In-depth look at the state budget headed to the governor's desk

The House and Senate passed the FY10 state budget and sent it to the governor on June 19. In order to close a $5 billion budget gap, the Legislature made major cuts in health care, education, human services, public employee benefits, public safety and almost every area of state government.

In addition to using funds from the federal stimulus package -- the American Recovery and Reinvestment Act -- the Legislature raised new revenues and took funds from the state's "rainy day" account in order to balance the budget. The budget includes a sales tax increase from 5 percent to 6.25 percent, along with other revenue increases, including some additional local revenue sources. For more information about the state budget and revenues, go to the Web site of the Massachusetts Budget and Policy Center,

The governor has 10 days either to sign or veto specific sections of the budget.


Chapter 70 Aid

Local education aid was cut by $79 million (2 percent), across the board. Each district was provided with ARRA State Fiscal Stabilization Funds (SFSF), where necessary, to reach its foundation budget spending level. The Legislature's budget appropriates $3.87 billion for FY10 for Chapter 70.

The budget adopts the Senate's inflation rate forecast, which is lower than the one proposed in House 1 and the House budget. This reduces the amount of SFSF funds that districts will receive in FY10 and could reduce Chapter 70 aid in the future.

Local Aid

The budget includes $936 million for unrestricted general government aid. This is a cut of $377 million (almost 29 percent) from FY09, which will mean that most municipalities will be cut by about 29 percent. Many cities and towns use up to 50 percent of general government aid for education.

Department of Elementary and Secondary Education -- Grant Programs

The DESE budget was cut by about $82 million (almost 2 percent). These cuts affected a number of important education grant programs, including:

  • Special education circuit breaker (about $89 million/almost 39 percent).
  • Regional school transportation (almost $21 million/about 34 percent).
  • MCAS remediation (about $4 million/almost 31 percent).
  • Kindergarten development grants ($7 million/almost 21 percent).
  • Targeted intervention for underperforming schools and districts (over $2 million/almost 25 percent).
  • Expanded learning time grants (almost $2 million/about 10 percent).
  • After-school programs (about $3.5 million/about 64 percent).

Charter Schools

A Senate-proposed working group to study charter school financing was not included in the final budget.


Using SFSF money, operational funding for each campus is restored to the FY09 appropriation.

For UMass, at least five programs that were funded in FY09 through separate line items are folded into the operations line item with earmarking language. Taking the earmarks into consideration, the UMass operations line item has been cut by at least $2.7 million from the FY09 level.

Non-campus "central accounts" have been cut by $17 million (14 percent). The largest cuts in these accounts are for scholarships ($9 million/over 9 percent) and Department of Higher Education operations (about $4.6 million/70 percent).

Health Insurance


The budget adopted the House's proposal on state employees' health insurance premiums, rejecting the Senate's more drastic increase. Those employees hired prior to 2003 who are currently at 85/15 will now pay 80/20; those employees hired after 2003 who are currently at 80/20, will now pay 75/25; all new employees will pay 75/25.

MTA and its higher education members worked hard to keep the health insurance increase at the House level, although we all recognize that even the House plan means a serious pay cut and will be difficult for many of our members and their families.


The Senate budget included a proposal on municipal health insurance that protected collective bargaining, while the House budget contained no provision dealing with municipal health insurance. The issue was left unresolved by the budget conference committee. MTA has learned that this issue is very likely to be taken up within the next few weeks in separate legislation. MTA will continue to work with legislators to protect the integrity of the public employee collective bargaining law.


A 3 percent cost-of-living increase was included in the budget on the first $12,000 of a retiree's pension.