MMA letter to conference committee outlining municipal priorities in FY14 state budget

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The Honorable Brian S. Dempsey, House Chair
The Honorable Stephen M. Brewer, Senate Chair
The Honorable Stephen Kulik, House Vice Chair
The Honorable Jennifer L. Flanagan, Senate Vice Chair
The Honorable Vinny deMacedo, Ranking House Member
The Honorable Michael R. Knapik, Ranking Senate Member
Joint Conference Committee on the Fiscal 2014 State Budget
State House, Boston
Dear Chairman Dempsey, Chairman Brewer, Vice Chairman Kulik, Vice Chairman Flanagan, Representative deMacedo, and Senator Knapik:
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association is writing regarding the House and Senate fiscal 2014 state budget bills that are before you in conference committee.
City and town officials across the state appreciate the commitment made to local government in both budget bills during another very challenging fiscal year. It is clear that local government and support for municipal services continue to be a high priority for you and the entire Legislature. The MMA and our members are grateful for your leadership, and for the budgets that you ushered through your branches.
We would also like to thank the Legislature for the strong vote earlier this year in favor of transportation finance legislation that would provide needed funds for critical transportation investments, including a $300 million Chapter 90 program, and provide some measure of support for operational spending next year. The MMA is proud to have supported the joint House-Senate framework that is now on the verge of enactment.
Unrestricted General Government Aid (UGGA)
Cities and towns rely on Cherry Sheet Unrestricted General Government Aid (UGGA) distributions to help pay for police, fire, public works and other municipal services. This account [1233-2000 and section 3] has been cut by $416 million since fiscal 2008, leaving local government with fewer resources to fund the basic services that people depend on every day.
Both the House and Senate budget bills would increase UGGA by $21 million next year but pay for the increase in very different ways. The House would fund the increase in municipal aid with an appropriation of estimated new Lottery revenues and state tax collections for fiscal 2014. The Senate would use a portion of any fiscal year 2013 year-end surplus. We appreciate the support for this important increase in both branches. However, cities and towns must enact their budgets by June 30, and therefore we strongly support the House approach that would provide a final UGGA amount in early July rather than in October or later under the Senate plan. The full $920 million appropriation for UGGA needs to be included in the state’s GAA, otherwise cities and towns will not be able to incorporate the $21 million increase in their operating budgets, and would not be able to use the funds to pay for recurring costs, including teachers in the classroom, police officers and fire fighters on the streets, and critical employees who deliver key services.
Chapter 70 School Aid
The MMA supports the Senate appropriation for Chapter 70 school aid [7061-0008] that would increase the fiscal 2014 level of funding to $4.30 billion, an increase of $130 million. This appropriation would ensure that all districts are able to reach the “foundation” level of spending, continue the scheduled “target share” reforms to set a fair framework for state and local contributions, and guarantee that all districts receive at least $25 per student in new aid next year.
We also strongly support the language in section 3 of the Senate bill that would begin a limited four-year phase-in to include the health care costs of retired teachers in “net school spending” under Chapter 70 in districts where it is not already included. This is a very important change that would more accurately and consistently count school spending and bring greater integrity to the state’s system of school finance.
Special Education “Circuit Breaker”
We strongly support the Senate appropriation to cover the estimated full state share of the special education “circuit breaker” program [7061-0012] at $253 million, an increase of $10 million over the current fiscal 2013 level of funding. The “circuit breaker” was an important part of the landmark special education reform law of 2000 and helps all municipal and regional school districts afford quality care for students with the greatest needs. Full funding was a signature achievement of the Legislature’s last year, and the $253 million appropriation is necessary to maintain the same level of commitment to the program. These funds benefit citizens in every city, town and school district in the state.
Public Safety Residency Law
We strongly oppose section 37, as amended, in the Senate bill that would eliminate the statutory 10-mile residency requirement for police officers and firefighters and provide that residency is a subject of collective bargaining. There is no similar provision in the House bill. Currently, the law requires that police officers and firefighters reside no more than 10 miles from the communities in which they work. We understand that section 37 in its current form may be intended to be a local option, but in reality it is not a local-option law, and it contains many fatal flaws.
The first problem is that the provision would undermine the management rights of cities and towns by making the statutory 10-mile limit a matter to be decided by collective bargaining. This may seem like a subtle change, but it is not. The law now sets the limit at 10 miles. Management may decide to seek a shorter limit, or may be willing to provide some flexibility, but that decision is entirely up to the municipal chief executive, who is held accountable by the voters on matters of public safety and security. By statutorily stating that the residency limit would be a subject of collective bargaining, section 37 would strip the executive of this prerogative, and the residency law would be determined by the outcome of a bargaining agreement, exposing communities to serious management and logistical issues. By making the residency limit an explicit subject of collective bargaining, section 37 would, for the first time in the history of Massachusetts, make the residency requirement subject to binding decisions by either the Joint Labor Management Committee or other entities, whereby an unaccountable arbitrator unfamiliar with the needs in a given municipality could unilaterally extend the residency limit beyond 10 miles, over the objections of the mayor, board of selectmen, manager or police chief. This would be a major infringement on management rights, and would raise serious public safety concerns in affected municipalities. Please reject section 37.
