Senate budget analysis

The Senate Ways and Means Committee released its proposed FY04 budget Wednesday, May 21. The proposal totals $22.6 billion -- roughly the same bottom line as the Governor's budget proposal and the House passed budget. The Senate budget, like the Governor's and the House's, does not increase taxes though all the plans increase fees. As a result of no significant revenue increase, which the Senate cannot initiate, the Senate's budget, like the other plans, makes deep cuts in public education in order to fill the projected $3 billion shortfall.

What's Next

The Senate will begin debate on the budget on May 28th. Proposals to amend the Senate budget had to be submitted by Friday, May 23rd. However, the rules preclude most amendments that would undo the damage of the budget proposal because amendments cannot add money to the budget unless the money is taken from other programs.

After the Senate passes a budget, the House and Senate conferees will meet to iron out the differences between the two versions. Then the agreed upon budget will be sent to the Governor for his signature or veto.

Below is a summary of the Senate Ways and Means budget.

K-12 Education and Local Aid

  • Chapter 70 -- education aid to cities and towns -- cut by $120 million (a 3.7% overall cut); the maximum cut to communities would be 15.5% (as compared with 20% in the House budget). This will mean larger class sizes and the elimination of valuable educational programs in many communities. This is the first time in a decade that Chapter 70 has not been increased. Adjusted for inflation and enrollment changes, the cut is $192 million.
  • Lottery aid and Additional Assistance -- the two major categories of non-education local aid -- cut by $69 million, a 15% cut from the FY03 appropriation. 6.2% has already been cut from the current budget by the governor in January. Local aid is spent on a range of municipal services, up to half of these funds may go to education.

Comparison of the Senate budget proposal with the House budget:

  • Restores $18 million for class size reduction grants that the Governor and House eliminated.
  • Funds early childhood education, including the Community Partnership for Children program that will continue to be funded through the Department of Education, as the House budget also does. However, both budgets cut funding by 21% ($20 million) from the current budget.
  • Both House and Senate eliminate reimbursement for non-regional school transportation, but the Senate restores partial funding to regional school transportation ($30 million, a 28% cut from FY03 while the House cut 37%). In addition, both House and Senate require local districts to pick up the cost of transportation for non-public school children.
  • Funds MCAS remediation program at $45 million, a $5 million reduction from FY03. House provides only $10 million.
  • Reduces full day kindergarten program funding $3.5 million from the House, a 30% cut from FY03.
  • Eliminates early literacy program ($18 million in FY03). The House budget funds this program at $7.7 million, a 58% reduction from FY03.
  • Cuts METCO by 10% ($1.5 million), as in the House.
  • Deletes the $70 million endowment trust fund that currently funds the Master Teacher program and National Board certification fee reimbursements. However, the Senate proposes a $1 million line item to continue these programs (this amount would be a cut to the program).
  • Increases funding for special education by $44 million over FY03. House increases funding by $59 million.
  • Provides no funding for charter school reimbursements. The House budget includes $46 million. The Senate changes the charter tuition rate formula to exclude capital costs, thereby lowering the amount per student that a charter school could receive (and thus reducing the Chapter 70 cuts to school districts for charter school students)
  • Does not include House language allowing local school districts to grant diplomas to special needs students who have not passed MCAS.

Higher Education

  • Calls for tuition retention for all colleges and the University.
  • Cuts $122 million or 12.3% from the FY03 budget -- an increase of $45.4 million over the House version of the budget. Data includes the impact of tuition retention.

    University of Massachusetts
    Cut 13.4% ($60 million) from FY03 ($29.1 million higher than House budget)
    State Colleges
    Cut 13.8% ($28 million) from FY03 ($3 million higher than House budget)
    Community Colleges
    Cut 13.7% ($31 million) from FY03 ($3.4 million higher than House budget)

  • Like the House eliminates funding for library and reference materials.
  • Level funds scholarship money at FY'03 level. ($9 million over the House level).
  • Increases health insurance premiums and creates a tiered system.


Tier Salary Employee Contribution State Contribution
1 $0 - $49,999 15% 18%
2 $50K- $74,999 20% 80%
3 $75K- $99,999 25% 755
4 Over $100,000 30% 70%

State employees who retired prior to July 1, 1994, continue to pay 10%. State employees who retired between 7/1/94 and 6/30/03 would pay 15%. Those retiring after 7/1/03 would pay a premium amount based on the tiered system.

  • Changes composition of the Board of Higher Education (BHE). The BHE would have 2 non-voting members and 9 voting members. The 9 voting members would consist of the commissioner of education (ex-officio); 5 members appointed by the Governor one from organized labor, one from the business community, an undergraduate student enrolled in a public college and three members from each of the three higher education branches chosen by the college presidents.
  • BHE loses its power to close or consolidate colleges without the authorization of the legislature.
  • Calls for tuition retention for all the colleges and University of Massachusetts.
  • Includes an early retirement incentive proposal for state employees allowing up to 4 years of service or age (or a combination not to exceed 4 years) to be added to retirement calculation. Applications filed by Aug. 1, 2003. Retirement date would be Sept. 1, 2003. There is a backfill provision of 20% (of the compensation costs).

Retirees

  • Includes a three percent COLA on the first $12,000 of retirement income.
  • Health insurance premium shares for state employees retiring on or after July 1st, 2003, is dependent on the amount of one's retirement allowance and would mirror that of active state employees summarized above under "Higher Education."

Collective Bargaining

  • Includes no changes in the collective bargaining (Chapter 150E) or local group health insurance (Chapter 32B) statutes.

Board of Conciliation and Arbitration

  • Remains separate agency at agency requested budget.