Date: Thu, 30 Jan 2003
From: "Arline Isaacson" AISAACSON@massteacher.org
Subject: Romney's Budget Cutting Package

Governor Romney announced today the list of 9C budget cuts he is making for the current fiscal year (FY'03). As previously stated in the press, his package contains a series of unilateral (9C) cuts as well as several budget cuts which require legislative action.

While the bulk of his cuts in this round were to local aid and human service accounts, he also cut higher ed line items and severely attacked important state employee accounts like health insurance.

Romney said his cuts were predicated on a revenue shortfall of approximately $488m for FY'03. If revenues from capital gains continue to fall this year, the revenue shortfall could reach as high as $650m. Were that to occur, Romney said he would deal with the remaining shortfall by tapping into the state's reserve accounts.

MTA is in the process of doing an in depth analysis of the Governor's bill. Following is a brief summary of the key cuts and proposed actions affecting higher ed and their colleges:

1) CAMPUS FUNDING (see attached spreadsheet)
Romney cut what he describes as "Administrative Expenses" for higher ed campuses by approximately $12.3m: UMass was cut $6.2m State Colleges were cut $2.8m Community Colleges were cut $3.2m

2) STATE EMPLOYEE HEALTH INSURANCE
Romney has included in his legislative package a request that the legislature change the statutes governing the GIC (Group Insurance Commission) to require all state employees to pay 25% of the costs of their health insurance. Currently, state employees pay 15%. This would be an enormous increase for state employees and cost them many hundreds of dollars (possibly as much as $1300 more each year, depending on which health insurance plan they use).

The House is scheduled to debate Romney's "Cut" bill on Monday or Tuesday of next week. MTA will meet tomorrow morning with the Public Employee Labor Coalition to discuss this round of cuts and in particular, the battle we face next week to keep the legislature from enacting many of Romney's suggestions (especially on health insurance). We will let you know about those developments as they unfold.

One thing is clear, we will need our higher ed members' active participation if we are to have any chance of thwarting these cuts and law changes. Most especially, we will need our members to contact their legislators urging them to:

1) Not increase health insurance costs for public employees. Legislators should be reminded that increases such as these are tantamount to a Selective TAX on State Employees.

2) To pass a revenue package as soon as possible to help stave off even more serious cuts in the FY'04 budget (expected to be debated in the next few months).