Maine State Budget

After a rocky start, Maine's newly elected Republican Gov. Paul LePage got much of what he asked for, as the Republican-controlled Legislature ...]]> In mid-June, we reported that Connecticut and Vermont had completed budgets in record time. Now it's Maine and New Hampshire's turn in this very difficult budget year.

Maine State Budget

After a rocky start, Maine's newly elected Republican Gov. Paul LePage got much of what he asked for, as the Republican-controlled Legislature approved a $6.1 billion two-year budget, which included the elimination of a $1.3 billion shortfall, tax cuts, pension reform and welfare reform.

The Maine House passed the budget by a margin of 123-19, while the Senate approved it 29-5. With support from Democratic legislators, both branches exceeded the two-thirds needed to enact the budget and to override any vetoes.

The Legislature’s Appropriations Committee struggled to craft a budget that addressed most of LePage’s requests, while rejecting the worst possible cuts in services to the poor. House Minority Leader Emily Cain (D-Orono) noted that no one is ever completely happy with a compromise budget, while Senate President Kevin Raye (R-Perry) praised legislators for the bipartisan process to forge the compromise.

Tax Cuts

The budget provides the largest tax cut in the state’s history including the following:

• reduces the top marginal personal income tax rate from 8.5% to 7.95%
• restructures the personal income tax rates, collapsing from four to three brackets, replacing current rates with 0%, 6.5% and 7.95%  and eliminates the payment of state income taxes for 70,000 low-income residents
• increases the standard deduction and personal exemption to the federal amounts
• eliminates the state’s alternative minimum tax
• raises the estate tax exemption threshold from $1 million to $2 million
• limits the value of the property tax circuit breaker to 80% of the total
• gives tax breaks to fishermen and redemption center owners
• provides tax credits for businesses when they invest in new equipment.

Pension Reform, State Employees

The budget reduces the $4.1 billion shortfall in the pension fund for state employees by $1.7 billion. This is accomplished by:

• eliminating the COLA for retirees for next three years, and after that, a COLA would only apply to the first $20,000 of an employee’s pension
• capping future increases at 3%

While the Legislature rejected LePage’s proposal to require state employees to contribute 2% more to their pensions, there was agreement on the following:

• state employees' wages will be frozen for two years
• no longevity payments will be issued to those not currently receiving such payments
• state employees must retire at full retirement age to be eligible for state-funded health insurance.

Welfare Reform

The Legislature rejected LePage’s plan to end MaineCare for 28,000 low-income families with children and a proposal to end MaineCare for childless adults. Also, the Legislature restored funding for dental care and other special services.

The governor and legislature agreed on the following:

• legal non-citizens currently receiving benefits will continue getting food stamps and federal welfare
• legal non-citizens receiving Medicaid will no longer be eligible if they have not lived in U.S. for five years
• a five-year cap will be imposed on those who receive federal welfare, i.e., Temporary Assistance for Needy Families/TANF.

Education, Higher Education Funding

LePage promised early on he would not cut funding for K-12 or higher education. The budget provides an increase of $65 million in funding for K-12 and level funding for higher education.

Health Insurance Reform

Republican lawmakers with scant support from Democrats rushed through a health insurance reform bill that purports to open up the insurance market in Maine and increase competition to the benefit of Maine residents.  The bill moves health insurance out of the state government arena into the marketplace.

Beginning in 2014, Maine residents who don’t’ wish to purchase insurance from their employers can shop for insurance in the other New England states except for Vermont. Insurance companies can’t deny coverage based on preexisting conditions, but opponents of the plan say the insurance industry is insulated with the creation of a high-risk pool to cover Maine residents who use more health services.

K-12: Maine Adopts Common Core Standards

Maine became the 42^nd state to adopt Common Core Standards. Commissioner of Education Stephen Bowen noted: "We need to give students and teachers clear expectations. As I’ve been traveling around the state, I have heard it over and over from teachers—they want us to adopt the Common Core. They are rigorous, and there is a sense there will be staying power to these standards so they can work with them for some time to come."

Maine Approves Charter Schools

LePage spearheaded a drive to make Maine the 41^st state to approve charter schools. The new law allows for no more than 10 charter schools to be established in 10 years. However, the law allows individual school boards to set up charter schools within their school districts, which would not be subject to the cap of 10 schools per year. Additional provisions of the law include the creation of a State Charter School Commission and setting a limit on the number of students who can attend them for the first three years.

Legislation Signed to Boost STEM Education

LePage signed into law, an initiative that will focus efforts on the teaching of science, technology, engineering and mathematics (STEM) in prekindergarten through postsecondary education. The law creates a STEM Council made up of teachers, representatives of state government, higher education and business. The council will address ways in which STEM can be integrated into the school curriculum. The new law will build on the efforts of the Maine Department of Education, which started a STEM team to work with businesses and other groups to advance STEM education.

Revised Education Funding Formula Passed

Legislation was signed into law, which revises the school funding formula and shifts more money to many of Maine’s rural school districts. Proponents say this will provide additional funds to rural school districts in northern and eastern Maine and make the education funding formula more equitable. Opponents claim the law will politicize how school districts receive education funding. Under the new law, the City of Portland, which is the largest school district in the state, and communities in Southern Maine will receive less funding. All school districts will receive less funding in 2012-13 when federal stimulus funds are gone.

