MTA analysis of the Senate Ways & Means FY2019 budget

The Senate Ways and Means Committee released its version of the FY19 (FY19) annual state budget on Thursday, May 10. The proposal, known as Senate Bill 4, allocates $41.42 billion in spending, an increase of 3.0 percent over the current fiscal year and roughly $83 million more than Governor Charlie Baker proposed in his FY19 budget, House Bill 2. The budget passed by the House last month, H. 4401, allocates $97 million more in spending than S.4, but that gap is likely to diminish as appropriations are added through amendments.

The appropriations bill serves as the benchmark in terms of policy and funding levels for the Senate’s budget debate, which takes place the week of May 21. Senators may file amendments to the budget, which will then be subject to debate and review. The deadline for filing of amendments was noon on Monday, May 14.

K-12 Education

Chapter 70 Funding

S.4 proposes increasing Chapter 70 aid by $85 million over FY18, adjusted for inflation and enrollment changes. This amount also represents a $23 million increase over H.4401 and a $56 million increase over H.2.

Circuit Breaker

Funding for the Special Education Circuit Breaker was increased by $37.6 million over FY18, $18.6 million more than was allocated in H.4401 and $27 million more than was included in H.2. The circuit breaker program reimburses districts for high-cost special education students. “High-cost” is defined as four times the state average per pupil (based on state funding formulas). The state is supposed to reimburse districts for 75 percent of costs above this threshold for prior-year costs.

Charter School Reimbursement

State funding for charter school reimbursements was increased by $19.5 million over FY18 and H.2 funding levels and is $10 million more than what was included in H.4401. In FY18, this amount was less than half what was needed to fully fund this program. Under current statute, communities receive tuition reimbursement for any increase in tuition paid to charter schools over the previous year. That reimbursement is 100 percent of the increase in the first year and then 25 percent of the increase for the next five years. It is important to note that these reimbursements are subject to appropriation, and in the past, communities have not received the full amount owed to them because of insufficient state funding.

Early College

A number of months ago, the state Secretary of Education announced the launch of a new early college initiative. While the governor funded this new program at $3 million in his budget, S.4 and H.4401 do not provide funding.

MCAS Funding

Funding for MCAS administration is increased by $100,000, which is substantially less than the $5 million increase included in H.2 and H.4401.

Chapter 70 Local Contribution Commission

S.4 also calls for the creation of a commission to study the adequacy of the local contribution component of the Chapter 70 formula. The commission would be required to hold at least four public hearings prior to releasing its findings and recommendations, which would be due no later than Oct. 1, 2019. The MTA would have one representative on the commission, which would consist of 21 members.

Non-Chapter 70 Education Programs

S.4 makes a number of changes to non-Chapter 70 education programs.

Programs receiving funding increases in S.4:

• Teacher Certification Retained Revenue — $121,104
• School-to-Work Connecting Activities — $446,000
• Regional School Transportation — $1,000,000
• Charter School Reimbursements — $19,500,000
• METCO — $500,000
• English Language Acquisition — $694,508
• Adult Basic Education —$1,367,622
• Youthbuild Programs — $650,000
• Literacy Programs — $329,319
•  Non-resident Transportation to Voc-Tech Programs — $7,500

Programs level-funded in S.4:

• Expanded Learning Time Grants — $13,975,592
• Transportation of Homeless – $8,099,500
• Advanced Placement Math and Science Programs — $2,592,809
• Mentoring Matching Grants — $475,000
• School Breakfast Program — $4,666,445
• School Lunch Public — $5,314,176
• Regionalization Bonus — $56,920
• Center for Collaborative Education — $200,000
• English Language Learners in Gateway Cities — $250,000

Programs receiving funding cuts in S.4:

• Targeted Intervention (Partnership Network) — $446,226
• Institutional Schools — $37,342
• After-School Programs —$666,991
• Department Operating Budget —$2,005,022
• Impact Aid Shortfall Mitigation – $100,000
• Innovation Schools — $65,000

Programs eliminated in S.4

• Safe and Supportive School Grants — $500,000
• Intensive Support for Low-Scoring Districts — $700,000
• Bay State Reading Institute — $339,500

Higher Education

Taking into account tuition remission to the state, S.4 includes a 2.2 percent average increase for higher education operating budgets over FY18, including a 1 percent increase to UMass, 3.8 percent increase to state universities, and a 3.1 percent increase to community colleges. State university and community college appropriations are higher than funding included in H.4401 and H.2, while UMass funding is the same as H.2 and slightly less than in H.4401.

Employee Benefits

Group Insurance Commission Funding

Funding for GIC operations and premium plan and costs account are essentially the same in S.4, H.4401 and the governor’s budget.

Premium Contribution Split

Funding for GIC operations and premium plan and costs account are essentially the same in S.4, H.4401 and the governor’s budget.

Sick Leave Accrual

S.4 does not include language that would cap the accrual of sick leave for state employees.

Retiree Benefits

State Pension Fund Contributions

S.4 appropriates $2.608 billion to cover the state’s pension liabilities, as required by law.

Cost of Living Adjustment (COLA)

S.4 provides a 3 percent COLA on the first $13,000 in pension benefits for retired members of the state and teachers’ retirement systems.

Despite these increases, retiree pensions do not keep pace with inflation or the rising costs of health care.

Revenue

S.4 anticipates $41.724.4 billion in revenue, which represents a 3.5 percent increase over projected FY18 revenue.