The Massachusetts Board of Elementary and Secondary Education

Governor's FY20 House 1 Budget Proposal

Members of the Board of Elementary and Secondary Education
Jeffrey C. Riley, Commissioner
January 24, 2019

On January 23, Governor Baker filed House 1, containing the Administration's FY20 state spending recommendations for the upcoming fiscal year. The Governor recommends total state spending of $42.7 billion (excluding transfers to the Medical Assistance Trust Fund), representing a 1.5 percent increase over FY19 spending. The Governor has prioritized spending increases for key areas, including education, substance misuse services and treatment, housing, climate change adaptation and resiliency, transportation, economic development, and our local communities.

The Department of Elementary and Secondary Education's (Department) recommended appropriations total $5.79 billion, which represents an increase of $194.8 million (3.47%), over FY19 spending. The Governor's request proposes a major, multi-year school finance reform initiative, which includes an overhaul of the school funding formula and additional funding for schools, including a proposed new formula for reimbursing school districts for charter school tuition. The FY20 budget proposal also supports additional funding to increase opportunities in education and job training consistent with recommendations of the Administration's Black Advisory Commission and Latino Advisory Commission.

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

I. Education Local Aid & Reimbursements

Chapter 70 aid (7061-0008), is increased by $200.3M (4%) over FY19 to $5.1B. The House 1 budget proposal is based on An Act to Promote Equity and Excellence in Education, a comprehensive school finance bill that has been filed by the Baker-Polito Administration. A more detailed discussion on the legislation has been posted on the Department's Chapter 70 website, and will be presented at our February 12 Board meeting. The bill implements the major recommendations of the Foundation Budget Review Commission, incorporates other enhancements to the Commonwealth's school funding framework, and codifies the formula changes that have previously been implemented through annual provisions in the state budget.

The major components of this school finance reform initiative with an impact on the FY20 budget include:

The Act to Promote Equity and Excellence in Education also provides the Commissioner the authority to address instances in which a school district takes insufficient steps to implement changes to the turnaround plan of an underperforming school as directed by the Commissioner. In such a situation, the Commissioner is empowered, effective at the beginning of the following school year, to place a share of the district's Chapter 70 school aid allocation in the public school turnaround fund, established in section 1 of the Act, until Commissioner determines the district has implemented the required changes. The maximum share that may be placed in the public school turnaround fund is determined by multiplying the district's per pupil Chapter 70 school aid by the number of students enrolled in the underperforming school. In accounting for the withholding of these funds, a school district is barred from deducting funding from school-based budgets or from direct services to students.

Special Education Circuit Breaker reimbursement (7061-0012) is increased by $4.5M over FY19 level to $323.9M, of which $4M is to increase the Department of Developmental Services earmark from $6.5 to $10.5M.

The Governor has also proposed an increase of $16M for Charter School Tuition Reimbursements (7061-9010) to $106M total. This increase is based on a proposal to introduce a new three-year formula for reimbursing school districts for charter school tuition increases, putting the program on schedule for full funding within a three-year time frame. Once fully phased in, districts will be reimbursed 100 percent in year one, 60 percent in year two and 40 percent in year three. Districts that allocate more than 9 percent of their budgets in support of students attending charter schools will benefit from a new minimum tuition reimbursement amount.

The House 1 budget has level funded all other district reimbursement accounts at FY19 spending levels including Regional School Transportation (7035-0006), Non-Resident Vocational Student Transportation (7035-0007), and Homeless Transportation (7035-0008). The METCO Program (7010-0012) is also level funded at $22.1M. Foundation Reserve (7061-0011) is not funded in FY20 since students who came here due to Hurricanes Maria and Irma are now included as part of the Chapter 70 formula.

II. New Education Investment Trust Funding

House 1 budget includes a sales tax modernization proposal that will generate significant one-time revenues. This money will be used to seed education investments, including $50 million for a new trust fund to help drive quality improvements in low-performing schools (7010-5010 Public School Improvement Trust Fund) and $30 million to help local school districts address their school safety needs (7010-5020 School Safety Trust Fund).

III. Consolidation of Targeted Assistance and Expanded Learning Time Grants

FY20 House 1 proposes to consolidate 7061-9412 Expanded Learning Time Grants with the Targeted Assistance account (7061-9408) at $26.5 million, same as the FY19 budget.

IV. Consolidation of Literacy Account and English Language Acquisition

The Governor's House 1 budget consolidates the following two line items into the newly renamed English Acquisition and Literacy Programs (7010-0033) account with a combined funding level of $4.3 million, same as the FY19 budget less the Gateway Cities earmark.

V. Program Changes

The Governor has not proposed FY20 funding for these two new initiatives: 7061-0010 Mental Health and Substance Abuse Grants and 7061-9814 Summer Learning Grants. However, it is likely that some of the FY19 funding will continue into FY20 once a PAC (prior appropriation continued) provision is approved through a supplemental budget.

House 1 eliminates spending for four accounts previously funded in FY19: 7010-1192 Educational Improvement Project Grants, 7061-9011 Innovation Schools, 7061-9401 Assessment Consortium and 7061-9406 College and Career Readiness accounts.

The Governor's House 1 budget increases Adult Basic Education (7035-0002) by $4.27 million (less earmarks) which includes $4 million to implement the Latino Advisory Commission recommendations to improve and expand English for Speakers of Other Languages (ESOL) programs and $400,000 to expand targeted workforce development programs to Black youth and young adults per the Black Advisory Commission recommendations.

The Governor has increased FY20 funding in the Teacher Certification Retained Revenue (7061-9601) account to $2.3 million to fund staff in the Office of Professional Practice Investigations to reduce the current backlog of cases.

In the FY20 House 1 proposal, the Recovery High School Program (7061-9607) is funded at $2.5 million, $600,000 less than FY19.

FY20 House 1 has also consolidated Regional Bonus Aid (7061-9810) and Rural School Aid (7061-9813) into a new Public School Regionalization Trust fund (1595-0065) for $1.5 million.

Funding for DESE's other accounts are level funded in the Governor's House 1 proposal with either the removal of legislative earmarks and/or changes in FY20 payroll costs.

The attached chart summarizes the Governor's FY20 budget recommendations in comparison to our current and prior year's appropriation history and identifies variances.

The Governor's House 1 budget recommendations begin the FY20 budget development process that will culminate in late June when the Legislature approves the FY20 budget and forwards it to the Governor for his final review and approval.

Please let us know if you have any questions or concerns. A discussion of the Governor's budget proposal and school finance bill will be on the agenda at the Board meeting on February 12.



Download PowerPoint File
FY20 Governor's House 1 Budget Overview