Higher Education

Trustees approved a tuition increases at the University of Maine where rates will go up by 4.5%—the smallest increase in eight years, according to Chancellor Richard Pattenaude. In the Maine Community Colleges system, which faces a potential deficit of $2.3 million, tuition will rise by 2.4%.

New Hampshire State Budget

New Hampshire lawmakers passed a lean two-year budget of $10.2 billion, which became law without the signature of Democratic Gov. John Lynch. Lynch in his initial budget message to the Legislature, proposed an across-the-board cut of 5%, but the Republican-controlled House and Senate went further and cut state spending by 11%. Casualties included hospitals, the poor, public employees and higher education. Major cuts in the budget are as follows:

Hospitals

• cuts $250 million over two years in state payments to hospitals, which hospital administrators say  will mean the loss of funds to treat Medicaid patients

Children and Families

• cuts funding for Children in Need of Services/CHINS program by 50%  and changes eligibility requirements which would result in turning away more than 500 children
• cuts $10 million from child care program that helps working parents or parents seeking employment
• cuts New Hampshire Healthy Kids Program by $6.6 million
• eliminates more than $7 million in funding for cash assistance for unemployed parents, state-supported volunteer programs for Alzheimer’s Disease Caregiver Program, State Tobacco Quit Line and the State Farmer’s Market Program.

Pensions, State Employees

New Hampshire’s state retirement system currently has an unfunded liability of $4.7 billion. A pension reform bill that made its way through the House and Senate was ultimately vetoed by Lynch. A revised pension reform plan wound up in the state budget and was approved by lawmakers. As of July 1, 2011, public employees will pay more for their state-funded pensions. Also, the new law requires cities, towns and counties to pay 100% of their contribution to the retirement system. Prior to the new law, the state contributed 35% to the system.

Unions representing public employees filed a lawsuit in opposition to the bill, and the New Hampshire Retirement System (NHRS)  is challenging whether the law supersedes the authority of the NHRS.

Mayors and municipal officials are seeking clarification of the new law. Many say they will pay the increased costs, but will have to find money within local budgets.

Public Employees

• Public employees will be required to pay an additional 2%  toward their pensions
• More than 1,000 jobs will be eliminated
• State agencies will be asked to cut $50 million across the board in salaries.

Education K-12

Legislation was filed to give lawmakers the authority to approve Common Core Standards, but failed to get approval. Nonetheless, the New Hampshire Board of Education adopted the Common Core Standards on July 8, after holding several public hearings. According to the Department of Education, school districts will receive support from the department in aligning current state standards with Common Core Standards, and in the transition from the New England Common Assessment Program (NECAP) to a new assessment based on the Common Core. This process will happen over the next five years.

Education Funding

Lawmakers weren’t able to reach final agreement on a proposal that would give them a role in targeting state education funding to revenue-poor communities.

Lawmakers put off increases in funding for school districts by passing a new education funding formula that spends the same annual amount in the next two years. After that, the law will limit any increases to no more than 5.5%.

Higher Education

In addition to the severe cut that hospitals sustained, an equally devastating cut was made to University System of New Hampshire. Lawmakers reduced state appropriations by $45 million or 48% for the University System. New Hampshire’s Community Colleges were cut by $20 million.  Total cuts to the public higher education system over two years will amount to $110 million in state appropriations.

New Hampshire currently ranks 50^th nationally in state funding for public higher education.

"We now have in New Hampshire the dubious distinction of having experienced the largest single cut to a public higher education system in the history of America, period," said University of New Hampshire President Mark Huddleston.

As a result of the cuts in funding, university officials will eliminate more than 200 positions, reduce employee benefits, put off facility repairs, cut costs on all campuses and raise tuition 8.7% for state residents attending UNH.

One freshman lawmaker cautioned that higher education could be in for more cuts. Rep. Dan McGuire, who sits on the House Finance Committee, said a bill has been filed to break apart the University System of New Hampshire and let each institution that is now part of the system, stand on its own. McGuire claimed: “That’s an area where we can maybe save money, cut bureaucracy and improve the universities along the way.”

Carolyn Morwick is a consultant at NEBHE and former director of the Caucus of New England State Legislatures.

Gov. Dannel Malloy’s two-year plan to deal with a $3.2 billion deficit (in the first year alone) relies on significant concessions from labor to the tune of $1.5 billion. Unions gave Malloy strong support in ...]]>

Connecticut

Gov. Dannel Malloy’s two-year plan to deal with a $3.2 billion deficit (in the first year alone) relies on significant concessions from labor to the tune of $1.5 billion. Unions gave Malloy strong support in his race for governor. The remaining portion of the deficit would be addressed through $750 million in program cuts and $1.5 billion in tax increases.

