State Capital Notes …
With the 2016 presidential campaign dominating the airwaves and reauthorization of the landmark federal Higher Education Act looming, one could be excused for focusing on Washington, D.C. But in many ways, state capitals remain the center of action in higher education. Here is our annual attempt to summarize the state legislative sessions and their impact on higher ed …
Connecticut
Connecticut Businesses Cry Foul on Budget, Taxes
On June 3, 2015, the Connecticut General Assembly passed a two-year budget plan of $40 billion, which increases taxes on the wealthy and middle class. The plan prompted an outcry from corporations, hospitals and human service advocates. At the end of June, the controversial plan underwent a series of adjustments agreed upon by Gov. Dan Malloy and legislative leaders.
The revised budget plan included putting off the implementation of a unitary tax until July 1, 2016. The unitary tax would require that national and multinational corporations pay taxes on a portion of all earnings, not just earnings in Connecticut. Malloy and lawmakers also responded to criticism from business leaders by retaining the Connecticut sales tax on computer and data processing services at 1% instead of increasing it to 3%. Ultimately, legislators walked back from approximately $178 million in tax hikes.
In addition, revenues from the state’s sales tax dedicated to transportation improvements and property tax relief were used to increase funding for hospitals. A big winner in the session was United Technologies Corporation, slated to receive up to $400 million in tax breaks in exchange for a $500 million investment in research facilities and headquarters in Connecticut. This is projected to preserve 75,000 jobs while protecting the state’s aerospace and engineering base.
K-12 Legislation Signed Into Law
SB 1054 An Act Concerning Students with Dyslexia requires dyslexia to be included as a learning disability in screening students for special education.
Public Act 15-237 An Act Concerning High School Graduation Requirements delays by a year the implementation of scheduled changes to state high school graduation requirements that were scheduled to apply to the 2020 graduating class, beginning high school in fall 2016. These changes will now apply to the graduating class of 2021 beginning high school in 2017.
Under the requirements, students must: 1) earn 25, rather than 20, credits to graduate from high school (which includes an additional credit each in math and science and a new two-credit world language requirement) and 2) pass five end-of-year exams and complete a one-credit senior project in order to graduate. The act also delays by one year the requirement that school districts offer students support and alternative ways to meet the new graduation requirements if they are unable to meet them.
Pre-K Funding
The state budget provides funding for more than 1,000 additional seats for low-income 3- and 4-year-olds in preschool programs, including funding for public schools to renovate, expand schools to accommodate future increases in PreK enrollment.
K-12 Funding
The state cut K-12 education spending by 4.9%, primarily by reducing reimbursements to cities and towns for special education, transportation and other services.
Higher Education Legislation Signed Into Law
HB 6117 (Special Act 15-18) An Act Concerning the Use of Digital Open-Source Textbooks establishes an open-source textbook consortium for college students and the use of resources to supplement education materials and reduce costs.
HB 6812 (PA 15-228) An Act Permitting Faculty to Attend Executive Sessions of the Board of Regents for Higher Education Upon Invitation allows chair, vice chair of the Board of Regents (BOR) faculty advisory committee who serve as non-voting ex-officio members of the BOR to attend BOR executive sessions at the board chair’s invitation. Prior law excluded them from all executive sessions.
HB 6907 PA (15-200) An Act Concerning the Duties and Authority of the Connecticut Higher Education Supplemental Loan Authority (CHESLA) allows the the authority to issue loans to certain borrowers to refinance certain public or private student loans, including CHESLA loans.
HB 6915 (PA 15-162) An Act Concerning a Student Bill of Rights creates the position of student loan borrower ombudsman who would provide assistance to student loan borrowers.
HB 6919 (Special Act 15-20) An Act Establishing a Task Force Concerning Outcomes-Based Financing establishes a task force to develop a strategic outcomes-based funding plan that is aligned with the goals and benchmarks established by the Planning Commission for Higher Education. The legislation specifically mentions increasing the number of degrees awarded to residents of the state, including but not limited to degrees awarded in areas of workforce shortages, to students from underrepresented populations.
