Higher Education Funding
Arline Isaacson, MTA

• While Gov. Romney announced to the press that he increased funding for higher education by more than $70 million in his FY05 budget, he in fact increased it by only $31 million. House 1 does not include two large items that belong in the FY04:


• The cost of the higher education contracts ($34 million).


• The $10 million that was added to the UMass line item in the supplemental budget.

Because these two items are not included in the calculations, the UMass budget appears $44 million lower in FY04 than it really was.

Campus Budgets
UMass receives a $35.4 million (or 9.1 percent) increase over FY04 when tuition retention is taken into account.
State colleges receive an increase of 7.9 percent, or $13.3 million.
Community colleges’ funding increases by 6.6 percent, or $12.8 million.
House 1 eliminates funding for the Community College Workforce Training Program.
There are again no funds for the library or reference materials appropriated.
The Health and Welfare line item that had been level-funded for many years is increased by $672,987.

(The attached spreadsheets give an overview of the campus budgets by segment.)

Adams Scholarships
The governor proposes to offer students four-year scholarships to public higher education institutions if those students have MCAS scores that rank in the top 25 percent. Students testing in the top 10 percent would also receive a waiver of $2,000 to offset the cost of their campus fees. Students receiving the tuition waiver must maintain a 3.0 grade point average. Students awarded the tuition plus waiver of fees must maintain a 3.3 grade point average and complete their studies in four years or less.

Employee Rights and Benefits

The Romney budget, with the exception of privacy matters, advances a number of recommendations that represent a retrenchment in the area of employee rights and benefits that affect both preK-12 and higher education employees. These include:

Collective Bargaining

Several budget sections eviscerate the public employee collective bargaining law affecting all public employees, including everyone in preK-12 and higher education.

The budget proposes to diminish significantly the number of public employees eligible for collective bargaining protections.

For example, the budget defines managerial employees so broadly that most members of MTA’s Association of Professional Administrators, who work at the state colleges, might be ineligible to join a collective bargaining unit. Also, given the broad-brush language used, classes of employees, such as department heads in schools and colleges, might be affected, including those who perform such duties on a part-time basis and those who participate in the workings of education policy committees.

Similar proposals were rejected by the Legislature last summer.

Civil Service

The Civil Service law was intended to protect public employment from political patronage by establishing a system of hiring, promotion and discharge based upon merit.

The budget “grandfathers” the Civil Service rights of existing Civil Service employees whose positions are removed from Civil Service coverage, except for former Civil Service employees who are covered by a collective bargaining agreement. The administration believes that collective bargaining and general employment law provide employees with sufficient protections against arbitrary dismissal. Removing positions from Civil Service protections without “grandfathering” is constitutionally questionable.

The budget cuts funding for the Civil Service Commission and gives the chairman, who has advocated the commission’s abolition, full executive and administrative powers.

Pensions

Although the governor proposes some changes in the pension system, our preliminary analysis indicates that his proposal keeps current benefits intact for most employees, who would continue to have their benefits calculated based on their highest three years’ salary. Our concern is that for some members, with certain career circumstances, the plan could lead to reduced benefits. This would occur because of a “cap” the governor proposes that is intended to address recently publicized instances in which certain individuals have received large salary increases just prior to retirement.

The effect of this proposal is that a public employee’s potential benefit would be calculated in two different ways. The employee would receive the lesser of the two benefits.

One calculation would be based on the highest three years’ salary. The second would be based on what a theoretical lifetime annuity would yield annually upon retirement. The annuity’s value would be calculated on what 15 percent of one’s annual salary for each year worked would yield when invested at 8¼ percent, compounded.

MTA opposes the proposed “reform” as written. Our major concern is the negative impact the cap could have on our members who receive substantive but well-deserved raises in their careers through negotiations, promotions or the awarding of advanced degrees. MTA will oppose any such limitations. In addition, the complex cap formula and the record-keeping required could prove to be an administrative nightmare with consequences that could prove to be detrimental.

MTA will have this proposal, and any other pension-revision recommendation, further analyzed by Legal Services and actuaries. MTA updates to our leaders and members will be timely and will contain recommendations for appropriate action. The House will not be debating this issue until April at the earliest, so there is ample time for analysis, the development of an action plan for members and lobbying members of the state Legislature.

Privacy

Provides that home phone numbers and addresses of public employees are not to be considered public records.

Retirement Benefits

The budget increases the cost of purchasing creditable service time toward retirement.

It repeals a provision permitting those who lose their jobs and have at least 20 years of service to retire as if they were 55 years of age.

It repeals veterans’ additional (up to $300) yearly retirement allowance.

Retiree COLA
The budget authorizes the granting of a COLA in FY05 for retired teachers and state employees of 3 percent on the first $12,000 of a person’s retirement allowance. Non-teacher local employees would need local approval to effectuate the COLA.

Retired Municipal Teachers’ Health Insurance
Retired municipal teachers from 75 school districts receive health insurance through the Commonwealth’s group health insurance plan. The premium share for the employer remains at 90 percent, and the employee pays 10 percent.

State Employees’ Health Insurance

This analysis replaces information released Friday, January 30, 2004. Section 149 amends section 8 of chapter 32A to make two significant changes in the current level of the commonwealth's contribution to the health insurance plans of active and retired state employees. First, it changes the present arrangement which requires the commonwealth to contribute certain percentage amounts to employees' insurance premiums on a plan by plan basis to an arrangement which fixes the commonwealth's share of premiums at an total aggregate amount on contributions owing on all insurances plans. Second, the proposal removes from the legislature the authority to contribute more than the current percentages paid to individual plans and invests that power in the Group Insurance Commission. The cap on the commonwealth's total obligation for health insurance premiums for all plans would be fixed as follows:

· For active employees, no less than 75%
· For employees who retired on or before July 1, 1994, 90%
· For employees who retired on or after July 1, 1994 but before July 1, 2004, 85%
· For all other retired employees, the percentage contribution shall be the one in effect on the date they retired for active employees.

