for this is the formula has been tweaked over the years and is now most definitely slanted toward "urban" communities at the expense of "suburban" communities such as Ipswich.

In the future, Ipswich might team up with other "suburban" communities to lobby for a change in the Chapter 70 Formula. (Although our state representatives worked on this problem for several years, it eventually became very clear that Ipswich alone didn't have the legislative clout to force a change. Teaming up with other towns now seems the only way forward.) Because the state bureaucracy moves so slowly, any such effort would take several years. Any attempt that expected to see tangible results at the end of only one year is bound to fail (and is a waste of time); only a multi-year effort has any chance of succeeding. Whether or not it's "fair", funding of Ipswich schools in the short term will be a purely local matter to be decided by the town of Ipswich itself.

Public Advocacy

My experience is that effective advocacy is necessary to make any modifications to school funding that involve taxes or an election in the Town of Ipswich. If advocacy is insufficient, the proposed modification will fail, and this failure will set up the expectation of further failures in the future.

Legal Formalities

For every proposed modification involving an election, there should be a locally registered coordinating organization. According to Massachusetts state law, that umbrella organization must

These formalities are quite simple, requiring only a little thought and a few minutes. But don't try to fudge them, as doing so can cause a lot of trouble including significant fines and possibly even nullification of election results. If in doubt, err on the safe side by registering.

Although Parent Teacher Organizations will probably be deeply involved in override advocacy, and even though "Municipal Ballot Question Committee" officers may also be significant PTO members, to avoid running afoul of state campaign finance laws the PTO should not itself be the coordinating organization. The "Municipal Ballot Question Committee" should always

All-Out Advocacy Provided By Parent-Teacher Organizations

In the past, the Parent-Teacher Organizations in the Town of Ipswich have been overly reluctant to "get involved in politics". But even though an election is involved, any campaign (such as an override election) is really about parents advocating for their kids, not about "politics". The State of Massachusetts does more than just permit Parent-Teacher Organizations to advocate for overrides - it expects and even encourages it. Most likely past over-squeamishness was based on a misunderstanding of some historical events and the complexity of the regulations. Parent-Teacher Organization advocacy is too important to completely forego just to stay as far away as possible from any penalty.

The State of Massachusetts fully expects PTOs to be deeply involved in advocating for an override (albeit within fairly detailed restrictions, due mostly to close interpretation of the state's campaign finance law). Sending home a flyer with every student is generally not allowed because it almost inevitably involves using a public resource (in particular teachers' time) to influence an election. (Note this interpretation has changed recently; less current information may incorrectly suggest a different course of action.) It makes no difference that no mailing list nor postage nor use of a school copying machine is involved. It may be simplest to steer completely clear of anything that might be interpreted as "use of public resources for political purposes" by distributing all materials via mail, email, social networking, websites, and other media that don't involve teachers touching the material at all.

The State of Massachusetts provides a lot of legal advice in this area. Particularly intriguing are the recent Advisory Opinion AO-07-03 which is summarized School officials may use automated phone system to advise parents of the date of an election and also to encourage them to vote. Extreme care should be taken to avoid any comment regarding the merits of a ballot question or any appearance of advocacy. and the paragraph in Interpretive Bulletin IB-91-01 that says In addition, public resources may be used to distribute information that simply advises voters of an upcoming vote, such as a notice of the time, date and place of a municipal election. In addition, such information may urge people to vote, and provide information about how to register to vote. Also, such information may include a brief neutral title describing the ballot question, and the text of the ballot question. Extreme care should be taken to avoid any appearance of advocacy. For example, the title 'school expansion project' would be appropriate. On the other hand, titles which would not be appropriate include 'ballot question relating to need for school expansion,' or 'ballot question addressing school overcrowding problem.'

Advocacy References

Rather than attempt to provide detailed legal interpretations and advice on this rather complex subject, here are some original materials which you can peruse yourself. Almost all these materials are written for non-professional readers; you don't need a law degree to make use of them.

Some Other Sources of Information


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