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.
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