The General Assembly’s Finance and Appropriations Committees met with Malloy and reached agreement on the budget for FY12-FY13. Following the meeting, the Joint Appropriations Committee released its budget, which will be debated in the House in the coming week. The governor and legislative leaders still must finalize an agreement with labor. Malloy has said he expects to see a budget on May 6.

Higher Education

Malloy has proposed a two-year $144-million cut to public higher education. Also included in his budget is a plan to restructure the system, which features the following:

• The boards of trustees for the Connecticut State University System, the community colleges, Charter Oak State College and the Board of Governors for Higher Education would be eliminated and replaced by a Board of Regents for Higher Education and one CEO.

• The Regents would develop a strategic plan to increase Connecticut’s educational attainment with input from the public and stakeholders.

• The Regents would develop a formula to distribute taxpayer support to campuses on the basis of enrollment, attainment of identified policy goals and other factors.

• The Regents would issue annual reports on: student outcomes such as retention and graduation; allocation of resources; cost analysis of academic programs; an affordability index based on the median income of a family of four; enrollment and completion by program; transfer of college credits across institutions and a joint report with the Department of Labor on employment and earnings of graduates.

The Legislature is expected to support the plan despite reservations of several key lawmakers, who have expressed concern about costs savings and the separate and distinct missions of the institutions involved. Several legislators also question why the University of Connecticut is not part of the plan.

UConn is facing a deficit of $45 million, which includes a $25 million cut by Malloy. Tuition at UConn will increase by 2.5% for the next academic year, reflecting the rate of inflation; in-state students will pay $10,676 in tuition and fees and out-of-state students will pay $25,152.  A 2.5% increase will also be applied to tuition and fees at the four Connecticut State Universities. Meanwhile, an increase of nearly 3%  will raise tuition and fee rates at the Connecticut community colleges.

As part of his plan to reduce the state deficit, Malloy has put the $23.4 million Connecticut Independent College Scholarship Program on the chopping block. This comes at a time when cutbacks are slated for federal student aid programs including Pell Grants. Judith Greiman, president of the Connecticut Conference of Independent Colleges, said more than 1,500 Connecticut students will not receive grants next year, and more than 3,000 will not receive grants in the following year. College presidents of private institutions have indicated they cannot make up the difference for the loss of the program.

The governor’s plan also includes a provision that would take away collective bargaining rights of many college faculty. According to The Chronicle of Higher Education, faculty who are department heads or who hold other decision-making posts would be reclassified as managerial employees, which would disqualify them to take part in collective bargaining as faculty members.

Pre-K-12

Malloy’s budget level-funds elementary and secondary education with a slight increase to early-childhood programs. Education officials are pleased that Malloy's budget fills the gap created by the absence of $270 million in stimulus funds.

Despite Malloy’s proposals to eliminate and/or consolidate state agencies, Sen. Beth Bye has filed legislation that would create a new state agency to address the mix of early-childhood education and childcare programs. She proposes an agency similar to the Massachusetts Department of Early Education and Care to help eliminate the state’s overlapping child-care programs.

Malloy has increased funding for school-choice programs by $70 million in order to comply with the terms of Sheff vs. O’Neill, which requires the state to reduce racial isolation in Hartford’s public schools.

Maine

The Joint Appropriations and Financial Affairs Committee continues to work on Gov. Paul LePage’s $6.1 billion spending package for the next two years. The spending plan is $300 million higher than the previous year.  Parts of the governor’s plan hinge on public employees, who are being asked to contribute 2% more of their salaries toward the state pension system, which currently has an unfunded liability of $4.4 billion. Also, the governor is asking that the retirement age for state employees be raised from 65 to 67.

Higher Education

LePage has level-funded the public higher education system in his budget. University of Maine officials, while expressing appreciation of how higher education is treated in the budget, will in all probability raise tuition by 4.5% for the coming academic year. Chancellor Richard Pattenaude says this would be the smallest increase in eight years. In 2009, tuition increased by 9.6%. The university must still deal with a $6 million deficit.

In his biennial report to the Maine Legislature, Maine Community College System President John Fitzsimmons called for an expansion of the system. Fitzsimmons noted that in fall 2010, the system turned away 5,300 qualified students because of a lack of capacity. He proposed a plan to increase capacity which includes expanding Southern Maine Community College to the former Brunswick Naval Air Station to eventually serve 2,000 students, and expanding Kennebec Valley Community College to the Good Will Hinckley campus, which would serve an additional 1,500 students. Fiztsimmons also mentioned "Accelerate ME," a program that helps Maine adults complete their college degrees, and the Maine Community College System’s Rural Initiative which provides scholarships and degree programs to rural students as additional ways to access higher education.

K-12

LePage’s budget provides an increase of $23 million in state aid to K-12. However, $59 million in stimulus funds will be lost, so education funding will actually decrease by $36 million. Legislators are looking to change the Essential Programs and Services/EPS funding formula for K-12, which has hurt rural communities. More than 25 bills have been filed to change the formula for education funding.

Massachusetts

The Massachusetts House Ways and Means Committee released a $30.5 billion budget for FY12 on April 13. The spending plan features a controversial proposal to reform the process for setting municipal health insurance rates outside collective bargaining. House Speaker Robert DeLeo, a staunch supporter of labor, favors the reform crafted by Rep. Brian Dempsey, chair of the Ways and Means Committee. The plan is estimated to save municipalities approximately $100 million and is endorsed by the Massachusetts Municipal Association.

