Proposed Senate budget reflects economic downturn
The Senate Ways and Means Committee has released its proposed budget for the fiscal year that begins July 1. Reflecting a projected economic slowdown, the proposal contains virtually no new initiatives.
The $28 billion budget does, however, provide increased funding for Chapter 70 state aid to local school districts, and to public higher education. A number of grants also see modest increases. The Senate did not include an increase in the health insurance premium shares for state employees that was included in the governor’s budget and initially in the House proposal.
The state is facing a deficit of more than $1 billion. The state anticipates that it will take in more than $1 billion less in state revenues than is needed to fund current programs.
To balance the budget, Senate Ways and Means makes some small cuts, takes money out of the rainy day fund and increases revenues by closing corporate tax loopholes. It takes less money out of the rainy day fund than does the House budget. This is because the Senate’s tax reform legislation provides a smaller and less immediate rate cut than the House’s. Therefore, the Senate’s proposal brings in more revenues this upcoming year. The House-passed legislation, in fact, opens new loopholes and reduces the amount of new revenue.
The Senate budget will be debated the week of May 19th. Amendments to the budget must be filed by mid-day May16.
Below are highlights of the Senate Ways and Means proposal:
The Senate Ways and Means budget increases Chapter 70 aid by $223 million, a 5.9 percent increase over FY08, the same as the governor proposed and the House passed.
Senate Ways and Means proposed the following increases over FY08:
- $61.3 million for Regional School Transportation, an increase of $3 million from FY08. The governor proposed level funding while the House budget also funded this at $61.3 million.
- $17.5 million for Extended Learning Time Grants, an increase of $4.5 million from FY08. The governor proposed doubling this line item from $13 million to $26 million. The House proposal also funded this program at $17.5 million.
- $5.45 million for After School Programs, an increase of $3.45 million from FY08. The governor had proposed level funding this program at $2 million, while the House provided a $3 million increase to $5 million.
Senate Ways and Means proposes the following cuts or level funding:
- Elimination of the Foundation Budget Reserve, which was funded at $5.5 million in FY08. The governor had proposed level funding while the House budget included $3.5 million.
- $2.3 million cut in MCAS Low Scoring Student Support, which is funded at $11 million. The governor proposed increasing this line item by $2.2 million, while the House level funded.
- Kindergarten Expansion Grants level funded at $33.8 million. The governor proposed an increase of $8.4 million while the House level funded these grants.
- METCO level funded at $20.6 million. The governor proposed increasing funding by $1.5 million, while the House increased funding by $1 million to $21.6 million.
- Increases funding for state colleges 2.5 percent over FY08 ($5.5 million). This is the same increase as included in the House budget.
- Community colleges funding increases by 3.7 percent over FY08 budget ($8.9 million). This House funds the community colleges at the same level.
- Increases funding for UMass 5.2 percent over FY08 ($26 million). This represents a $2 million increase over the House-passed budget.
- The scholarship account was essentially funded at the same level as the House. This is a 3.2 percent increase over the FY08 budget.
- The newly created Department of Higher Education (formerly known as the BHE) saw its account increase by $2 million over the House budget to $6.5 million.
- Increases the base to which a COLA is applied from $12,000 to $16,000, effective July1, 2008, for retired teachers and state employees.Authorizes local retirement boards to approve a similar increase for retired municipal and county employees.
- Sets the retiree COLA increase at three percent for FY09.
- State employee health insurance premium shares remain the same at 85-15 for those hired before 7/1/03 and 80-20 for those hired after 6/30/03.