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The Massachusetts Board of Elementary and Secondary Education

Governor's FY17 House 2 Budget Proposal

To:
Members of the Board of Elementary and Secondary Education
From:
Mitchell D. Chester, Ed.D., Commissioner
Date:
January 27, 2016

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Today Governor Baker filed House 2, containing the Administration's FY17 state spending recommendations for the upcoming fiscal year. The Governor recommends total state spending of $39.6 billion, representing a $1.5 billion (3.5%), increase over FY16 spending. The budget reflects the alignment of state spending with projected revenue growth. While FY17 revenue is expected to grow by almost $1 billion, fixed costs - including MassHealth and other health and human services programs, debt service, Group Insurance Commission, and pension obligations - are expected to increase by roughly $1.5 billion.

The Governor has prioritized spending increases for local aid, education, transportation, substance misuse, and the Department of Children and Families. The Department's recommended appropriations total $5.2 billion, which represents an increase of $85 million (1.7%), over FY16 spending. The Governor's request affirms a commitment to fund education aid for our districts, while focusing on core service delivery at ESE, and providing new opportunities for Career Technical Education and STEM programs as well as Early Literacy Initiatives. The proposal also addresses some of the priority investment areas identified by the Board last November.

The following summarizes the Governor's education recommendations by program area.

I. Education Local Aid & Reimbursements

Chapter 70 aid (7061-0008) is increased by $72.1M (1.6%) over FY15. Declining enrollment and low inflation result in little formula increase in foundation aid. The new growth is generated by the need to transition to new low income measure, continuation of equity reforms, and minimum per pupil aid. Transition to a new method of counting low income students - (required due to new federal school lunch policies) is being supported in this budget with a significant increase in foundation budgets to insulate many low income communities from negative impacts. Approximately $62 million is added to foundation budgets statewide, resulting in over $30 million in additional aid for districts with higher concentrations of low-income students. Minimum aid level of $20 dollars per pupil to insure increased aid for all districts - adds $12.8 million in aid statewide.

The House 2 budget gives District Reimbursements for Charter School Tuitions (7061-9010) a $20.5 million increase (25.4%). There is Outside Section language, (OS 42) that sets up a new structure for reimbursing communities for lost state aid due to charter school growth. The language sets up a structure (with accompanying funding in the line-item) that:

  • Continues to fully fund 100% reimbursement of $893 per student for capital facility component of charter tuitions paid by local communities.
  • Fully funds first-year, 100% reimbursement to districts for FY17 increases in their charter tuition payments. This will be first time in several years that first-year tuition increases will be fully reimbursed to local districts.
  • Provides funding for second-year reimbursements of 50% of increases experienced in FY16 for highly impacted communities with over 9% of their net school spending going to charter tuition payments, which currently account for over 53% of statewide charter enrollments.

The funding level for the Kindergarten Grant Program (7030-1002) remains the same as FY16 but the account is being renamed as Quality Kindergarten Grants and has a new distribution formula. Grant requirements will be jointly developed with the Department of Early Education and Care (EEC) and will now be distributed to all communities that have tuition-free, full-day kindergarten which will allow many communities formerly ineligible to apply for funding in FY17. Communities who apply will get a $350 per pupil for non-fee students, if their programs meet quality standards.

The Foundation Reserve account (7061-0011) is not funded in the House 2 budget for FY17, a reduction of $3.1 million.

All other district reimbursement accounts are level funded at FY16 spending levels, including Special Education Circuit Breaker (7061-0012), Regional School Transportation (7035-0006), Non-Resident Vocational Student Transportation (7035-0007), Homeless Transportation (7035-0008), and the METCO Program (7010-0012).

II. Expansion of Career Technical Education and STEM programs

The Governor is placing an increased focus on regional collaboration, alignment with local economic and workforce development needs, and employer partnerships to expand career technical education and STEM programs. As part of that initiative, the following 2 DESE accounts are receiving additional funding.