A report by the Boston Foundation cited health care costs in local budgets soaring to $1 billion from 2000 to 2007. That’s $300 million more than state aid to education during the same period. While wealthier school districts were able to make budget adjustments, poorer school districts were forced to cut books and teachers. This runs counter to the 1993 Education Reform that passed to equalize funding for all Massachusetts school districts.

The House proposal calls for local officials to set the premiums for health insurance plans. Municipal employees would have the right to bargain their share of the premiums. Municipalities would also have the option of joining the Group Insurance Commission. Employees of the Massachusetts public higher education system and all other state employees are part of the Group Insurance Commission, which sets rates and premiums for health insurance costs outside the collective bargaining process. Labor leaders view the House plan as an assault on public employees and have vowed to remove lawmakers who support the plan. The Massachusetts Teachers Association opposes the plan and supports a scaled-down version proposed by Gov. Deval Patrick.

Debate on the House budget is expected to run from Monday, April 25, through Friday, April 29. Senate President Therese Murray predicts the Senate will pass a local aid resolution, which agrees with the plan outlined in the House budget, and take up the budget in late May.

Higher Education

The House and the governor agreed on funding higher education at FY11 levels However, the system is short $61.5 million, which represents stimulus funds used in FY 11 that are no longer available. Campuses will receive 7.5% less in funding. Beginning in FY12, all campuses will be allowed to retain tuition from out-of-state students.

The University of Massachusetts and its campuses face a deficit of $54.5 million for the coming year. President Jack Wilson, who will step down after this year, has cut more than 500 faculty and administrative positions, reduced overtime and decreased energy and discretionary expenses. Wilson will also raise student fees. Current in-state tuition and mandatory fees at UMass Amherst are $11,732, Out-of-state tuition and mandatory fees are $23,628.

The state’s scholarship programs will be funded at $86.5 million, which represents a decrease of $3 million from FY11. The House budget includes an additional cut of $1.8 million.

Pre-K-12

The House budget agreed with the governor’s budget in funding pre-k–12. While local aid was reduced by $65 million, education aid to school districts was increased by $140 million.

State Education Commissioner Mitchell Chester is proposing to reward teachers and administrators when students show improvement on their MCAS scores. The plan would also mandate a course correction for teachers of students who underperform.  The Massachusetts Teachers Association takes issue with the idea that MCAS would be central in evaluating teacher performance.

Secretary of Education Paul Reville wants to examine how New Hampshire’s dropout rate fell after increasing the minimum dropout age from 16 to 18. Gov. John Lynch of New Hampshire reported the rate fell to below 1% after raising the dropout age to 18. However, the New Hampshire House recently passed a bill restoring the dropout age to 16.

New Hampshire

The Senate Finance Committee heard testimony from Chancellor Edward MacKay and executives from the University System of New Hampshire who appeared before the committee to make their case for more state aid.

Gov. John Lynch cut the state appropriation to the University System of New Hampshire by 5%. The New Hampshire House went much further, cutting $31 million or 45% out of the budget for each fiscal year.

MacKay said the cut would have a dramatic impact on student aid. Cuts have also been made to the state’s scholarship programs. Lynch and the House agreed to eliminate the New Hampshire Postsecondary Education Commission and the state grant programs it administers.  MacKay said with federal programs being cut, there will be $6 million less for next year’s students.

The New Hampshire community colleges were cut in the House budget by $18.7 million over the next two years. Community college officials said this is the equivalent of closing two campuses. Enrollment has increased over 34% during the past three years.

Sen. Chuck Morse, chair of the Senate Finance Committee, said he’s not looking to cut as deeply as the House, but indicated there will be further cuts and warned higher education officials not to blame the Legislature for rising tuitions.

UNH President Mark Huddleston formed a task force to deal with a 45% or $31 million cut to the university’s budget by the New Hampshire House. Huddleston expects to eliminate 200 positions with layoffs, buyouts and not filling vacant positions. The task force is due to report on May 1 with a list of recommendations.

The university is also in the midst of negotiating faculty contracts. The faculty proposed a 12.5% salary increase over three years, while the administration countered with a 6.5% increase over three years. A “fact finder” recommended an 8.75% increase over three years with cuts to benefits. The faculty accepted the fact finder’s recommendation. But the University System’s executive board rejected the recommendation as unrealistic given the current fiscal climate.

K-12

State aid to local school districts was cut $8.7 million. An additional $7.9 million was cut from an aid program for severely disabled students.

Education officials are also sorting out the latest results from the New England Common Assessment Program. Based on the New England Common Assessment Program/NECAP, the state issues Adequate Yearly Program (AYP) reports for grades 3-8 and 11, combined with the 2009-10 NH-Alternate Assessment results for Grades 2-7 and 10, and the Class of 2010 graduation rate.