HB 7007 (PA 15-75) An Act Implementing the Recommendations of the Planning Commission for Higher Education adopts the recommendations of the Planning Commission for Higher Education for the goals of higher education in the state.
Higher Education Funding
For the University of Connecticut, Malloy recommended a cut of $9.8 million in each fiscal year. The Legislature recommended a cut of $16.7 million.
For the Connecticut State Colleges and Universities, which includes the Connecticut Community Colleges and the Connecticut State Universities, the governor recommended a cut of $20.5 million and the Legislature recommended a cut of $8.6 million. The Legislature prevailed.
Maine
Lawmakers Avert Government Shutdown
Maine state legislators passed a two-year budget of $6.7 billion, overriding Gov. Paul LePage’s veto and essentially averting a government shutdown. Throughout the session, the governor continued to fuel a contentious atmosphere with threats to legislators that he would hold up legislation unless he got his way. At one point, he warned he would withhold funding for the Good Will-Hinckley School after House Speaker Mark Eves, a Democrat, was hired as president of the school. Subsequently, the school’s board withdrew their offer to Eves.
A court fight ensued after LePage insisted that he had the authority to act on 70 bills that had been sent to his desk. Legislators countered that the bills had automatically become law since the time for the governor to veto them had expired. In the end, the court sided with the Legislature, delivering a political blow to the governor. The court’s ruling determined that LePage was mistaken in insisting that the Maine Constitution allowed more than 10 days to veto legislation.
The budget produced mixed results for Maine’s business community. The governor initially proposed eliminating the state income tax and paying for lost revenue by increasing other taxes such as the sales tax. Ultimately, the income tax was cut, while the state sales tax remains at 5.5%, instead of being reduced to 5%. The 8% tax on meals and lodging will remain at that rate until Dec. 3, 2015, when it will rise to 9%. The service provider tax will increase to 6%, up from 5%.
Although the efforts to raise the minimum wage (currently at $7.50 per hour) failed, a voter referendum to increase the wage to $12 could prevail, The Maine People’s Alliance and the Maine AFL-CIO are collecting 60,000 signatures to put a referendum on the ballot to increase the minimum wage to $9 per hour in 2016 and then by a dollar a year until it reaches $12 an hour in 2020.
K-12
Schools received an increase of $80 million over the next two fiscal years.
Higher Education Legislation Signed Into Law
LD 428 (Chapter 72) Amends the Powers and Duties of the State Board of Education including the power to enter into an interstate reciprocity agreement regarding postsecondary distance education, administer the agreement and approve or disapprove an application to participate in the agreement from a postsecondary institution that has its principal campus in the state.
LD 856 (Chapter 257) amends the Competitive Skills Scholarship program to allow for participation in early college and career and technical education programs.
LD 878 (Chapter 103) to support college affordability in Maine.
LD 1441 (Chapter 201) to establish the public higher education systems coordinating committee.
Higher Education Funding
The state increased funding for the University of Maine System by $20 million and for Maine’s community colleges by $8 million. Trustees at the University of Maine System approved a budget of $518 million while freezing tuition for the fourth straight year. According to Rebecca Wyke, vice chancellor for administration and finance, declines in revenues and student enrollment have resulted in the elimination of 200 positions. Wyke has cautioned that the rating agencies could downgrade the system’s bond rating if ongoing financial pressures continue, which would mean the university has to pay higher interest on any future borrowing.
Transfer Agreement Announced
Beginning in June 2016, Maine students enrolled at Maine’s public colleges and universities will be able to seamlessly transfer 35 units of general education courses in any one of Maine’s 14 public institutions and receive full credit.
Consolidation of Administrative, Financial Operations
University trustees signed off on plans to consolidate financial and administrative functions across the seven separate campuses. The consolidation of information technology and purchasing services has already taken place and the consolidation of human services functions will occur this fall.
University of Maine Augusta and Distance Learning
Trustees approved a five-year plan at UMaine at Augusta that focuses on distance learning.
