FY18 Budget Recommendation

FY18 Budget Recommendation

Board of Higher Education Meeting | December 6, 2016


December 6, 2016 BHE approves FY18 Budget Request

January 18, 2017Governor releases “House 1” FY18 Budget

Recommendation

Mid-April 2017House Ways and Means releases FY18 Budget

Recommendation

Mid-May 2017Senate Ways and Means Releases FY18 Budget

Recommendation

June 2017 Conference Committee Releases FY18

Budget Report

July 1, 2017 FY2018 Fiscal Year Begins

FY18 Budget Timeline


DHE line-items 2% increase over FY17; level funded over FY16 New investment aligned with “Big Three” [+$3M] Maintenance funding to support projected need of

mandatory obligations

The 24 Community Colleges and State Universities 2% increase through performance-based funding formulas Funding for FY17 collective bargaining costs into campus base Funding for FY18 collective bargaining costs ▪ Costs still to be determined at this time for AFSCME, APA, and MSCA

FY18 Budget Summary and Principles

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Focusing Investment on the “Big Three”


Key Investments: Performance Incentive Fund

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Performance Incentive Fund FY18: $4.25M +$1.5M Additional funding would allow for the expansion of campus partnerships and

for several new initiatives, specifically: The Commonwealth Commitment program. Grants would be awarded in

support of campus efforts to 1) improve transfer advising and 2) expand support services to students with the goal of allowing them to attend college full-time.

The expansion of the 100 Males to College program to support the college-going aspirations for low-income males, and males of color in Gateway cities.

The expansion of campus programs to increase the diversity of students enrolled in educator preparation programs to better reflect the diversity of students in the Commonwealth’s PreK-12 classrooms.


Key Investments: CDEP, Financial Aid

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Commonwealth Dual Enrollment FY18: $1.5M +$450K Includes an additional investment of $450,000 which will accommodate 60%

more students with the opportunity to take free or reduced-cost college level courses and earn credit toward their future college degrees. National research on dual enrollment concludes that such programs drastically increase the likelihood of students attending and graduating from college.

Massachusetts State Scholarship FY18: $97.6M +$1.1M Includes $1M in additional funding for MASSGrant, the state’s primary need-

based financial aid program that provides financial assistance to undergraduate students who reside in Massachusetts.

An additional $100,000 in funding will study the viability of a pilot initiative to encourage low income families to commit to a long-term college financing plan.


DHE Administration

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DHE Administrative Account FY18: $3.3M +$259K DHE Initiative: Campus Violence [$150K]

Supports additional funding for the implementation of the FY2017 Campus Safety and Violence Prevention (CSVP) recommendations.

Maintenance funding for DHE operations [$110K] Funding to support the payroll obligations for current staff (no increase in

FTEs); lease escalation. Level funding for State University Internship Incentive program [$1M]

Tufts Veterinary School FY18: $3M -$2M The DHE is requesting a $2M decrease and is also requesting line-item

language that initiates a new teaching partnership between Tufts and the community colleges that offer BHE-approved veterinary technician and veterinary health care programs.

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Community Colleges and State UniversitiesFY18 Budget Recommendation

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Three-Step Build for FY181.Roll FY17 formula funding allocations

into the FY18 campus line-item appropriations

2.Establish baseline personnel costs, inclusive of known collective bargaining increases

3.Recommend additional investment to be allocated through funding formula

Community Colleges & State U’s


Focus on Collective Bargaining Costs Fiscal impact of negotiated increases in the respective

collective bargaining agreements for FY17 is recognized in the FY18 recommendation.

FY17 value of collective bargaining contracts not currently appropriated in the campus line-items is ≈ $18.3M.

Funding request is only for staff paid from state appropriation.

FY18 collective bargaining costs not possible to accurately project at this time as AFSCME, MSCA, and APA are still TBD pending negotiation.

APA expires on 12/31/16; AFSCME and MSCA expire on 6/30/2017.

BHE’s FY18 Budget Recommendation requests that state-appropriated funds should support the value of all ratified collective bargaining agreements.


Annual Increases of Current Contracts

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Unit FY12 FY13 FY14 FY15 FY16 FY17 FY18

AFSCME 3.0% 3.0% 3.0% 3.0% 3.5% 3.5% TBD

MSCA 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% TBD

APA 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% TBD

MCCC 3.5% 3.5% 3.5% 3.5% 2.0% 2.5% 2.5%

APA contract is on calendar year that expires on December 31, 2016 AFSCME and MSCA contracts expire on June 30, 2017 MCCC contract expires on June 30, 2018

Yellow box denotes year one of a three-year contract

Red box denotes costs not funded through direct state appropriation

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The campuses receive an additional state contribution for benefit-related costs (“fringe”) for those employees paid from the state appropriation About 54% of total campus personnel are supported by

state funding. In FY17 the contribution from the state was approximately

$184M. The campuses are assessed fringe costs for all

campus employees not paid from the state appropriation About 46% of total campus personnel are not supported by

state funding. Collectively, the campuses will pay roughly $150M in fringe

in FY17. Fringe rates, determined by the Commonwealth, have

risen significantly—from 28.8% in FY15 to 35.16% in FY17 The fringe rate increase alone from FY15 to FY17 has

resulted in $28M more in costs to the campuses.

Acknowledging Impact of Fringe

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The 15 Community Colleges: $5.5M allocated through funding formula▪ $2.75M increase over FY17, a total of 2% over the aggregate funding

for the segment Estimated $9.6M for the FY17 incremental collective bargaining costs FY18 funding for the to-be-determined costs of successor collective

bargaining agreements

The 9 State Universities: $5M allocated through funding formula▪ $2.5M increase over FY17, a total of 2% over the aggregate funding for

the segment Estimated $8.7M for the FY17 incremental collective bargaining costs FY18 funding for the to-be-determined costs of successor collective

bargaining agreements

Recommendation Summary: Campuses

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Amends motion to add “operating” prior to “budget”

Eliminates projected range of need for FY18 collective bargaining contracts

Adds principle of supporting the FY18 costs of successor collective bargaining agreements

More clearly states the overall FY18 budget ask of 2% over FY17, not including annualized values of collective bargaining contracts

Changes from 11/29 FAAP Discussion

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DiscussionFY18 Budget Recommendation

FY18 Budget Recommendation

Education

Transcript of FY18 Budget Recommendation