The New Hampshire Department of Education reports that of 469 school reports, 327 did not achieve Adequate Yearly Progress/AYP in one or more areas. Also, 14 high schools failed to meet the target of an 80% graduation rate. In subject areas, 197 schools achieved AYP in reading while 166 achieved AYP in mathematics. Those schools not making AYP for two consecutive years in the same area are designated as a School in Need of Improvement. Based on the new results, 60 schools are identified as new Schools in Need of Improvement.

Rhode Island

Speaker of the House Gordon Fox rejected Gov. Lincoln Chafee’s sales tax plan in its present form, saying the plan’s proposed 1% tax on water, home heating oil and manufactured supplies is “offensive.” Fox is willing to work with the Chafee administration to come up with an alternative plan.

Senate President Teresa Paiva Weed also rejected the Chafee plan and will explore other alternatives including spending cuts and consolidations. She specifically mentioned the elimination of the Rhode Island Office of Higher Education as an area where spending could be cut.

Higher Education

Chafee won praise from college and university officials for increasing funding for higher education by $10 million for FY12. The total funding for higher education is $154 million. But the officials say it won’t stop tuition and fees from going up especially after $40 million in funding cuts in prior years. At Rhode Island College, President Nancy Carriuolo said the college must still address a $4.6 million budget gap.

Chafee appointed and the Senate confirmed eight new members of the Rhode Island Board of Governors for Higher Education. The Board has 13 members and all but one member will be replaced. The new chair is Lorne Adrain, a Providence businessman and philanthropist who replaces Judge Frank Caprio.

K-12

The Chafee budget provides $700 million for school districts for FY12. Rhode Island will also receive federal Race to the Top funds of $75 million. In testimony before the House Health, Education and Welfare Committee, Commissioner Deborah Gist said the proposed budget for Rhode Island schools supports her formula for education funding, which distributes funds based on the number of students enrolled. Gist reported Rhode Island students outperformed students in New Hampshire and Vermont in the New England Common Assessment Program for 2010. Gist also admitted there are areas where improvement is needed. Only 33% of high school students were found to be “proficient” in mathematics. Rhode Island’s graduation rate, which is approximately 75% statewide, is 60% or lower in some school districts, and Hispanic students in Rhode Island have the lowest achievement rates in the U.S.

Vermont

The Senate Appropriations Committee approved a $4.68 billion spending plan, and the full Senate will debate the budget on April 21.

Higher Education

Gov. Peter Shumlin’s budget level-funded the University of Vermont and the Vermont State Colleges for FY12. UVM and the state colleges are asking for an additional amount of $4.2 million which reflects stimulus funds that were applied to these budgets in FY11.

UVM is requesting $43.3 million. The Vermont State Colleges are requesting $24.8 million from House and Senate Appropriations Committees.

In making their case to the House and Senate Appropriations committees, UVM President Dan Fogel and VSC Chancellor Timothy Donovan cited the following:

Vermont State Colleges:

• Full-time equivalent enrollment at all five institutions has gone up 56% over the past decade, and 114% at the Community College of Vermont.
• 54% of VSC students are the first in their families to attend college.
• 74% of VSC graduates stay in Vermont.
• Of Vermont high school seniors who planned to attend college in-state, 18% were headed to VSC in 2000 and 25% in 2008, while UVM’s share remained about the same at 12%.

University of Vermont:

• More than 29,000 UVM alumni—about 30% of all UVM graduates—live in Vermont.
• UVM is the state’s fourth largest employer, with 3,800 employees.
• UVM admitted 70% of its Vermont applicants, and of the Vermonters admitted, 40% enrolled.
• Of the roughly 25,000 out-of-state students attending college in Vermont, UVM enrolls about 32%, VSC 9%, and private colleges, 59%

UVM trustees will consider a 5.8% increase in tuition when they meet in May. Currently in-state students pay $12,888 and out-of-state students pay $32,528. Fees are $1,894. The Vermont State Colleges have already voted to increase tuition rates for the coming academic year. In-state students will pay $8,568 and out-of-state students will pay $12,864. Fees are $899.

K-12

In announcing the results of the latest NECAP statewide tests, the Vermont Department of Education invited the students of Montgomery Elementary School and their teachers and principal to attend a press conference recognizing their achievement. Officials identified 14 schools across the state with high scores for all students, as well as students in poverty. Of the schools identified, Montgomery had the highest percentage of students in poverty (63%), but also had the highest overall percentage of students who scored "proficient" and above (92.9%), and the highest percentage of students in poverty who scored proficient and above (88.8%).

According to the U.S. Census of 2010, Montgomery Center, Vt., has a population of 1,201 residents. It is a short distance from Jay Peak Mountain, which is five miles from the Canadian border. Typically, low-income, economically disadvantaged students do not experience the same  academic success as their classmates. Montgomery’s students proved to be the exception.



Connecticut Biennial Budget

Gov. Dan Malloy’s two-year $40 billion budget calls for $1.5 billion in new ...]]> The author, NEBHE consultant and former director of the Caucus of New England State Legislatures Carolyn Morwick, notes that this update on state budgets was accurate as of March 29, but events are changing rapidly in the six state capitals.