Massachusetts
MBTA Reform, Tax Policy Addressed in State Budget
On July 17, 2015, Gov. Charlie Baker signed a $38.1 billion budget for FY16, which represents a 3% increase over the previous year’s budget. He noted that the budget addresses a $1.8 billion shortfall for FY16 and invests in jobs without raising taxes
The spending plan featured major policy changes including the creation of a fiscal control board for the MBTA, and freeing the MBTA for three years from the state’s anti-privatization law (the Pacheco Law). The severe winter of 2015 resulted in major service delays and highlighted maintenance issues associated with the operation and management of the MBTA. The governor and lawmakers concentrated their efforts on delivering a plan to improve the operation of the MBTA in bad weather.
The budget also included an expansion of the Earned Income Tax Credit for low-income families, paid for by delaying a planned corporate tax deduction.
The largest program in the Commonwealth’s budget is MassHealth and its related programs. According to the Massachusetts Budget and Policy Center, Mass Health provides health insurance to approximately 1.7 million residents and brings in close to $8 billion annually in revenue. MassHealth is funded jointly by the Commonwealth and the federal government.
Baker cut $162 million in spending, including cuts to the University of Massachusetts, the trial court, tourism, cultural expenses and local programs. The Legislature responded by overriding all of the governor’s vetoes.
Early Education & Child Care Funding
Funding increases by $23 million over FY15. The largest increase for Supportive Child Care, which provides early education and care for children in the care of the Department of Children and Families.
K-12 Education Funding
Chapter 70 aid to education increases to $4.51 billion—a 3% increase over the previous year.
Higher Education Funding
Funding for public higher education is $1.21 billion, a 3% increase ($35 million more than the prior fiscal year). Funding is actually 19% below 2001 levels, which according to the Massachusetts Budget and Policy Center, is in part due to the income tax cuts phased in over the late 1990s and early 2000s. The cuts continue to cost the state per $3 billion per year.
Tuition Retention for University of Massachusetts
In 2015, the Commonwealth increased state funding for UMass by $40 million. In return, the university agreed to freeze tuition and fees, making it more affordable for students. However in June 2015, UMass Trustees voted to raise tuition and fees by 5%. At UMass Boston, the increase will be 6%, while UMass Lowell’s increase will be 7.9 %.
UMass President Martin Meehan noted that when he was a student at UMass Lowell, the Commonwealth paid approximately 88% of the cost of the university. Today, the state’s investment is approximately 24%. Meehan said that when adjusted for inflation, there has been little change in the cost to educate a student over the past three decades, with the difference now being that students are shouldering the cost.
In FY 2017, the budget provides for UMass to retain tuition and fee revenue from in-state students. All campuses (state universities, community colleges) retain tuition and fee revenue from out-of-state students.
Note that the Massachusetts Legislature is still in session technically. It is a biennial session, which will conclude in 2017.
New Hampshire
Breakthrough on Budget
At the end of June 2015, New Hampshire lawmakers sent an $11.35 billion budget to Gov. Maggie Hassan, who rejected the plan citing tax giveaways to large corporations even while cuts were proposed for higher education, healthcare, public safety and transportation.
Lawmakers passed a measure to keep government operating beyond July 1. Items not addressed in the budget include continuing the expansion of Medicaid, more spending for mental health and substance abuse services and a pay raise for state employees.
In late July, Hassan proposed a compromise budget that included lowering the business profits tax to 7.95%. Lost revenue from the business profits tax would be made up by increasing the tax on cigarettes with a 21-cent tax hike that is estimated to generate $30 million, and a $5 dollar increase in car registration fees estimated to generate $20 million.
Hassan, in her compromise proposal, addressed the heroin addiction problem facing New Hampshire and included funds for establishing a drug court. Republicans rejected Hassan’s compromise budget. The Legislature approved a continuing resolution so that from July 1, 2015 to Dec. 31, 2015, state agencies will be able to spend half of what was appropriated for FY15.
