The midyear budget cuts are bad, but the news on FY25 is worse

 Well, there's a happy headline, huh?

It was the mid fiscal year 2024 budget cuts that got the headlines earlier this week, as Governor Healey, using authority granted her under MGL Ch. 29, sec. 9C (thus "9C cuts") cut $375 million from the current state budget. While those cuts must come from the executive branch, and so couldn't hit local aid including chapter 70 aid, grant programs in education did get cut, including extended learning time, dual enrollment, school-to-career connecting activities, student wellness school support, and advanced placement math and science programs. Additionally, the allocations for both the 21st century education trust fund and the STEM Pipeline were cut. The Governor's office framed these cuts as either bringing the accounts either to what is projected to be needed or to that already awarded.

The Governor's office also rolled back the projected bottom line of this year by a billion dollars.

What you may have missed in that news what the consensus revenue figure for FY25 that was released at the same time. That figure is what the executive and legislative branches (both House and Senate) have agreed will be the bottom line for the coming fiscal year budget.

For FY25, that is $40.202 billion. That's $208 million LESS than was passed last year for the fiscal year we're in now. It will be more than what this year's budget is projected to be now that they've rolled back the bottom line, but it's crucial to understand: it will be LESS than what we used for this year during budget deliberations.

They've also agreed on $1.3 billion in surtax revenue; that's the Fair Share money. This year, it was $1 billion dollars, so this is $300 million more. As the Senate then released on Thursday that they're looking to put $170 million into community college, that's more than half spent. 

Buckle up. This isn't going to be a good budget year. 

Two quick notes on Massachusetts school funding

First, both from this piece quoting Senate President Spilka and elsewhere, it seems as though we're going to get through FY20 unscathed in terms of local aid and Chapter 70. That would mean that there seems to be a general sense we can get through to the end of June without what are known as 9C cuts, at least to those accounts.
Not so much for FY21, which begins in July, however.

On the CARES Act, the state's application for K-12 funding was approved Monday; district applications should be available by the end of the week or early next week. The rough calculation on this is expect 80% of whatever the FY20 allocation for your district for Title I in FY20 (Worcester folks, that's 80% of $11.7M=$9.36M). These funds can be used for about anything you'd be able to spend money on under a Title program, and they can be used through September 2022.

There are two HOWEVERs on this, though:

• Title I is expected to be down statewide, both because federal aid mostly isn't going up and because our statewide census for Title I is down (and I don't entirely understand that part myself, so I have asked about it). How much is going to depend on your district, but if the overall state number is down, that's...a problem. (Worcester, the local estimate is down 10%. You will note that the CARES funding is less than that.)
• PLUS, it has been observed that under ARRA (remember that federal aid in the Obama administration during the economic downturn?), the Legislature backfilled Chapter 70 aid with the federal aid. In other words, your Chapter 70 aid got cut, and they filled the cut with the federal aid. We do not yet know if this is what will happen, but it is a thing that has happened before.

In other words: CARES Act is NOT "go have some fun" money.

Top posts of 2016

This was a fairly crazy year in blogging for me:I changed positions, we had a ballot question to fight, the state budget had a sudden dive from conference committee, Diane Ravitch linked to my posts twice, and Worcester got a new superintendent. I don't tend to pay a lot of attention to my analytics, as I have some fairly discrete groups of readers (not everyone follows Worcester schools, but those who do don't necessarily follow state budget news, and not everyone reads state board posts), so the numbers go up and down a lot based on content, but a check-in here is interesting, in what overall gets read.

As per always, the top hit, far and away, is the front page. There are plenty of you to pop through regularly just to see what's here. Thanks to you! You're the reason I feel I need to keep making sure new things come up here.

Specific posts, in order, are:

1. "Here Come the 9C cuts" from December 6. Halfway through the fiscal year, Governor Baker took $98 million out of the FY17 budget, and did so in a way that recreated his vetos, rather than reevaluated budgetary lines. 
2. "The Senate Passed Amendment 196" from May 27. Amendment 196 to the Senate budget barred the use of student performance data in teacher evaluation. This has now led to this being before the Board of Education, so, while the Senate amendment didn't make it out of conference committee, it may happen, anyway.
3. "Foundation what?" from February 29. A foundation budget explainer, motivated in part by my MASC work, which I probably should have done a long time ago. This one may need its own page.
4. "Interview for Special Education Director: Ronald Sinico" from October 28, 2012. Huh??  This is a great example of my not paying attention to analytics: last October, Mr. Sinico (now retired) ran for town supervisor in North Greenbush, NY; he lost the election, but in August, he raised questions about the property tax bill of the man who won. If you google Mr. Sinico's name, one of the first things that comes up...is my notes from this interview. Clicking through is not entirely surprising; what surprises me is that most of them appear (by time spent) to have actually read it!
5. "RISE and Shine!" from March 31. This took apart what actually was in the Senate's RISE Act.
6. "The Debate of the RISE Act in the Senate" from April 7. A long day on a decent bill that deserved much more consideration than it got.
7. "Here's the Answer of What's in the Question" from September 21. A response to those who throughout the Question 2 campaign kept saying it would only hit nine districts and etc, which totally wasn't true.
8. "Voting for Savage Inequalities" from October 7. A response to the suburban guilt arguments on Question 2.
9. "No, This Isn't What One Would Expect for Worcester Finalists" from March 7. Responding directly to the many who asked for some perspective on the Worcester superintendent finalists. 
10. And, bringing us full circle, "Governor Baker's FY17 Budget" from January 28. I'll do FY18 in a few weeks.