Connecticut Biennial Budget

Gov. Dan Malloy’s two-year $40 billion budget calls for $1.5 billion in new taxes, which includes hikes in the sales and gas taxes and in alcohol and cigarette taxes.

Part of the governor's spending proposal includes restructuring the state's higher education system. To reduce the deficit, the governor proposed cutting state funding for grants/scholarships for Connecticut students attending private institutions by 25% and for those attending state schools by 10%.

Gov. Malloy and House Speaker Christopher Donovan, both Democrats, aim to speed up what had become a long contentious budget process during the Rell years. Donovan expects the House to pass the budget for FY12-FY13 in early May. The Appropriations and Finance Committees are working out the details.

Maine Biennial Budget

Gov. Paul LePage vowed to veto any budget that does not include $200 million in tax breaks and welfare reform. Both Democratic and Republican legislators are working to reach a consensus on the budget, which does not necessarily guarantee the governor will get what he wants. The governor has indicated he will not cut education.

Massachusetts Annual Budget

Massachusetts is bracing for budget cuts, which are the biggest in 20 years. The FY12 budget of $30 billion is based in part on an additional $1 billion in sales tax revenues, the result of a hike in the sales tax approved in 2009. Cuts include eliminating 900 jobs, closing two prisons, cutting benefits to Mass Health (Medicaid) recipients, cutting $23 million out of emergency homeless shelter funds, and cutting state aid by $65 million. Gov. Deval Patrick’s budget contains no tax hikes. However, it is balanced by using $200 million in the state’s rainy day fund.

House and Senate budget-writers warn that Gov. Patrick’s recommended local aid cuts will in fact be much deeper. House Ways and Means Chairman, Brian Dempsey is advising House members to tell local officials that the $1.5 billion that was available for this year won’t be there for the new fiscal year. Senate Ways and Means Chairman Stephen Brewer said cities and towns are struggling to deal with rising health care costs, which are cutting into increases in local aid.  Speaker of the House Robert DeLeo stated his opposition to raising taxes. The House is expected to release its budget in mid April.

New Hampshire Biennial Budget

Gov. John Lynch proposed a budget of $10.7 billion, which is approximately 7% less than the current budget. The House Finance Committee approved a budget of $10.1 billion, which makes $519 million in additional cuts, claiming Gov. Lynch’s revenue estimates are off by $300 million.

In light of the deep cuts proposed by the Finance Committee, Gov. Lynch is asking the Senate to restore the cuts, especially in public safety, health and human services and higher education. Under the House bill, approximately 8,000 residents would be affected by the elimination of mental health services and programs. Lynch also said the committee’s proposal to cut state appropriations to the University System of New Hampshire by 50% and to the community colleges by 20% will make it very difficult for students to go on to college. The full House is expected to vote on the budget on Thursday, March 31^st.

The governor stated his opposition to passage of a bill by the House to allow students to drop out of school at age 16. This bill reverses previously enacted legislation that raised the dropout age to 18, which the governor noted resulted in the dropout rate declining.  He also supports a constitutional amendment to allow New Hampshire to provide more state aid to revenue-poor communities as a means of equalizing funding for public education. The House recently voted to return to an old formula allowing communities to set spending rates.

Rhode Island Annual Budget

The House Finance Committee began public hearings on Gov. Lincoln Chafee’s $7.7 billion spending plan during the week of March 21. At issue is the governor’s proposal to lower the sales tax from 7% to 6%, while including new items that would be subject to the sales tax. Chafee also proposes cutting areas in human services such as the state’s pharmaceutical assistance program for elderly residents of Rhode Island. Other areas that would be subject to cuts include ending the state’s film tax credits.

Vermont Annual Budget

The Vermont House passed a spending plan for FY 2012 on March 25 by a margin of 95-34. The budget is 3.6 % less than the previous year’s budget.

In a historic move, the House also passed the nation’s first single-payer health care reform bill. The Senate is expected to pass the bill and send it on to Gov. Shumlin, who is expected to sign the measure. Under the bill, Green Mountain Care, a universal health insurance plan would be available to all residents of Vermont.



"Making higher education more affordable" tops the list of solutions that the public believes would help people become more economically secure, according to a new Public Agenda survey, "Slip-Sliding Away: An Anxious Public Talks about Today's Economy and the American Dream."

The New York City-based Public Agenda finds four in 10 Americans are struggling ...]]>

"Making higher education more affordable" tops the list of solutions that the public believes would help people become more economically secure, according to a new Public Agenda survey, "Slip-Sliding Away: An Anxious Public Talks about Today's Economy and the American Dream."

The New York City-based Public Agenda finds four in 10 Americans are struggling to pay bills and worried about maintaining a middle-class life.

"Even with their short-term worries about paying the bills, the public's biggest concerns are about affording college and a secure retirement, and they put their faith in long-term solutions like making higher education affordable, job training and preserving Social Security and Medicare," according to the think tank's study funded by the Annie E. Casey Foundation.

Indeed, 63% of Americans say "making higher education affordable would be "very effective" in helping those who are struggling economically, compared with 48% who name cutting taxes for the middle class and 40% who cite reducing the federal deficit.

