Chelsea Public Schools projected a $22.3 million budget shortfall for FY2028 at an Oct. 7, 2026 School Committee meeting, according to a report in chelseamass.net. Chief of Finance and Operations Billie Jo Turner presented the figures, noting that they are early estimates pending state revenue numbers expected in January. Superintendent Almi Abeyta said the district has added roughly 240 positions over six years using Student Opportunity Act funding, and that the projected gap would likely offset those staffing increases. School Committee member Sarah Neville calculated that the $22.3 million shortfall corresponds to approximately 223 positions.
Budget breakdown
The district's projection, as described in the chelseamass.net report, breaks down the $22.3 million gap as follows:
- $6.6 million in lost state aid from approximately 304 fewer students, at roughly $22,000 each
- $6.7 million for salary increases from step raises and cost-of-living adjustments
- $2.5 million for health insurance, pensions, and similar costs
- $1.5 million for special education tuition increases (covering only a 5 percent rate increase)
- $2.5 million for transportation
- $2.5 million for utilities and insurance
Enrollment decline and cost pressures
Chelsea's enrollment stood at 5,446 on Oct. 1, the district said, representing a loss of approximately 650 students over the prior two years. Most of the students lost were multilingual learners and low-income students, which reduced state aid in those weighted categories. The district projects a further decline of about 304 students for FY2028. The cumulative enrollment drop significantly reduces the revenue gained from per-pupil funding increases under the Student Opportunity Act. Chelsea's per-pupil state funding rose from $16,078 in FY2021 to $23,586 in FY2027, according to the district's budget book, but the net revenue increase in FY2027 was only $6.38 million, and after charter school adjustments, $5.357 million.
Rising costs are also pressing the district. The $6.7 million in salary increases reflects step increases and cost-of-living raises, and the $2.5 million for health insurance and pensions covers mandatory increases. Transportation companies have warned districts to expect 40 to 60 percent increases; Chelsea projected a $2.5 million increase, which Turner indicated may fall below the full expected cost. Special education tuition is increasing 5 percent at out-of-district placements. The projected utilities and insurance increase of $2.5 million is part of the broader cost growth that the district says outpaces the inflation adjustment built into the state's Chapter 70 formula.
Similar pressures across the state
Chelsea's situation is part of a broader pattern in Massachusetts. Worcester Public Schools faced a $22 million shortfall for FY2025 and cut roughly 300 positions, including teachers, support staff, and administrators. Superintendent Rachel Monárrez noted at the time that salaries account for 85 percent of the budget, which narrows the options for reducing spending. Braintree faced a $4 million gap and laid off about 40 staff members, though a Proposition 2½ tax override halved the planned cuts. Brockton faced a shortfall of $19 million to $25 million, with transportation costs more than double the budgeted amount; a state-commissioned review found financial mismanagement.
A MassBudget analysis of Chapter 70 funding found that 219 school districts received less state aid than they would have with a full inflation adjustment, with an average gap of $2.1 million per district. The underfunding was largest in Gateway Cities like Springfield, which depend heavily on state funding. The analysis said the 4.5 percent inflation cap, applied in FY2023 and FY2024 when inflation was about 7 and 8 percent, respectively, produced a cumulative gap of about 6 percent over two years. It estimated that correcting for the missed inflation would require $465 million in additional aid in FY2025, rising to $489 million by FY2027, with more than half directed to Gateway Cities. The analysis concluded that the cap is limiting the value of the Student Opportunity Act reforms.
Other districts facing reductions include Pittsfield, which lost about 1,000 students over the past decade, and Northampton and Amherst, which have each faced potential cuts of 15 to 30 positions, all driven by a combination of enrollment decline, expiring pandemic relief funds, and rising costs.
Research on the funding formula
A study by the Massachusetts Taxpayers Foundation found that the Student Opportunity Act drove $1.052 billion in foundation budget growth between FY2021 and FY2024, with the foundation budget growing 20 percent compared to an estimated 11 percent without the law. However, high inflation and enrollment declines have created overlapping effects that complicate evaluation of the law's impact. The report also noted that the pre-SOA formula had been underestimating special education costs by $1 billion and health insurance costs by $1.1 billion as of FY2010.
A separate MassBudget analysis examined what it called the 'inflation glitch' in the Chapter 70 formula: when the 4.5 percent cap reduces aid below what inflation would have provided, that reduction is locked in permanently and reduces all future aid. The analysis said the mechanism was altered inadvertently about a decade after the original law passed. The underfunding disproportionately affects districts that rely most on state aid, particularly Gateway Cities.
State data for FY2027 shows the gap between actual costs and the formula's cap. The employee benefits inflation rate was 8.29 percent, while the general foundation budget inflation rate was 2.76 percent, well below the 4.5 percent cap. Statewide, foundation enrollment fell by 14,626 students from FY2026 to FY2027, with 235 districts seeing decreases and only 82 increases.