House Ways and Means Committee Releases Budget for Fiscal 2013

On April 11, the House Ways and Means Committee released its $32.3 billion proposed budget for fiscal year 2013, which begins on July 1. The budget gap between maintaining current services and expected revenues is approximately $1.3 billion. In order to present a balanced budget as required by law, the proposal relies on spending cuts, savings and use of the “rainy day” fund.

None of the governor’s proposed tax increases, which total about $265 million, or other revenue increases were included in the HWM proposal.Budget Spreadsheets

The HWM proposal increases Chapter 70 funds to school districts by $164 million. This is an increase of about 4 percent over FY12. Unlike the governor’s proposal, this version guarantees each school district a minimum increase over the current year of $40 per student. While this guarantee increases school aid across the board, it fails to take into consideration the varying needs of different student populations and the varying abilities of communities to raise tax revenues to help fund schools. A number of programs, including regional school transportation and the Special Education Circuit Breaker, received increases. Funding was also included to transport homeless students and to create a financial literacy program.

Public higher education is funded at $1 billion, an increase of 5.7 percent over last year over the original FY12 budget. Most of the increase is from setting aside $49 million in contract funding reserves, as the governor had done in House 2. Financial aid was decreased by about $1 million from FY12. The House proposal does not include the governor’s reorganization language or his funding increase for community colleges. However, the proposal does call for the commissioner of higher education to develop an updated funding formula for each college and sets up a committee to study better ways to coordinate workforce training needs. The MTA is concerned that there is not adequate involvement from community college faculty and staff in developing the recommendations.

Local aid to communities has seen drastic cuts during the recession. The HWM proposal increases local aid by $65 million over the governor’s budget and funds local aid at the FY12 level. (The governor’s proposal includes the $65 million increase, contingent on revenues.) In some communities, up to 40 percent of local aid goes into the public schools.

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Budget Spreadsheets

MTA President Paul Toner's statement

First Look: Massachusetts Budget and Policy Center Report


K-12 Education (increase of over 4.1 percent over FY12)

Chapter 70 – State Aid to Local School Districts

  • Chapter 70 is increased from current (FY12) funding levels by $164 million to $4.154 billion, an increase of about $18 million over the House 2 Chapter 70 aid proposal. Each district receives an increase over FY12 of at least $40 per student.
  • For some districts, available funds will be supplemented with unexpended federal Education Jobs money, which can be used through the first quarter of FY13.

 K-12 Education Grant Programs

  • Special Education Circuit Breaker – House Ways and Means funds the Special Education Circuit Breaker program at $222 million, an $8 million increase from the current FY12 appropriation. This is also about $8 million more than the governor’s proposal.
  • Regional School Transportation – This area is increased by $2 million over both FY12 and House 2.
  • Transportation of Homeless Students – This is a new program funded at $11.3 million, which was not part of the governor’s proposal.
  • Targeted Intervention for Underperforming Schools and Districts – This area is increased by $910,000 from FY12 ($1.7 million less than the House 2 proposal).
  • Expanded Learning Time Grants – The grants are funded at the FY12 level ($1 million less than in House 2).
  • Gateways Cities programs – House 2 created five new programs aimed at narrowing the achievement gap, funded at roughly $10 million. The House Ways and Means proposal cuts over $7 million from these programs.
  • Full Day Kindergarten – This area is increased by $2 million over FY12 ($1 million less than the governor’s proposal).
  • METCO – The program is cut by $1 million from both FY12 and the governor’s proposal.
    Early Education and Care (decrease of 1.6 percent from FY12)
  • House Ways and Means cuts the EEC budget by $8 million from FY12 and close to $670,000 from the House 2 proposal.
    Higher Education (increase of 5.7 percent over FY12)
  • Campus line items – Beginning in FY12, all campuses were allowed to retain tuition from out-of-state students. House Ways and Means proposes to fund each campus at a level that, with assumed tuition retention, holds each campus at its FY12 state appropriation plus assumed tuition retention. This proposed funding level is the same as the governor’s proposal, except that the governor adds an additional $10 million to community colleges as part of his proposal to reorganize this segment.
  • Scholarship Reserve – The reserve is funded at $87.6 million. In addition, $1 million is to be transferred to this line item from the Massachusetts Education Finance Agency, similar to what was done in FY12. The governor’s proposal does not include the MEFA transfer. Taking the transfer into consideration, the Scholarship Reserve is funded at $1.1 million less than the FY12 amount (about the same level as under House 2).
  • Collective bargaining reserves – As was the case with House 2, the proposal sets aside about $49 million to fund actual or anticipated collective bargaining agreements with the University of Massachusetts and the Board of Higher Education.

Employee Benefits

Cost of Living Adjustment (COLA) – The House Ways and Means proposal provides for a 3 percent increase on the first $13,000 in pension benefits for retired state employees.