Contact: Jonathan Palumbo

617-979-8348

jonathan.palumbo@state.ma.us

DEVAL L. PATRICK

GOVERNOR

TIMOTHY P. MURRAY

LIEUTENANT GOVERNOR

Paul Reville

SECRETARY

The Commission’s report underscores the importance of the Governor’s Readiness Project to the Commonwealth’s economic future.  A public education system that more fully educates all students will create a skilled workforce that promises to drive innovation and attract investment in the state for years to come.

The report focuses first on cost savings, presenting strategies for reducing employee health insurance and retiree benefit costs, maximizing Federal reimbursements to offset special education costs and promoting greater efficiency through regionalization and procurement and energy reform.  All together, the proposals stand to save the state as much as $550 million in the near term with the potential for greater savings over the coming years.

Recognizing that cost savings and efficiencies alone will not be sufficient for full implementation of the Readiness Project reform strategies, many Commission members acknowledged that new investment would be required to fund current and future education reforms.  In this context, many Commission members called for a balanced, multi-pronged approach requiring cost-cutting and efficiency strategies along with educational reform and revenue measures.

“Massachusetts has been and must continue to be a leader in education reform in order to be competitive on an international stage,” said Readiness Finance Commission Co-Chair, and Bentley University President Gloria Larson. “It is critically important for the health of the state’s economy that we boldly seek to achieve the most efficient and innovative educational system possible, and that sufficient support exists to prepare students for a dynamic and changing world.”

“Today’s students are tomorrow’s leaders,” said Commission Co-Chair, and Suffolk Construction President and CEO John Fish. “Our state has made a financial commitment to students through a strategic and sustained investment in public education. We must stay committed to the long-term vision of education reform outlined in the Readiness Project as a means to educate a workforce capable of fueling the Massachusetts economy.” 

In June of 2008 Governor Patrick assembled the Readiness Finance Commission and charged it with presenting a variety of alternative means to achieve sustainable education funding for current needs and the sequenced investments necessary for a ten-year Readiness Project implementation plan. 

Many Commission members strongly believed that the critical role of the education sector warrants support for new, incremental investments, even in this down economy. Commission members reported that there was a general sentiment in support of new revenues if attached concretely to efficiencies, restructuring and tangible savings, and if tied to the next iteration of broad and substantial education reform. 

While the Commission agreed it is imperative to envision and begin building a 21st century education system as outlined in the Readiness Project, the Commission acknowledges that, in the next couple of years the Commonwealth’s top priority will necessarily be preserving the existing level of quality in the state’s public education system.  The Commission determined that the greatest near-term opportunity is to seize this moment to make significant changes in the structure, operating assumptions and delivery mechanisms in the current public education system.

In the long run, the Commission concluded that the state’s strategy for educational transformation must make efficiencies and restructuring a part of genuine education reform.  As these changes are implemented, any available revenues can then be directed to the education sector in the knowledge that they will be spent efficiently and effectively.

The key recommendations for cost savings, efficiencies and restructuring outlined in the report include:

• Reducing municipal employee health insurance costs by moving municipalities into the Group Insurance Commission (GIC), or programs with equivalent or better rates, and enabling this action by granting plan design authority to municipal managers. Total potential savings: As much as $200 million.

• Reducing retiree benefit costs by moving retired teachers into Medicare. Total potential savings: Approximately $135 million.

• Increasing efficiency and capacity through regionalization by combining administrative and operational functions such as food services, transportation and building maintenance. Total potential savings: Nearly $20 million.

• Maximizing federal Medicaid reimbursements for special education costs and exploring other avenues to reduce or spread costs. Total potential savings: Over $100 million.

• Reducing procurement costs through procurement reform, enhanced use of collaboratives and coordinated purchasing. Cost savings range.

• Reducing energy costs through the use of energy savings companies, conservation campaigns and better purchasing. Total potential cost savings: Over $100 million.

“This report represents a significant contribution to our efforts to achieve maximum efficiency and educational effectiveness in these challenging times,” said Education Secretary Paul Reville. “The Commission’s comprehensive approach to cost savings, education reform and future investments will serve us well. We are very grateful for their work and leadership on these complex issues.”

The Commission was comprised of 22 members from the fields of finance, business, education and higher education with local and state elected officials. They met seven times and conducted one public hearing between June and December. They requested and received several reports from school and business finance experts and were briefed by the Executive Office for Administration and Finance on the state of education funding in the Commonwealth and on the state budget’s long-term prospects.

The entire report is available on the Executive Office of Education website at www.mass.gov/edu.

 Members of the Commission