With much discussion of the foundation budget for this coming year--heck, it even made the State House News Service's list of things to watch for this session!--plus another budget from the Governor, who is less than popular with many in the Legislature now, the state moving ahead with an ESSA submission, and who knows what coming on the federal level, there'll be no lack of things to blog about! 

Happy 2017! Thanks for reading! 

Friday news dump: the 9Cs come in at 4:57 pm

...I kid you not...

I've run through the 9C cuts from Governor Baker over on Twitter under #bakerbudgetcuts (edit: just check the year of the tweets; I used the same hashtag last year). There are four notes on education:

• The $300,000 in the budget for studying how best to meet our needs for preK has been entirely zeroed out. Again. So much for preschool and early ed expansion; we're not even figuring out how to do it.
• There is a $75,000 cut in DESE's line item, with no details. That could be an internal, Malden, cut; it also could be cutting something under DESE's discretion. I'm assuming Malden, but I've asked, and I'll update once I hear for sure.
• Adult basic education has been cut $500,000 (from a $31M line).
• The innovation grants have been cut $440,000 from 736,898; given that we're halfway through the year, that may be zeroed out. If last year is any measure, however, they'll probably tell us that these grants have not yet been awarded.

There's plenty more, but not in education.

UPDATE: this just in from DESE:

@TracyNovick FBRC staffing, but alt source found to cover cost. No reduction in service. @MissDebGee @wire2wre @JonathanCohn @marcela_elisa

— Massachusetts K-12 (@MASchoolsK12) January 9, 2016

I imagine that would be consultant David Bunker, who was brought in over September to finish the report.

They're coming

State House News got Governor Baker on 9C's yesterday:

“I think it’s likely we’ll do some 9Cs as part of this process,” Baker said on Monday. “We’re doing everything we can to make sure we don’t hit services people depend on and we’re certainly not going to…we’re going to stay away from cities and towns.”

Well, Governor, a cut to education hits cities and towns.

Most read in 2015

Unless I suddenly start getting a lot of traffic on a blog post I wasn't I expecting, I don't pay a lot of attention to my analytics, but here's my once-a-year look at what was most read.

As usual, the top hit is just the front page, meaning that there are a lot of you who just come by to see what's new. That's increasingly unusual these days; most blog traffic is driven by links. I appreciate--and will try to stay attentive to--the faith that I have something new and worth reading up!

1. The single post with the most hits (not surprising, given last year's weather) was this post on how snow days and the Worcester Public Schools calendar works. That was an evolving post, as I fielded questions about how the calendar works and how WPS was going to deal with the days off. With luck, we won't need that information so urgently this year!
2. Governor Baker's FY16 budget proposal and its impact on urban districts had the second highest number of hits this year. YES, YOU SHOULD BOOKMARK THIS ONE FOR THIS YEAR!
3. This one seems to be caught in a bigger search: "special education" brings you the interviews for a new special education director back in 2012. 
4. Given that the national Massachusetts education story was on testing, it makes sense that the liveblog of the Board of Ed's deliberation on that decision would make this list.
5. For a bit the only place with any public information on this was here: the proposal to make Chandler Magnet's field a parking lot for Worcester State. 
6. My notes from the March 5 update on North High at Worcester School Committee saw a lot of traffic.
7. I posted my testimony before the Board of Ed on MCAS or PARCC. 
8. Governor Baker appointed two new members to the Board of Ed in September, and Google is our friend on these.
9. Baker's inaugural a year ago had some language on education, but not much for the education of most kids. 
10. ...which was borne out a month later by his choices in midyear budget cuts. 

It's always interesting to me to see the mix of Worcester and state on these. As I said earlier, my blogging on Worcester will continue, but will be more focused on the superintendent search and the budget; the state blogging will continue...and more to come on that. 

9C cuts...

You may have missed it in your holiday planning, but, bad news:

Despite growing revenues, Gov. Charlie Baker is still considering mid-year budget cuts.

...and I've heard from multiple places that it's pretty serious consideration.
As a reminder, 9Cs can only be made by the Governor in Executive office spending:

The Governor can only use 9C powers to cut funding in parts of the government that are under his control—in other words, his 9C authority extends only to the executive branch agencies. The Governor cannot use 9C authority to cut local aid, the courts, the Legislature, or other constitutional offices. The Governor can file legislation recommending cuts to those other areas of the budget. The legislature can then pass a law with those cuts, or with other cuts, new revenue, or the use of reserves.

