BOSTON — A seven-year education funding reform plan Gov. Charlie Baker is filing Wednesday would increase K-12 school funding by more than $1 billion, phasing in new money to address special education, employee health care, and the costs of educating low-income students and English language learners.

The bulk of Baker's proposal, which he is filing with his fiscal 2020 budget, addresses what's known as the foundation budget, the minimum amount of state and municipal money a community must spend on its schools. The foundation budget is determined by a formula and varies based on district demographics.

The plan comes more than three years after a state Foundation Budget Review Commission, in September 2015, reported that the current formula underestimates the cost of education by $1 billion to $2 billion a year by inadequately accounting for four major cost drivers.

Baker is proposing increases in spending for each of those four areas — health care, special education, low-income students and English language learners.

His fiscal 2020 budget will include more than $200 million in new Chapter 70 state education aid. Education Secretary James Peyser said money will be targeted to communities that need it most, with 85 percent of the increase next year going to high-need districts.

By fiscal 2026, according to the Baker administration, the governor's plans would increase the total foundation budget by $1.1 billion in today's dollars, or $3.3 billion after accounting for inflation.

Peyser said the administration believes it can reach that point with existing revenues. He said successful management of spending growth at MassHealth, the state Medicaid program, helped enable new investments in education.

Along with the state funding increases, municipalities would also need to step up their local school funding to reach the higher foundation budget level. Peyser said opting to expand the foundation budget beyond what Baker is proposing could create a situation where communities are faced with a burden they cannot fulfill.

Peyser said city of Lawrence, for example, would get between $9 million and $10 million in additional state aid in the first year of Baker's reforms and would be required to come up with $1 million and $1.5 million in new local revenues for schools.

Baker's plan would also give the state education commissioner new authority around underperforming schools, including the ability to withhold some state aid from districts where struggling schools are deemed not to be sufficiently improving and are not taking steps required under their turnaround plan. The funds, which would go into a new trust fund for future use in those districts, could not be withheld from schools or direct student services but could come from central office administration.

Baker's budget would also create a Public School Regionalization Trust Fund that would provide grants to districts looking to collaborate, merge and share services. The money, Peyser said, would address the squeeze felt particularly by rural schools where declining enrollments can create a budget crisis.

Baker is also proposing to change the way school districts are reimbursed when students who live in their district attend charter schools. His budget seeks to move the formula to a three-year schedule, with 100 percent reimbursement the first year, 60 percent in the second year, and 40 percent in the third year.

Peyser said the current six-year formula has never been fully funded and the administration believes the three year version could be.

There would also be a new minimum reimbursement for communities that spend more than 9 percent of their net school spending on charter tuition payments.