In mid-September, legislative leaders and the governor reached agreement on a new budget. The deal includes reducing the rates of two major business taxes and provides for a trigger mechanism if revenues fail to meet state targets. Starting in 2016, the Business Profit Tax rate would be lowered from 8.5% to 8.2%, while the Business Enterprise Tax would be lowered from 0.75% to 0.72%. If the state meets revenue targets, the Business Profits Tax would drop to 7.9% and the Business Enterprise Tax to 0.7%. Both the Business Profits Tax and the Business Enterprise Tax brought in a total of $549.6 million in 2014. Proponents say lowering the tax rates would improve the business climate in the state.
The new plan does not include expansion of the state’s Medicaid program. It adds money to a fund to treat substance abuse and prevention. The budget also includes a 2% pay raise for state employees.
K-12 Funding
Lawmakers would increase funding for charter schools
Higher Education Funding
The New Hampshire Senate restored cuts made by the House to the University of New Hampshire.
At the end of June, Trustees at the University System of New Hampshire voted to raise tuition rates by 2.75% in the fall. The System, which includes the University of New Hampshire, Plymouth State University, Keene State College and Granite State College, requested a total of $205 million for the biennium. This would have allowed the trustees to freeze in-state tuition rates for the fourth straight year. The governor proposed funding the system at $181 million. A further cut of $28 million to the System was included in the House budget.
Undergraduate tuition at UNH in Durham is $13,670 per year for New Hampshire residents, while out-of-state students pay $26,650 per year. Both rates exclude costs for room and board.
Rhode Island
Getting Rhode Island Back to Work
Gov. Gina Raimondo signed an $8.7 billion budget, which preserves much of her plan to provide new jobs for Rhode Islanders with a series of economic development tools. The budget, according to Raimondo, will reduce the cost of doing business in the Ocean State, thereby encouraging businesses to locate in Rhode Island. The governor’s new jobs toolbox includes:
- Rebuild Rhode Island, providing a tax credit of up to 30% for high-impact real estate projects costing at least $5 million.
- Tax Increment Financing (TIF), allowing developers to keep much of the revenue generated by a completed project. Revenue can’t exceed 30% of project’s total cost.
- Small Business Assistance Program, providing small businesses with access to capital with the creation of a Small Business Access to Capital Fund.
- Rhode Island New Qualified Jobs Incentive Act, providing a tax credit for companies for each high-paying job that a company creates.
The budget also provides a repeal of the sales tax on energy for businesses, a reduction in the minimum corporate tax from $500 to $450 and elimination of the surcharge on imaging e.g. x-rays and other outpatient services.
An increase in the minimum wage to $9.60, up from the current $9, begins on Jan. 1, 2016.
The spending plan eliminates the state tax on Social Security benefits and provides the full terms of the proposed legal settlement between the state and its current and former workers to end the latter’s lawsuit against the 2011 pension overhaul.
The state will also retain HealthSource RI, with a 3.5% assessment on all health insurance premiums sold through HealthSource. The cost of the program will now be assessed in the same way that the federally facilitated exchanges are assessed. The proposed premium surcharge will be reduced by 2.86% on an individual’s monthly premium.
Smokers will have to pay more with a 25-cent tax increase on cigarettes, with the total price for a pack of cigarettes rising to $3.75. This is expected to generate $7.1 million in new revenue.
K-12 Education Legislation Signed Into Law
H.5047. Chapter 224 of 2015 An Act Relating to Education–Health and Safety of Pupils requires all public middle schools, junior high schools and high schools to maintain opioid antagonists on school premises for administration by school personnel in an emergency to pupils or staff suspected of having an opioid-related drug overdose.
K-12 Funding
The budget provides funding for full-day kindergarten statewide and increases spending on K-12 by $35.8 million. The plan also allocates $20 million for school construction and creates a School Building Authority and Capital Fund for school construction projects.
Higher Education Legislation Signed Into Law
5578, Chapter 231 of 2015 An Act Related to Education, Distance Learning authorizes reciprocity agreements among states and distance-learning programs
Higher Education Funding
The budget provided an increase of $7.5 million for Rhode Island Community College, Rhode Island College and the University of Rhode Island.
