Thursday, February 20, 2020

MassBudget: Governor's FY 2021 budget $74M short for low-income students; one-time revenue gains largely offset by planned phase-outs; and assumptions that MassHealth will remain stable

New MassBudget analysis finds delay or underinvestment for some essential benefits and programs

Governor's FY 2021 budget for K-12 funding falls short by $74 million for low-income kids

While the Governor's Fiscal Year (FY) 2021 budget proposes funding levels that mostly keep pace with the state's seven-year plan to overhaul funding for K-12 schools, it falls short in keeping one key area on track: support for students in low-income families.

In this critical area of the new school funding law - the Student Opportunity Act (SOA) - the Governor's FY 2021 budget only delivers on four percent of the necessary increase, leaving low-income students $74 million short. Under this budget proposal, state lawmakers would have to make up the remaining 96 percent of what's needed for low-income students over the next six years, according to a new MassBudget report, Opportunity Delayed: FY 2021 Governor's budget for K-12 funding falls short by $74M for low-income kids

"The goal of the Student Opportunity Act is to update our state funding for public schools so every child can get an excellent education, regardless of their background. Slower progress on any part of this new law means state lawmakers will have to play catch-up later," said Colin Jones, senior policy analyst and author of the report. "Meanwhile, schools would not be able to consistently phase in enhancements to their programs on schedule."

Other MassBudget briefs analyzing the Governor's FY 2021 budget found that:

In revenue, the Governor's budget proposes one-time revenues that will largely be offset by scheduled losses.

The Governor balances his budget by adding about $498 million in mostly one-time tax and non-tax revenues. These one-time sources will not be available to help fund the budget in future years.

Meanwhile, $420 million in recurring revenue will be disappearing from the state's revenue stream because of recent and pending changes in law. The Governor's FY 2021 budget already accounts for these losses, but the losses will leave the state with that much less each year to invest in communities.

Details on the revenue picture in the budget can be found in FY 2021 GOVERNOR'S BUDGET: Revenue - Governor proposes one-time revenues, which will largely be offset by scheduled loss of recurring revenues.

On MassHealth, the Governor proposes to hold steady.

The Governor's FY 2021 budget proposal does not include major health reform initiatives and assumes the MassHealth caseload will remain stable during the fiscal year. The proposal includes about $17.94 billion for a range of MassHealth programs and related spending. More than half of the MassHealth program spending is reimbursed by the federal government.

The Governor has proposed separate legislation to re-align overall health care spending to emphasize behavioral health and primary care.

For details on MassHealth funding in the budget, see FY 2021 GOVERNOR'S BUDGET: MassHealth and Health Reform - Governor proposes to hold steady.

The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts.

MassBudget: Governor's FY 2021 budget $74M short for low-income students
MassBudget: Governor's FY 2021 budget $74M short for low-income students

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