Earlier this year, in a ruling that took many by surprise, the Supreme Judicial Court rejected a case that challenged the adequacy of state funding for public schools. Acting against the advice of a Superior Court judge, the SJC’s ruling in the Hancock case dismissed claims that the state was failing to meet its constitutional obligations.

Many municipal leaders were very disappointed with the ruling because of the very legitimate concern that it would be much more difficult to force a renewal and reinvestment in Chapter 70 education aid without the power of a court action compelling state officials to act.

With most communities suffering from deep education aid reductions imposed during the state’s fiscal crisis, and with two-thirds of all cities and towns receiving nothing in the way of new or replenished school aid funds under the current Foundation budget formula, the Hancock ruling was more than a missed opportunity – it was a potential excuse to ignore or push the matter to next year or beyond.

Fortunately, many legislators recognize that standing in place is not a solution.

First, during the House budget debate in April, the members unanimously adopted an MMA-backed amendment adding $28.4 million to Chapter 70, guaranteeing that each city, town and school district would receive a minimum increase of $50 per student in fiscal 2006.

Next, the Senate Ways and Means Committee, chaired by Sen. Therese Murray, not only incorporated these funds into its budget recommendation, the panel went much farther. Sen. Murray’s committee, along with the entire Senate, established a $55 million reserve fund to allow the Legislature to expand Chapter 70, address problems of equity with the current distribution, and provide a much greater increase in education aid before the 2005-06 school year begins.

Of course a lot needs to happen in order for these funds to become real for localities. First, the House-Senate budget conference committee will need to adopt the full Chapter 70 reserve fund and include it in their joint budget for fiscal 2006. Next, the governor will need to sign it into law. Then the Legislature will need to enact a comprehensive measure to renew and re-energize the Foundation Budget funding framework.

The Senate passed a version of a plan last year, but the House did not consider the matter before the end of the session, choosing instead to wait for the Hancock ruling. The formula is so complicated, and there are so many ways of perceiving and defining the issues of adequacy, equity and stability, that reaching a consensus will be very difficult. But this work is vitally important, and we should all thank our Senators for laying the groundwork for these discussions.

The MMA has identified a series of essential components that we believe should be incorporated into the law to ensure that all communities will benefit from this opportunity.

First, it is clear that the Foundation Budget does not represent an adequate level of spending, and there should be a comprehensive review of the Foundation Budget to re-evaluate and expand the components to ensure that all education costs are included and incorporated.

Currently, the state lags behind much of the nation, and is only providing 37 percent of statewide school spending through Chapter 70 (down from 41 percent just three years ago). Massachusetts should establish a firm overall statewide goal of a 50-50 state-local share to be implemented over time. Not only would this reflect a balanced and fair division of resources that would make the state an equal financing partner; it also would recognize the realities and constraints of Proposition 2 1/2 and provide a less regressive funding base for education in the commonwealth than what we have now.

There should be no negative impact on vital municipal aid accounts or Lottery distributions. Cities and towns desperately need the state to reinvest in general local aid and end the Lottery diversion, and efforts to boost school funding cannot come at the expense of other local services. That would merely be a form of earmarking or diverting resources away from public safety and essential public services.

For stability and equity purposes, future Chapter 70 funding should include strong minimum-aid and hold-harmless provisions for all school districts, use median household income as a factor to determine local ability to pay, and have a broad and fair approach to the local required contribution.

Cities and towns are in fiscal distress, with deeply reduced services and work forces due to the local aid cuts that were imposed during the state fiscal crisis, and a greater reliance on the regressive property tax than at any time since fiscal 1982 – 23 fiscal years ago. The only way that communities can overcome this distress and return to full financial health with enough strength to fully serve the people of Massachusetts will be through a genuine fiscal partnership with the state that includes adequate resources for municipal and school services.

The bottom line is that the Senate has included approximately $160 million in its fiscal 2006 budget for Chapter 70 aid, a huge increase over the $77 million included in the governor’s original submission. Putting these funds to work in time to make an immediate difference will require a huge commitment and effort by state and local officials over the coming weeks.

This is a great challenge and a great opportunity.