One reason Public Agenda posits for the faith in education: the public's perception of who's struggling the most in the current economy. Three-quarters of Americans say  people without college degrees are struggling, compared with just half who say college graduates are struggling.

Featured speakers will include Sawin Millett, commissioner of the Maine Department of Administrative and Financial Services. Millett will make a presentation on the proposed biennial budget, which is scheduled ...]]>

Featured speakers will include Sawin Millett, commissioner of the Maine Department of Administrative and Financial Services. Millett will make a presentation on the proposed biennial budget, which is scheduled for release in early February.

Other scheduled speakers include Jeffrey Thompson, assistant research professor, at the Politicial Economy Research Institute at the University of Massachusetts Amherst. Thompson is the author of Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure and Tax Incentives.

The good news is that the New England states are showing slight gains in revenue collections. The bad news is that it will not be enough to stave off a new round of budget cuts for the coming fiscal years. States are preparing budgets for FY12 and FY13 while addressing shortfalls in FY11 budgets. ...]]>

The good news is that the New England states are showing slight gains in revenue collections. The bad news is that it will not be enough to stave off a new round of budget cuts for the coming fiscal years. States are preparing budgets for FY12 and FY13 while addressing shortfalls in FY11 budgets. Most states have spent stimulus funds to avoid massive layoffs in K-12 districts and higher education. But governors and legislators fear the worst is yet to come.

Connecticut

Projected deficit for FY12: $3.67 billion

New Gov. Dan Malloy confronts a huge challenge in addressing Connecticut’s budget for the coming biennium. The state burned through $1.4 billion in its rainy day fund and has spent most, if not all, of the one-time stimulus funding. Malloy is scheduled to file his budget plan for the new biennium, FY12, FY13, in mid-February.

K-12

Commissioner of Education Mark McQuillan abruptly resigned from his post, citing the stress of the job and frustration with working in a politically charged environment. He also expressed his disappointment with layoffs in his department and not being successful in the competition for federal Race to the Top funds. Yet McQuillan was largely successful in navigating the political landscape and is credited with passage of school accountability legislation, a new mentoring program for teachers and passage of a school reform bill which increases requirements for graduation from middle school and high school while giving parents more power to affect change in failing schools through governance councils. Malloy will conduct a nationwide search for a new school chief. In the interim, Deputy Commissioner George Coleman is expected to fill the vacancy.

Higher Education

In June 2010, the trustees of the University of Connecticut approved a budget for FY 12 of $1.03 billion—a 4.8% increase over the previous year’s. The board also approved a 6% increase in tuition, fees and room and board charges for in-state students, which would amount to $20,968.

In September 2010, trustees of the Connecticut State University System approved a freeze on tuition and fees for academic year 2011-12, but cautioned they may have to reconsider due to the recession's severity.

Connecticut Community Colleges will increase tuition and fees by 2.5%.

Full-time students now pay $3,406 in tuition and fees, which will increase to $3,490 in the 2011-12 school year.

House Speaker Chris Donovan and Senate President Don Williams are reluctant to cut state services but are looking at ways to address the deficit including consolidating agencies and cutting the bureaucracy. Higher education is expected to be on the chopping block.

The Connecticut General Assembly’s Office of Legislative Research reported that budgets for UConn, the CSUS and the Connecticut Community Colleges increased by more than 200% over the past two decades. In a recent report released by the Legislature’s bipartisan Program Review and Investigations Committee, UConn and the CSUS were ranked ninth and 11th among peer institutions as the most expensive public universities in the U.S. Higher education leaders warned that with more cuts in state appropriations to higher education, they would have few options but to further raise charges.

Maine

Projected deficit for FY12: $1 billion

New Gov. Paul LePage appointed a committee to review all budgets and issue recommendations for the new biennium, FY12 and FY13, by the end of January. The budget is due in the Legislature on Feb. 11. Rep. Sawin Millet, formerly the ranking Republican on the Appropriations and Financial Affairs Committee and a veteran lawmaker, is heading the team of budget advisers. He was recently named director of the Department of Administration and Financial Services. LePage is expected to have the support of a Republican Legislature in making his budget recommendations for the new biennium.

Revenue collections are up by $365 million, driven by state income taxes, both individual and corporate. University of Maine economist Jim Breece said corporate tax revenue has come in above estimates all year. But he warned that the increase is the result of a change in how Maine assesses the corporate tax, not because Maine corporations have turned a profit.

K-12

LePage has not yet named his choice for education commissioner to succeed Angela Faherty who was appointed acting commissioner in July 2010, when Commissioner Susan Gendron left the post to become policy director for the Smarter Balanced Assessment Consortium. The outlook for the department remains uncertain as speculation grows about how resources will be allocated. LePage denies reports he will downsize or eliminate the department.

Higher Education

The University of Maine System submitted a budget request to former Gov. John Baldacci requesting a $7.1 million increase for FY12 and $7.4 million for FY13 for a total of $14.5 million in the biennium. If this request is approved, students would see a 3% increase in tuition rates. If the request is rejected, a 5% increase in tuition rates would be adopted. Maine’s community college system is requesting a 3.5% budget increase in each year of the biennium for a total increase of 7% over the next two fiscal years. No increase in tuition is factored into the request. Democratic legislators have indicated that at the very least, funding for the UMaine System might remain at current levels, but most agree that some cuts are inevitable.