  • School to Career Connecting Activities (7027-0019) is getting a $2.4 million increase over FY16 which will be leveraged to provide more students access to employment opportunities, particularly in the STEM fields.
  • Advanced Placement Math and Science Program (7035-0035) is getting a $500,000 increase to allow for expansion of professional development for middle school teachers, as well as an continued focus on increasing the participation of underserved populations in STEM Advanced Placement courses.

III. Early Literacy Initiatives (7010-0031)

The House 2 budget consolidates the following four line-items from across the Secretariat into a new Early Literacy Initiatives account at DESE with funding level of $4.5 million. This new line item will be managed jointly by both DESE and EEC and will focus existing literacy funding on scalable programs that are proven to improve grade 3 and 4 English Language Arts proficiency, especially for high needs children and English Language Learners.

  • 3000-7070 (EEC) Reach Out and Read - $1,000,000
  • 7009-6400 (EOE) Gateway City English Language Learner - $1,200,000
  • 7010-0020 (ESE) Bay State Reading Institute - $400,000
  • 7010-0033 (ESE) Literacy Programs - $1,929,410

IV. Investment in Board Priority Areas

House 2 continues to support the Department's work in a number of priority areas.

Student Assessment (7061-9400)

The House 2 budget provides an additional $5.6 million of funding to implement a next generation assessment program. Part of that funding comes from the elimination of the MCAS Low-Scoring Support (7061-9404) account in FY17.

Targeted Assistance to Schools & Districts (7061-9408)

Although funding in FY17 is $16,956 less than the FY16 budget, the Governor's budget eliminates the earmarking found in the FY16 budget of $510,000, thus extending the amount of the targeted assistance line that can support Department activities.

Expanded Learning Time Grants (7061-9412)

The Governor has increased this account by $14,343 in FY17 and redirects the FY16 earmark of $50,000 in this line to FY17 ELT grants.

V. ESE Administrative Resources

Recognizing the difficult fiscal challenge the Commonwealth, ESE administrative accounts have received small reductions in the House 2 budget.

VI. Program Changes

House 2 eliminates spending for eight accounts previously funded in FY16.

7010-0050Education Evaluation Grant Program - $300,000 (FY16 budget can PAC into FY17)
7010-0060Mental Health and Substance Abuse Counselor Grant Program - $4.3 million (FY16 budget can PAC into FY18)
7061-0033Public School Military Mitigation - $1.3 million
7061-9011Innovation Schools - $296,898
7061-9406College and Career Readiness Program - $500,000
7061-9614Alternative Education - $250,000
7061-9804Mathematics Professional Development - $200,000
7061-9811Creative Challenge Index - $200,000

House 2 funding of $1.9 million for 7027-1004 will provide the funding necessary to train up to 4,500 educators in the final year of the RETELL initiative.

The Governor has increased the Special Education in Institutional Settings (7028-0031) by $49,486 to cover union raises and step increases for teachers.

House 2 reduces Adult Basic Education (7035-0002) by $385,413 but most of that decrease is the removal of FY16 earmark funding ($375,000).

House 2 eliminates FY16 earmark funding of $250,000 in the School Breakfast Program (7053-1925) and $310,000 in the After-School Grant Program (7061-9611).

School & District Accountability Reviews & Monitoring (7061-0029) is decreased by $87,502.

Regional Bonus Aid (7061-9810) is reduced by $165,800 to match the anticipated need in FY17.

Funding for our other accounts are level funded in the Governor's proposal.

The attached chart summarizes the Governor's FY17 budget recommendations in comparison to our current and prior year's appropriation history and identifies variances.

The Governor's House 2 budget recommendations begin the FY17 budget development process that will culminate in late June when the Legislature approves the FY17 budget and forwards it to the Governor for his final review and approval.

Please let me know if you have any questions or concerns. A discussion of the Governor's budget proposal will on the agenda at the February 23rd Board meeting.

Attachment

Download Excel Document
FY17 Governor's House 2 Budget


Last Updated: February 19, 2016
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