Public education suffers setbacks in House-passed budget

After almost two weeks of debate, the House on May 8 passed a budget that is bad for the Commonwealth's students and educators.  The  $22.5 billion House budget makes steep cuts in funding for public education pre-kindergarten through graduate school.

By wide margins, the House voted down a number of proposed tax increases that would have increased state revenues and avoided many of the cuts.  The projected budget deficit for the next fiscal year is $3 billion.  Since the state is required by its Constitution to pass a balanced budget, that $3 billion deficit had to be closed by either cuts or increases in revenues.  The House used a variety of strategies -- federal funds, use of state trust funds, closing some corporate tax loopholes and new fees -- to raise about $700 million, but the bulk of the deficit was made up by about $2.2 billion in cuts to programs.

As a result of the House's rejection of increased taxes, and because of the way the House debate was structured, it was impossible to make major changes to the original House Ways and Means budget.

Despite intense lobbying by MTA and other public employee unions, the House voted to increase the premium share for health insurance for state employees from 15 to 20 percent and for new employees to 25 percent.  This will affect MTA's higher education members.  In another setback for all new public employees, the House also voted to increase an employee's contribution to the pension plan from 11 to 12 percent.  This will affect all K-graduate school employees hired after January 1, 2004.

However, the House budget did include a retirement incentive for state employees.

Below is a summary of the House-passed budget.  .

What's Next

The FY04 budget process now moves to the Senate.  The Senate budget is expected to be released on May 21.  Debate will start the following week.  On May 8, Senate President Robert Travaglini announced that, like the House budget, the Senate budget would contain no new revenues. He warned people to expect deep cuts in services.

After the Senate passes its budget, the House and Senate will iron out differences in a conference committee.  Both House and Senate leaders have pledged to get the budget to the governor in time for it to be enacted by July 1, the beginning of the new fiscal year.

It is crucial that supporters of public education continue to pressure the Legislature to do the right thing. This summer a responsible plan that includes new tax revenues needed to prevent further erosion of public education must be passed to avoid the devastating cuts.

FY04 House-Passed Budget

K-12 Education and Local Aid
  • Chapter 70 -- education aid to cities, towns -- cut by $150.8 million (4.6 percent cut over FY03).  Almost one-half of the districts are cut by 20 percent.  This is the first time in a decade that Chapter 70 has not been increased.  When the estimated $75 million cost of maintaining current services is taken into account, the effective cut is almost $226 million.
  • Additional cuts in education programs: class size reduction ($18 million, or 100 percent); early childhood education ($20 million, or 21 percent); MCAS remediation ($40 million, or 80 percent); full-day kindergarten ($5 million, or 18 percent); school transportation ($52 million, or 100 percent); and regional transportation ($5.5 million or 37 percent).
  • Increased funding for additional school building projects that the House Ways and Means proposal had not funded.
  • Increased funding for special education by $59 million (from $70 million to $129 million).
  • Defeated an attempt to impose a charter school moratorium by a vote of 93 – 60.
  • Passed an amendment that allows local school districts to grant diplomas to special needs students who have not passed the MCAS but have met district requirements.
  • Adopted language that permits two-way bilingual programs.
  • Non-Chapter 70 local aid cut by $187 million.  It is estimated that 50 percent of this aid, on average, goes to public schools.
  • Directed DOE to replace the current prospective teacher test with a test developed by Educational Testing Service.
  • Requires school districts that provide bus transportation to students grade 7-12 to also pay for private school students despite the elimination of state reimbursements for school transportation.
Public Higher Education
  • Campus budgets overall decreased by 17.6 percent ($154 million).  MTA had supported an amendment to distribute the $30 million from the newly created Higher Education Efficiency Incentive program to the University of Massachusetts, the state and community colleges.  However, the amendment that was passed distributed $19.5 million to state and community colleges and none to the University of Massachusetts.  $5 million is left in the Higher Education Incentive program and all campuses can apply for it.  In a move that MTA opposed, the remaining money was moved to the school building assistance account. 
  • Increased current state employees' health insurance premium share from 15 to 20 percent and decreased the employer's share from 85 to 80 percent. New employees will be required to pay 25 percent of their health insurance premium. (The originally proposed tiered approach was not adopted.)
  • Included in the budget a 5 or 5 early retirement incentive for state employees with a "backfill" of 20%.
  • Defeated Governor Romney's proposal for restructuring higher education.
  • Removed the House Ways and Means recommendation to exempt the University of Massachusetts from the Pacheco anti-privatization law requiring cost accounting before publicly provided services can be privatized.
Employee Rights and Benefits
  • Will require all new public employees to contribute 12 percent to their pension plan (up from the current 11 percent for new K-12 teachers and 9-11 percent for all other public employees).
  • Defeated two amendments, part of the governor's attack on collective bargaining, that would have restricted who was eligible for bargaining protection and as well as what the scope of bargaining would include.
  • Does not increase retirees' health insurance premiums -- unlike current employees who will see substantial increases.