You might remember that we went through this earlier this year at the end of February. Worcester Public Schools lost half a million dollars in one fell swoop, and with a midyear cut, the impact is double.
Should Governor Baker hit Quality K this year again, if your district is on this list, they'll get hit. 

FY14, where are you?

The cherry sheet numbers for the House Ways and Means budget came out late on Friday, so we weren't able to get our numbers crunched before the long weekend. A quick glance shows some lousy news: charter reimbursement is down a million dollars from the Governor's budget, and in total, education aid (of all types) is down about $4.5 million.
There's more to this than that, as local aid is also down, which will mean rejiggering the who-pays-what piece of our budget. Administration is out for a long weekend, so I'd say we might get these Tuesday?
Stay tuned...

Hold that adjustment!

Governor Patrick has announced today that he is asking the Legislature for a cut of $9 million from unrestricted local aid to cities and towns due to tax revenue being lower than expected.

One suspects that 28% of the cuts statewide will not be taken from the City of Worcester.

Why then is the Worcester City Council receiving a recommendation that they prepare for a cut of $2.5 million as part of tonight's proposed adjustments?

It would be sensible, in light of this announcement, as well as the reiteration last night that the City is not meeting its legal obligations to fund education, that this item be held for new recommendations from administration.*

*Recall that under the charter, the City Council may only accept or reject the City Manager's budgetary recommendations. They may not propose new ones.

What's the deal with local aid?

I asked a few of the financial mavens I barrage with questions to explain unrestricted local aid to me last year, and I was met with, more-or-less, a head shake. Now I understand why.

The Mass Budget and Policy Center tackles the other half of the state budget that has a lot to do with local budgets: unrestricted local aid. A few highlights:

• there isn't an overall formula
• changes in calculations haven't taken into consideration changes in wealth that have happened in the past several years.
• there have been cuts and restorations, but they've been the reverse of progressive.
• reform is difficult (maybe impossible) without increases in revenue

Well worth reading!

Questions on fiscal crisis

"there's also a terrible problem...steps and levels..those numbers are unsustainable"
8% growth in salary with no raises
"we have got to collective get our heads together and get sustainable public sector salaries"
Widmer: "it's clear to me that from what I've laid out a lot of the assumptions need to really be looked at..all basic assumptions need to be examined"

another member points out that the huge bump in pay goes to younger teachers

state aid and what is the potential percentage in reduction for FY12?
10% says Widmer
he pulls this back to 5%, upon consideration, IF revenues continue to rise

I asked him afterward if he thought the state would hold Ch.70 harmless, or risk a lawsuit by cutting it. He said that he thought that the state would cut Ch.70 only as an absolute last resort FOR THIS YEAR, but that he thought there was a good chance that they'd have to do it--and subsequently get sued--in coming years.

Possible loss of Medicaid reimbursement

Much caution here about the possible loss of Medicaid reimbursement, which would lead directly to 9C cuts...something TBD.

liveblogging from the Levi Lincoln Room

I don't know what that does for broadcasting

We've got the School Committe and the City Council all scrambled up together in quite a presentation of unity in the Levi Lincoln room (mysteriously overheated).

We're hearing first from City Manager O'Brien and then from Superintendent Boone.
keep in mind: we are in FY10 now

FY10 : Pension Liabilites one year reprieve
Local option taxes
$2 million decifit as of August 2009
Then the Quinn Bill got cut further ($400,000)
Plus we're projecting a loss of $800,000 of less revenue (interest income, trash bages, fees and permits all are down)
Looking at $3,200,000 then for FY10

FY11: further state aid cuts
valuations are expected to continue to decline
new construction growth is projected to continue to decline (FY07=$4.5 mil, FY10=$2.5 mil, FY11=$1.5 mil)

Local receipts adjusted downward another $800,000 in total
Fy11 projected increase of $1 million

Obligations for next year: $255 million for WPS, $24 million for charter schools, $104 million for fixed costs, $3 million for snow removal
To do everything we have left we have $105 million, but it's going to cost $115 million, leaving a deficit for next year of $10 million
HOWEVER
unemployment claims are down
and we have a hiring freeze of 10 positions
each of those is half a million, giving us $1 million back

$2,200,000 budget deficit for FY10, then
there also is still $1 million cushion for possible future 9c cuts
"Must plan for the worst and hope for the best"

Assuming state aid is level funded, that there is no snow carryover from FY10, and a 0% wage increase for all unsettled contracts

$10 million is A MINIMUM projected deficit

Possible solutions: airport transfer to MassPort of $1.5 mil
pension schedule extension $3.1 million
early retirement $2 million (up to 100 positions and only filling 20)
closure of telecom loophole $1.5 million

Lots of working with the Legislature on things

"Partnership with WPS is key to our city's future...through difficult times and the better days ahead" (capts deleted)

Partnership:

• preserved and exceeded minimum education funding
• $2.1 million in health surplus for funding above minimum ("in the absence of school-side collective bargaining reforms")
• stabilized funding after 9C cuts
• reforms--health and pensions savings--allow for funds to be redirected tot he classroom