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Some education funding restored in House budget

Executive Summary

The House Ways and Means Committee has released its version of the FY05* budget.  The state is facing a $1.5 billion deficit and as a result, the $22.5 billion budget does not restore many of the programmatic cuts to public education preK-graduate school.  However, for the most part, the House budget proposal does not make the deep cuts that public education has faced in the past three years.

To make up for the budget deficit of approximately $1.5 billion, the House will use nearly $700 million in reserves (one-time funds) and federal one-time funds and will close some corporate tax loopholes and make cuts in some programs.  While this allows the House to propose a balanced budget for this fiscal year, it does nothing to deal with the structural deficit.  Increasing revenues is the only way to close the deficit without making additional cuts.

PreK-12 Education Budget
The House proposes increases in funding for preK-12 in several areas, including special education, regional school transportation, charter school reimbursement and the METCO program.  Chapter 70, state aid to local school districts, has been increased $75 million over last year, when Chapter 70 was cut by $148 million.

Despite these increases, other important programs, such as full-day kindergarten, early childhood education and literacy programs, were level-funded from last year-after two years of cuts.  Because of inflation, the programs that were level-funded are again essentially cut.  The successful class size reduction program, which was eliminated last year, is not restored.

Other local aid accounts (Lottery and Additional Assistance) to cities and towns that had been cut in the past two years was level-funded. Up to 50 percent of this local aid is used for public education.

According to a recent study by Andrew Reschovsky of the University of Wisconsin in Madison, the Commonwealth cut funding per pupil more than any other state.  State funding dropped by 14.3 percent between FY02 and FY04, while the average for other states was 4 percent.

Higher Education Funding
Unlike the governor's budget, the House proposal fully funds the contracts that had remained unfunded for three years until the Legislature unanimously funded them last November. Included in the House Ways and Means recommendation is $68 million to fund higher education contracts for FY05. The first retroactive payment of $34 million is due to be paid by June 30, 2004, and is scheduled to be included in a separately funded supplementary budget later this spring.

However, the FY05 budget does not begin to restore the major cuts in overall funding for public higher education.  Funds for the campuses have been cut by 26 percent in real dollars in the past three years.  

A study conducted by Illinois State University ranked Massachusetts near the bottom at 49th among the 50 states in state support for public higher education as a share of personal income in 2004.

Employee Rights and Benefits
The House Ways and Means budget does not include any of the destructive proposals made by Gov. Mitt Romney to undo the guaranteed pension system or erode collective bargaining rights for public employees, change health insurance premium rates for state employees or change the protections of the civil service system.

This turn of events was due in large measure to MTA lobbying during the past two months and the thousands of calls, letters, e-mails and postcards from MTA members to their legislators. 

The following are the highlights of the House Ways and Means FY05 budget proposal.

Pre-K-12 - Some Funding Restored

Chapter 70
The proposed increase to Chapter 70 of $75 million is little over half of the $148 million cut from Chapter 70 in FY04.  The total appropriation for Chapter 70 for FY05 would be $3.18 billion.  

Other Local Aid (Lottery, Additional Assistance and PILOT)
The House Ways and Means budget proposes to fund the two major (Lottery and Additional Assistance) other local aid accounts at the FY04 level.  Because many communities rely on these state aid accounts in addition to Chapter 70 to fund their schools, the failure to increase these accounts will mean that local spending on education will not be able to keep pace with inflation. The PILOT (Payment in Lieu of Taxes) account received a 2.5 percent increase to $10 million that will help communities with state properties that do not pay local property taxes.

Special Education
Increased funding for special need students by $80 million over FY04 ($201.6 million total).

Regional School Transportation
Increased funding by $11.6 million over FY04 ($38 million total) for regional transportation reimbursement program. 

METCO-Racial Imbalance Program
Increased by $2 million over FY04 ($15.6 million total).

School Based Health Program
Restored the School Based Health Program funding school nurses ($12.6 million) that the Governor eliminated in his FY05 budget proposal.

MCAS
Does not include governor's proposal to increase funding for expanded MCAS testing or a new scholarship program for students who score in the top 25 percent on the MCAS tests.  Increased remediation funding for underperforming schools and districts:

• Student and School Assessment (MCAS) - level funded at FY04 level ($18.7 million) funding for test administration and school assessment.
• MCAS Low-Scoring Student Support - increased funding over FY04 level by $4 million ($14 million total). Additional $4 million is targeted to schools and districts at risk of or determined to be "underperforming."
   

Charter Schools
Unlike the governor, does not lift the current caps on charter schools.  Instead, House Ways and Means fully funded the statutorily required reimbursement program.

• Charter School Reimbursement - $38.7 million for reimbursement to districts faced with new or expanding charters (reimbursement is set at 100 percent the first year; 60 percent the second; 40 percent the third; and, 0 percent the fourth year and after).
• Start-up grants for charter schools - funded at FY04 level ($2.3 million).
   

Education Grant Program
In the past two budgets, funding for educationally recognized programs such as class size reduction, early childhood education and comprehensive health education has been severely reduced or eliminated.  House Ways and Means funded most programs that were funded in FY04, but at the reduced FY04 level.  Given increased needs and inflation, this means that most programs were actually cut:

• Class Size Reduction for Low-Income Districts - not funded.
• Comprehensive Health Education Programs - not funded.
• Racial Imbalance Grants (Chapter 636) - not funded.
• Full-day kindergarten - funded at FY04 level ($23 million).
• Early literacy programs - funded at FY04 level ($3.9 million and $1.9 million).
• Transportation for pupils (Non-regional schools) - not funded.
• School breakfast programs - funded at FY04 level ($2.3 million and $2 million for universal eligibility).
• Early childhood education - funded at FY04 level ($74.6 million).

Higher Education

The number one priority of the MTA since last fall has been the funding of the unfunded contracts.  The House proposed budget does that.  Press reports have indicated that public higher education was cut between 1 percent and 2 percent.  However, when the monies for the contracts are included in the budgets for the campuses, there is no cut from last year's budget.

Campus Budgets

• UMass receives a $20.9 million or 5.3 percent increase over FY04 when tuition retention and the estimated allocation of collective bargaining funds are included.
• State colleges receive an increase of 1.1 percent or $1.9 million when the estimated allocation of collective bargaining funds (for APA contract) are included.
• Community colleges' funding increases by 1.1 percent or $1.9 million when the estimated allocation of collective bargaining funds (for AFSCME contract) are included.
   

The Community College Workforce Training Program receives an increase of $2 million or 222.2 percent.

The Health and Welfare line item has increased by $945,974.

There are no funds for the library or reference materials appropriated.

Employee Rights and Benefits 

Romney's Anti-Public Employee Proposals Rejected
The House Ways and Means Committee is recommending to the House of Representatives that all of the governor's recommendations affecting public employee rights and benefits be rejected.

• The House Ways and Means budget does not include any of the governor's "take-back" proposals relating to public employee benefits, such as pensions and health insurance. 
• As mentioned above, it leaves intact collective bargaining and civil service protections. 
• It is anticipated that some of the governor's recommendations may be offered as amendments when the entire House debates the budget during the last week in April. The House leadership supports defeating such amendments, and this support will be very helpful in keeping the governor's anti-public employee "reforms" out of the House budget.

Retiree COLA
A retiree cost-of-living adjustment (COLA) of 3 percent on the first $12,000 of retirement income has been included in the House Ways and Means recommendations. Non-teacher local employees would need local approval to effectuate the COLA. 
 
 
 
*The state's fiscal year runs from July 1 through June 30.