Friday, April 27, 2018

Senate passes supplemental budget

While it is FY19 budget season, it also is FY18 supplemental budget season, when the Legislature passes a bit more money for specific programs for the current year as it becomes clear such funds are available.
A few weeks back, the House passed a supplemental budget that included $12.5M for circuit breaker funds.  Circuit breaker is an acknowledgement by the state that out-of-district special education tuition can be quite expensive; much like an actual circuit breaker flips if the circuit is overloaded, circuit breaker funding kicks in if tuition for an out-of-district special education tuition is too much. If you scroll down here, there's a good explanation from Deputy Commissioner Jeff Wulfson on how that works ('though it is from 2008, so ignore the dollar amounts). If a student's tuition is more than four times the average foundation budget per student in the state (and yes, that number pops up...basically nowhere else?), the state is committed by MGL Ch. 71B, Sec. 5A to paying 75% of that overage.
This year, tuition costs rose but the line for the circuit breaker in last year's budget hadn't. Both House and Senate have heard a lot about this from districts--in a small district, a single student can break your budget!--and so have responded.
Yesterday, the Senate passed the same $12.5M the House passed; that number thus should go to the Governor (and they have more than enough votes to override a veto, if that became necessary).

The Senate also included $4M for charter school reimbursement on an amendment proposed by Senator Chang-Diaz. That was not in the House budget, and so goes to conference committee.

I do also want to note that the Senate, whose budget comes out next month, had an extensive conversation around financial commitments to school districts, around promising something like circuit breaker, or charter reimbursement, or regional transportation, and not delivering it. It's clear that the message there is being heard (at least in the Senate) loud and clear.

A word about timing: while for teachers and students, it's a time of year that ossalates between "we'll never get there" and "nearly done," in the financial world, there's no question: this school year is nearly done. Plenty of districts cut off departmental and other spending May 1 to ensure that spending will all be through by the fiscal year's end on June 30. General funds allocated to the schools that haven't been spent by June 30 are returned to the town or city in a municipal district, where it will become part of free cash; in a regional district, some of that can go into an excess and deficiency account (and thus be held over), but even that has limits. There are exceptions, and circuit breaker is one; it can be held over to following year (and lots of districts use one year to pay the next year's tuition). In general, though, the later in the year "new" money comes into the district, the less useful it is to the district (it isn't as though anyone is hiring a new teacher in May) and the greater the likilihood that it ends up in city coffers, anyway.
This isn't to discount the importance of what the Senate did yesterday. It is to say that what they do next month is more important.

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