The budget restructured the state’s college scholarship and grants program by eliminating the Rhode Island Higher Education Assistance Authority (RIHEAA) and creating a new division of higher education assistance in the Office of Postsecondary Education. Several RIHEAA positions are slated for elimination, and savings are expected to increase total aid awards in FY16 to over $10 million, increasing need-based awards by $2 million and providing $1.3 million for a dual-enrollment program allowing qualified high school students to earn college credit at no cost.
Performance-based funding for higher education was among casualties in the session.
Vermont
Lawmakers Elect a Governor, Approve Ed Reform and Cost Containment
Vermont lawmakers began the 2015 legislative session with the election of a governor. Incumbent Gov. Gov. Peter Shumlin, a Democrat, received 46.4% of the vote, while his opponent, Republican Scott Milne, received 45.1%. With neither candidate achieving 50%, the state constitution requires that the election be decided by the Vermont General Assembly. Shumlin survived a close challenge with a predominately Democratic legislature supporting him, but with his clout diminished.
The Vermont General Assembly produced a $5.5 billion budget, which included $30 million in tax increases. The budget closed a $113 million gap and made $7.9 million in income tax changes, including a cap on itemized deductions and a 3% alternative minimum tax for those making $150,000 or more. The state workforce will be reduced with early retirement incentives and the elimination of some positions.
Lawmakers focused much of the session on education reform and cost containment. The state currently has 277 school districts. Since 1997, the state’s school population has declined by 21,000 students. The decline in school enrollment is expected to continue through 2030, according to state officials. A plan to merge school districts is anticipated to produce savings in administrative costs. Statewide school spending will be capped at 2% in 2016 and 2017. After that, the cap sunsets.
PreK-12 Legislation Signed Into Law
361 (Act 46) An act relating to making amendments to education funding, education spending, and education governance creates a pathway for the state’s 277 school districts to merge into larger PreK-12 school systems.
Higher Education Legislation Signed Into Law
44 (Act 45) An act relating to creating flexibility in early college enrollment numbers and to creating the Vermont Universal Children’s Higher Education Savings Account permits one or two of the Vermont State Colleges to enroll more than 18 students in an early college enrollment program, provided that the total enrollment among the three participating colleges does not exceed the existing cap of 54. The chancellor and college presidents must develop a system to apportion student slots fairly each year.
S.71 (Act 19) An act relating to governance of the Vermont State Colleges amends and updates the statutes relating to the Vermont State Colleges’ Board of Trustees by reducing the governor’s appointments to the 15-member board to five, from the current nine, while authorizing the board to elect four members. It shortens the terms of the governor’s appointees from six years to four years, lengthens the board appointments from one year to two years, and removes prohibition on selecting the student member from the same college for more than two consecutive yearlong terms. Authorizes the board to rename the Vermont State Colleges so long as the board retains the word, Vermont in the name.
Higher Education Funding
The University of Vermont and the Vermont State Colleges receive $67 million in state funds. In the last budget cycle, UVM was funded at $42.5 million, while the Vermont State Colleges were funded at $24.3 million.
A legislative subcommittee was approved in the 2015 session to study performance-based funding for higher education. The subcommittee is looking at student demographics and will report its findings to Shumlin and the Vermont General Assembly on Dec. 15, 2015. Both UVM President Thomas Sullivan and VSC Chancellor Jeb Spaulding are supportive of performance-based funding.
Tuition Increases at UVM, Vermont State Colleges
Trustees for UVM approved a 3.4% increase in tuition for the coming academic year. Tuition for Vermont residents will increase from $14,184 to $14,664. Tuition rates for out-of-state students will rise from $35,832 to $37,056. In-state rates for students at UVM medical school will see tuition rise from $32,020 to $33,460. Out-of-state students will see tuition rates increase from $56,060 to $58,020. Trustees approved a 6.3% increase in student financial aid. Vermont State College Trustees approved a 5% increase ($600) in tuition rates for in-state students.
Carolyn Morwick directs government and community relations at NEBHE and is former director of the Caucus of New England State Legislatures.
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