MTA analysis of governor’s 2021 budget

Governor Baker’s FY21 Budget

On January 22, Governor Charlie Baker filed his $44.6 billion FY21 budget, known as House 2. Baker’s proposal represents the first step in the development of a state budget for fiscal 2021, which begins July 1. The House and Senate will each recommend and adopt their own spending plans in the spring. The following are some key elements of the governor’s proposal.

PreK-12 Education
Baker’s budget seeks a $304 million increase in Chapter 70 aid as the first installment in the seven-year funding schedule called for by the Student Opportunity Act. This increase focuses heavily on Gateway Cities that serve predominantly low-income students. Other education funding increases include $18.2 million for charter school reimbursements, $15.3 million for the special education circuit breaker, and $10 million for the 21st Century Education Trust Fund.

Higher Education
House 2 proposes a 0.6 percent increase in public higher education funding for FY21 over FY20, which is less than the expected rate of inflation. This continues the Commonwealth’s decades-long trend of dramatically underfunding public higher education. The MTA continues to push for reinvestment in our public colleges and universities through the Cherish Act. With support from our Fund Our Future coalition partners, we are advocating that the House and Senate include in their FY21 budgets the first year of the Cherish Act’s five-year reinvestment plan for public higher education. The approximately $120 million in funding we are calling for would go toward enhancing the MassGrant Plus program, providing debt relief to public college and university graduates who go to work in our public schools, providing adjunct faculty members with health insurance and pay equity, relieving the burden of capital debt and reinvesting in student success, and increasing line-item funding for our public campuses.

GIC Premium Splits
The governor’s budget did not seek to change premium splits for active or retired state employees who receive health coverage through the state Group Insurance Commission, as he has tried unsuccessfully to do in past years.

Cost of Living Adjustment
The governor’s budget provides a 3 percent Cost of Living Adjustment (COLA) on the first $13,000 in pension benefits for retired members of the state and teachers’ retirement systems. Despite annual COLA increases, our retirees’ pensions do not keep pace with inflation or the rising costs of health care.

Proposal to Limit State Employee Sick Leave Accrual
Governor Baker once again has proposed limiting the accrual of unused sick time to 1,000 hours for executive branch and public higher education employees. This proposal would also freeze the accrual of sick time for any employee who has already accrued more than 1,000 hours. Similar language was presented as a potential ballot initiative last year, but supporters of the effort failed to collect the signatures necessary for it to advance. Governor Baker has repeatedly sought to implement this cap, but the proposal has yet to gain traction in the Legislature. The MTA will continue to oppose and closely monitor this proposal.

For additional details on House 2, check out the summary produced by the Massachusetts Budget and Policy Center.