Massachusetts

Projected deficit for FY12: $1.5 billion

As a part of his efforts to control spending, Gov. Deval Patrick begin his second term looking at a budget that will cut $1 billion to $1.5 billion out of state government. He is also looking to exercise greater control of pensions and health care costs and may cut local aid payments. His budget will be released on Jan. 26.

K-12

According to a report recently by the Boston Foundation and the Massachusetts Business Alliance for Education, municipal health care costs have increased dramatically, surpassing increases in state education aid (Chapter 70).

The net effect has been to cut spending for textbooks and teacher-training programs and increase class sizes. Boston Foundation President Paul Grogan said the report “puts into clear and compelling focus what many have suspected for some time: that our good-faith efforts to close the achievement gap are being erased by the cost of health care.”

At issue is a state law that requires municipal employees to bargain collectively over health care plans, while state employees are exempt from this requirement. The result has been that health care costs for state employees have risen much more slowly than those for municipal employees. In the coming legislative session, lawmakers are expected to take up the issue of exempting collective bargaining provisions that apply to health care plans for municipal employees.

According to Linda Noonan, executive director of the Massachusetts Business Alliance for Education, “Our significant investment in education since 1993, and the gains in student achievement that followed, are at risk due to the uncontrolled costs of employee health care.”

Higher Education

All public institutions are preparing for additional cuts in campus budgets for FY12. University of Massachusetts Chancellor Robert Holub anticipates a cut of $18 million for the new fiscal year, which begins on July 1, 2011. This is based on a level-funded budget and no new stimulus funds. Trustees will not set rates for tuition and fees until June. In-state students currently pay $11,732 in tuition and fees.

All public campuses—UMass, the State Universities (formerly the State Colleges) and the Community Colleges—are anticipating cuts of 7%.

New Hampshire

Projected deficit for FY12: $680 million

K-12

Following years of wrangling and lawsuits, New Hampshire will tackle a new education funding formula as Gov. John Lynch begins his fourth term. But already, many communities are complaining their school budgets will suffer.

Higher Education

After three consecutive fiscal years of level-funded budgets, the University System of New Hampshire requested an increase of $5 million in FY12 and an additional $5 million in FY13, with a total increase of $10 million for the biennium. The Community College System of New Hampshire is requesting a 4% increase in its budgets for FY12 and FY13.

Rhode Island

Projected deficit for FY12: $295 million

Gov. Lincoln Chafee begins his first term, as the state budget office is requesting all agencies to apply a 15% cut to their budget requests for FY12.

K-12

Commissioner of Education Deborah Gist will not comply with the state budget office’s request to cut 15% out of her budget and is requesting an increase of $45.5 million or a 5.3% increase in state funding.  Approximately half of this amount would offset the loss of stimulus funds and the remaining amount would be distributed to local school districts in education aid.

Higher Education

The Board of Governors for Higher Education also rejected a request from the state budget office to cut budgets by 15% and instead approved a $31 million or 22% increase in funding for academic year 2011-12 for the public higher education system. There would be no increases in tuition or fees.

The Rhode Island Higher Education Assistance Authority is requesting an increase of  $21 million in funding. Executive Director William Hurry said a cut of 15% would mean reducing scholarships for college-bound students.

Vermont

Projected deficit for FY12: $112+ million

In fall 2010, the deficit was projected to be $112 million, but according to the Vermont General Assembly’s financial analysts, it may be closer to $150 million.

K-12

As part of the Challenges for Change initiative, which cuts spending across the board in state and local governments, Vermont’s school boards were asked to reduce their budgets by 2.3%, allowing for a reduction in property taxes. In mid-December, however, education officials reported that the state’s 60 school districts could not meet the $23.2 million in voluntary spending reductions. Some districts reduced their budgets by a combined total of $4 million in budget proposals for FY12. With the majority of districts not being able to meet the targeted cuts, new Gov. Peter Shumlin announced that property tax rates will remain the same for FY12 and suggested using $19 million in federal stimulus funds to bridge the gap.

Voters will have a chance to weigh in on school budgets and the property tax rates on the first Tuesday in March, Town Meeting Day, when most school boards present their budgets for the coming fiscal year.

Higher Education

Trustees for the University of Vermont approved a budget for $289 million for FY11, which included a 4% increase in tuition. The budget reflects a 1.4% increase over the previous year. In prior years, tuition increased at the rate of 6%. For FY11, the in-state tuition rate is $12,180, and the out-of-state rate is $30,744.

Trustees for the Vermont State Colleges approved an increase in tuition rates of 3% for FY11. In the previous year, tuition rates increased by 6.8%. For FY 11, in-state tuition at the Vermont State Colleges is $8,232. Out-of-state tuition is $18,792.

Carolyn Morwick is a consultant at NEBHE and former director of the Caucus of New England State Legislatures.