Reimbursements for School Aid Deductions for Charter School Tuition
The diversion of Chapter 70 school aid away from public schools to charter schools as tuition payments is a growing financial burden on local government as more charters are granted and existing schools expand. The Department of Elementary and Secondary Education (DESE) estimates that in fiscal 2014 it will require $103 million to fully fund the state’s obligation to cover a portion of the loss of Chapter 70 school aid as required in the 2010 education reform law reimbursement formula.
Overall, DESE expects that cities and towns will be required to divert $407 million of their Chapter 70 aid to fund charter schools in fiscal 2014, $53 million more than in fiscal 2013, which illustrates the importance of funding this account to ease the impact on local districts that educate the vast majority of students.
Currently, the appropriation [7061-9010] for fiscal 2013 totals $70 million. The Governor has submitted a fiscal 2013 supplemental budget bill with a request for an additional $8 million to fully fund the state’s obligation this year. For fiscal 2014, we support the Senate appropriation to provide $76 million, as it is the higher funding level, and thus falls short of full funding by a smaller margin.
McKinney-Vento Mandate Reimbursement
We support the Senate appropriation that would provide $7.4 million to pay for the unfunded state mandate to provide transportation services to homeless students to schools outside the local school district [7035-0005]. This is a very important account to the cities and towns across the state obligated to provide costly transportation services through the state’s acceptance of the federal McKinney-Vento grant. The Legislature fully funded the account at $11.3 million this year.
Transportation Reimbursements for Vocational Education
We support the $3 million appropriation [7035-0007] in the Senate budget bill to reimburse cities and towns for the cost of transporting students to out-of-district vocational education programs.
Shannon Anti-Gang Grants Program
We support the Senate appropriation that would increase funding for the Shannon Anti-Gang Grant Program [8100-0111] to $7 million. This program is crucial to assist those communities dealing with very challenging public safety and gang-related issues.
Student Transportation Reimbursements in Regional Districts
We support the Senate appropriation of $52 million to fund reimbursements [7035-0006] to school districts to help pay for a portion of the costs of transporting students. DESE estimates that it would require $78 million to cover the state’s full share of this program. The additional funding would help all cities and towns in regional school districts.
Payment-in-Lieu-of-Taxes for State-owned Land (PILOT)
We support the Senate appropriation that would provide $27.3 million in reimbursements due under the law to cities and towns that host and provide municipal services to state facilities [1233-2400]. PILOT payments are vitally important for those cities and towns that host state facilities, and the program has been underfunded for many years.
Medical Assistance Contribution
We ask you to support a technical change to the language of section 88 in the Senate bill in order to explicitly exempt governmental entities from making employer medical assistance contributions for purposes of unemployment insurance. Historically, the Commonwealth, municipalities, and other government entities have not been assessed this fee. We ask you to codify that practice in law by explicitly exempting governmental employers, and this clarification would avoid unintended confusion in the future, and make certain that cities and towns would not be subject to an unnecessary and costly mandate.
Paying for Emergency Medical Services.
We oppose section 92 of the Senate budget bill that would make a detrimental change to how cities and towns set fees for emergency medical services. There is no similar provision in the House bill. Cities and towns set fees and charges for a wide variety of municipal services strictly limited by state law to the cost of providing that service. This is the same rule that applies to local charges for emergency medical services and ensures that rates are reasonable, and prevents insurance companies from shifting costs to local property taxpayers through below-cost reimbursements. The Legislature approved legislation last session that clarified this authority, but the bill was vetoed by the Governor. We do not believe that allowing the Commissioner of Insurance to set local fees and charges through regulation is the appropriate course of action, as this would undermine a local process that is currently fair and working well across the Commonwealth, and could seriously disrupt municipal finances if the state bureaucracy sets rates that are inadequate. We fully agree with the Legislature that banning the so-called “pay the patient” process is an important step, and we look forward to continuing to work with the Legislature to find a reasonable and balanced solution that does not weaken municipal authority relative to adequate rate setting.
Updating the Bottle Bill
We support the Senate provision, added by amendment, which would update the Massachusetts Bottle Bill law and provide a new revenue source for the Community Preservation Trust Fund. The addition of bottled water, sports drinks, teas, and other “new age” beverages to the Bottle Bill would decrease the total volume of municipal solid waste that needs to be collected, saving disposal fees and landfill space. This much-needed update to the law would relieve a significant financial and environmental burden on cities and towns by reducing the volume of solid waste generated in Massachusetts.
Appellate Tax Board Efficiency
We oppose section 40 of the Senate bill, which would limit Appellate Tax Board membership solely to attorneys and designated members of the Appraisal Institute. There already exists a strong vetting process to assure that only qualified candidates serve, including the consideration of the Governor and the Governor’s Council, and this limitation decreases the pool from which candidates may be chosen.
We also oppose section 42 of the Senate bill, which would raise the threshold from $20,000 to $500,000 for a municipality to convert an informal case to a formal case before the Appellate Tax Board. This change would severely limit a municipality during the discovery and explanation stage of an appeals case.
Local officials deeply appreciate your strong and abiding dedication to a powerful state-local partnership that benefits all of the citizens of the Commonwealth, and we look forward to working with you in the days, months and years ahead.
If you have any questions or would like any additional information regarding the issues and requests that we have presented regarding the fiscal 2014 state budget, please do not hesitate to contact me or MMA Legislative Director John Robertson at (617) 426-7272 ext. 122 or This email address is being protected from spambots. You need JavaScript enabled to view it. at any time.
Thank you again for your leadership and very strong support for cities and towns.

Geoffrey C. Beckwith
Executive Director, MMA