ESE Budget

Information on FY09 State Budget Cuts

October 16, 2008

Yesterday the Governor announced a series of reductions to the state budget using his "9C" authority to address shortfalls in projected state revenues. The complete list of 9C cuts has been posted on the Governor's webpage.

• The Chapter 70, regional school transportation, non-resident vocational transportation, and charter school tuition reimbursement programs have not been affected by the 9C cuts.

• Funding for the special education reimbursement ("circuit breaker") program has been reduced by $13.5 million. Please see the details below.

• The foundation reserve ("pothole") program has been reduced by $750,000. This will not affect any foundation reserve awards previously made.

• Funding for a number of grant programs has also been reduced. ESE program staff will be sending further information to grant recipients as soon as it is available.

The circuit breaker reductions affect both district payments and earmarked programs within the appropriation. Funds available for reimbursement of FY08 costs were cut by over $6.1 million (approximately three percent). The preliminary reimbursement amounts which are posted on our website were based on an assumed rate of 72 percent. Despite the cut, we expect to be able to maintain the 72 percent rate. However, it is highly unlikely that we will be able to increase the rate to the 75 percent statutory target this year. Funding for extraordinary relief payments for FY09 was also reduced, by $1 million. It is likely that we will have to prorate the reimbursement of these claims as well, but the extent will not be known until claims are submitted by districts later in the year.

Finally, it should be obvious to everyone that FY10 will also be seriously affected by the current economic situation. At this point, it is too early to tell whether cuts to the Chapter 70 program will be necessary, but it is not too early to begin contingency planning around that possibility. We will keep you informed as more information becomes available.

Please contact associate commissioner Jeff Wulfson at 781-338-6500 or jwulfson@doe.mass.edu for further information.