The practical effect of this proposal would be to require the Group Insurance Commission to establish different percentage rates as it sees fit for each health insurance plan in order satisfy the cap. Consequently, under this proposal, the percentage contribution you currently pay toward your health plan could increase, decrease or stay the same. Currently, the commonwealth's contribution to each plan is uniform as follows: for active employees the commonwealth contributes 85%, 80% and 75% to health insurance plans depending upon income and for retired employees the commonwealth contributes 90% and 85% depending upon when the employee retired.

Outsourcing of State Employee Jobs

The budget proposes that the law prohibiting the outsourcing of state employee jobs to the private sector, commonly known as the Pacheco Law, be essentially repealed.

NOTE: Because of the vagueness of some budget proposals, and even silence in some instances, it may be some time before the full ramifications of proposed statutory changes are known.

PreK-12 Education Budget

Chapter 70 – State Aid to Local School Districts
The increase to Chapter 70 of $70 million is less than half of the $148 million cut from Chapter 70 in FY04. Total Chapter 70 appropriation is $3.18 billion for FY05.

Other Local Aid (Lottery and Additional Assistance)
Local aid is level-funded at the FY04 level. Most communities rely on these accounts, in addition to Chapter 70, to fund their schools. The failure to increase these accounts means that local spending on education will not be able to keep pace with inflation.

Education Grant and Reimbursement Programs
During the past three budgets, funding for educationally recognized programs, such as class size reduction, early childhood education and comprehensive health education, has been severely reduced or eliminated. The eliminated programs were not restored, and other programs were funded at the reduced FY04 level. Given increased needs and inflation, this means that most programs were actually cut:

Class Size Reduction for Low Income Districts – not funded in House 1.
Comprehensive Health Education Programs – not funded in House 1. Racial Imbalance Grants – not funded in House 1.
Full Day Kindergarten – funded at FY04 level ($23 million).
Early Literacy Programs – funded at FY04 level ($3.9 million and $1.9 million).
Transportation for pupils – not funded in House 1, except for regional school districts funded at FY04 level ($26.4 million).
School Breakfast Programs – funded at FY04 level ($2.3 million and $2 million for the universal eligibility program).
METCO – funded at FY04 level ($13.6 million).
Adult Basic Education – funded at FY04 level ($27.8 million).

Alternative Education Programs
The grant program for alternative education for disruptive students was restored. A small pilot program had been funded in previous years. House 1 proposes a larger program of $5 million.

Special Education
The “circuit-breaker” program was funded at FY04 level ($121.6 million). However, this amount falls far short of the amount needed to fully fund the program, as school districts have recently discovered.

Early Childhood Education
The funding for the Office of Early Education in the Department of Education, which currently funds the Community Partnership Program, is at the FY04 level ($74.6 million).

School Based Health Program
The School Based Health Program is eliminated. This $12.6 million program, administered by the Department of Health, provides funding for school nurses. Many children no longer will have access to needed nursing services.

MCAS
In FY03, the MCAS remediation program was funded at $50 million. Last year, it was cut by 80 percent. House 1 funds that program at $10 million and puts $20 million into a new program:

MCAS Low-Scoring Student Support – funded at FY04 level ($10 million).
MCAS Intensive Support for Low Scoring Districts – a targeted program for low-scoring districts ($20 million). Teachers hired in this program would not be covered by the local collective bargaining agreement.

Charter Schools
Proposes to lift current caps on charter school growth. Current law limits charters by number of schools, by percentage of public school students in the state and by percentage of local school budget going to charter tuition. House 1 lifts each of these caps.
Start-up grants for charter schools – funded at FY04 level.
Charter School Reimbursement – funded at FY04 level ($13 million), less than one third of what is needed under the law.

School Building Assistance
Calls for a new financing scheme that proposes to fund all projects on the current waiting list by FY09.

New Initiatives
Calling a series of proposals part of his “Legacy of Learning,” including the Alternative Education Grants (see above) and the MCAS Intensive Support for Low Scoring Districts (see above), the governor also proposes:

Full Day Kindergarten for Low Scoring Districts
In addition to the Kindergarten Expansion Grants (level-funded for FY05 at $23 million), House 1 proposes to fund full-day kindergarten ($9.9 million) in these seven public school districts: Brockton, Fitchburg, Haverhill, Lynn, Southbridge, Wareham and Winchendon (these are low- scoring on the MCAS and do not now have full-day kindergarten).

Math and Science Teacher Initiative
This is a $3 million program that funds existing programs and a new proposal. The programs are a math and science partnership program, funding for “online self-diagnostic tools for math skills to help teachers assess their professional development needs” (the so-called “math teacher test” currently allowed under DOE regulations), funding to administer a teacher signing bonus program (differential pay) to encourage “highly qualified candidates to teach mathematics or science in public schools in high-need districts” and funding to provide the third-year bonuses to teachers in the MINT program.

Parent Orientation and School Participation
Funding of $4 million for a program “to provide information and training for parents to assist them in nurturing their children’s development and education and to strengthen parents’ involvement in their children’s schooling.”