Presented at the December 6, 2016 Board of Higher Education Meeting at Mount Wachusett Community College

1. FY18 Budget
Recommendation
Board of Higher Education Meeting | December 6, 2016

2. FY18 Budget Recommendation
December 6, 2016
BHE approves FY18 Budget Request
January 18, 2017
Governor releases “House 1” FY18 Budget Recommendation
Mid-April 2017
HouseWays and Means releases FY18 Budget Recommendation
Mid-May 2017
SenateWays and Means Releases FY18 Budget Recommendation
June 2017
Conference Committee Releases FY18 Budget Report
July 1, 2017
FY2018 FiscalYear Begins
FY18 BudgetTimeline

3. FY18 Budget Recommendation
 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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4. 4

5. FY18 Budget Recommendation
Focusing Investment on the “BigThree”
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6. FY18 Budget Recommendation
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.

7. FY18 Budget Recommendation
Key Investments: CDEP, FinancialAid
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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.

8. FY18 Budget Recommendation
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.

9. Community Colleges and
State Universities
FY18 Budget Recommendation
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10. FY18 Budget Recommendation
Three-Step Build for FY18
1. 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
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11. FY18 Budget Recommendation
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 stillTBD 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.

12. FY18 Budget Recommendation
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

13. FY18 Budget Recommendation
 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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14. FY18 Budget Recommendation
 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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15. FY18 Budget Recommendation
 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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16. Discussion
FY18 Budget Recommendation
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