MMA urges governor to support key municipal investments in FY24 state budget

Her Excellency Maura Healey
Governor of the Commonwealth
State House, Boston

Delivered Electronically

Dear Governor Healey,

On behalf of the cities and towns of the Commonwealth, we are writing with comments on H. 4040, the fiscal year 2024 state budget on your desk for review and approval. The investments in cities and towns in this budget bill reflect a strong partnership with local government, as municipal and state leaders work together to deliver essential services to residents of the Commonwealth. Municipalities are deeply grateful for your leadership and partnership, as your budget proposal in March set the tone for a process that has prioritized key investments in local and school aid accounts. As you review the conference report enacted by the Legislature, we respectfully ask that you support the important investments in cities and towns highlighted in this letter.

Unrestricted General Government Aid (UGGA)
H. 4040 includes $1.27 billion for Unrestricted General Government Aid (line item 1233-2350 and Section 3), an increase of $39.3 million, or 3.2%, over the fiscal 2023 level of funding. With property taxes tightly capped by Proposition 2½, cities and towns rely on state revenue sharing to provide municipal and school services, ensure safe streets and neighborhoods, and maintain vital infrastructure. These services are fundamental to our state’s economic success and competitiveness. We respectfully ask you to support the UGGA funding level included in H. 4040. This is a top priority for municipalities throughout the state, as these funds will be devoted to balancing local budgets and maintaining the local programs and services that residents rely on every day.

Chapter 70
H. 4040 would fund Chapter 70 aid at $6.58 billion, with an additional supplemental appropriation of $7.8 million to address additional per-student support for minimum aid districts (items 7061-0008 and 7061-0009, respectively). This reflects an impressive commitment to fund the Student Opportunity Act (SOA) according to the original intended schedule. In addition to keeping the commitment to fund the SOA, and in recognition of the challenges facing 119 “minimum aid” districts that would have received only a $30 per student increase over the previous year, item 7061-0009 doubles the minimum aid increase to $60 per student. We respectfully ask you to support these critically needed appropriation levels for school districts across the Commonwealth.

Special Education Circuit Breaker
We strongly support the $504 million included in H. 4040 for Special Education Circuit Breaker (7061-0012), which reimburses school districts for the high cost of educating students with disabilities. We respectfully urge you to support the funding level in H. 4040, and we deeply appreciate your commitment to further address extraordinary special education costs that communities are facing due to the 14% OSD rate hike in the fiscal 2023 supplemental budget proposal you filed in March.

Charter School Mitigation Payments
We strongly support the $232 million in H. 4040 for charter school mitigation payments (7061-9010), which fully funds the state’s statutory obligation for charter school mitigation payments as outlined in the Student Opportunity Act.

School Transportation
H. 4040 level funds regional school transportation (7035-0006) at $97 million, representing a reimbursement rate of 90% of DESE’s estimated costs for fiscal 2024. H. 4040 fully funds the McKinney-Vento account for transportation of homeless students (7035-0008) at $28.6 million, and funds out-of-district vocational transportation (7035-0007) at $1 million, a reimbursement of 17% of DESE’s estimated costs. While the regional school transportation and out-of-district vocational transportation accounts do not meet the required funding according to DESE, we ask you to support the appropriations that are currently before you in H. 4040. In addition, we are grateful for the importance you placed on these three accounts in your budget proposal and respectfully ask you to include full funding for these accounts in fiscal 2025.

PILOT Funding
We strongly support the increased funding for Payments-in-Lieu-of-Taxes (PILOT) for state-owned land included in H. 4040 (1233-2400), bringing the line item to $51.5 million. This has been a key priority for many years and this amount holds communities harmless from recent property valuation changes.

Rural School Aid
We urge you to support funding Rural School Aid (7061-9813) at $15 million in H. 4040, providing rural school assistance to eligible towns and regional school districts. These grants will help schools facing the challenge of declining enrollment identify ways to form regional school districts or regionalize certain school services to create efficiencies. We respectfully ask you to support the $15 million amount, which is meaningful progress toward the goal set forth in the Commission on the Fiscal Health of Rural School Districts report, “A Sustainable Future for Rural Schools,” released in July 2022.

Surtax Revenue
The voter-approved surtax offers exciting opportunities for dedicated funding to support the significant education and transportation needs of the Commonwealth in fiscal 2024 and beyond. We are grateful for the inclusion of several programs in H. 4040 that would directly benefit municipalities and the residents they serve. To that end, we respectfully ask you to support several surtax investments outlined in the conference report:

• $100 Million for Local Roads and Bridges
H. 4040 includes $100 million in supplemental aid supporting the construction and maintenance of municipal roadways, including at least half of the funding distributed based on each municipality’s total share of road mileage (1596-2428). There are more than 30,000 miles of roads under municipal control, which represents nearly 90% of all road miles statewide. This funding is urgently needed, and would be put to use immediately by cities and towns to repair crumbling local roads, advance critically needed projects, and improve safety on our neighborhood roadways.

• $50 Million for Green School Works
H. 4040 includes $50 million (1596-2424) for a new Green School Works grant program administered through DESE to provide financial support to K-12 districts to install or maintain clean energy infrastructure. The Green School Works program would further invest in our schools while helping to support local climate action and promote energy efficiency.

• $100 Million for MSBA School Project Extraordinary Costs
H. 4040 includes $100 million in supplemental grants (1596-2431) for school construction projects already approved for financing by the Massachusetts School Building Authority. This funding would address significant and unanticipated cost escalations that have impacted previously-approved MSBA projects.

• $172 Million for Universal School Meals
H. 4040 includes $69 million of surtax funding (1596-2422) to help codify the universal school meals program, allowing all Massachusetts students to eat for free at school, regardless of household income. The funding through items 1596-2422 and 7053-1925 would provide a total of $172 million for this important policy development. Massachusetts has done tremendous work to extend this pandemic-related school lunch program, and we strongly support this natural next step to make this program a permanent fixture across school districts in the Commonwealth.

Section 87 – MassHealth Crossover Payments
We support Section 87 in H. 4040, which would provide important financial relief for emergency medical service providers for the transport of patients who are eligible for both Medicare and MassHealth. This section provides “MassHealth crossover” reimbursements for dual-eligible transports, which would provide additional assistance to EMS providers to support ongoing efforts to recruit and retain staff. The MMA has been proud to partner with the Fire Chiefs of Massachusetts, Professional Fire Fighters of Massachusetts, and the Massachusetts Ambulance Association in support of this provision in H. 4040. For these reasons, we respectfully urge you to support this outside section.

Summary
This is a critical time for cities and towns, as inflationary pressures and the constraints of Proposition 2½ have squeezed local operating budgets and impacted key municipal and school services. We look forward to working with you to ensure that every region of the state continues to recover from the hardships and challenges of the pandemic and has the resources and support to propel the Massachusetts economy forward. We believe the priorities outlined above will establish fiscal stability and sustainability at the local level, and ensure that the residents of Massachusetts receive the essential municipal and school services they expect and deserve.

If you have any questions or need additional information regarding any of the municipal priorities highlighted above, please do not hesitate to have your office contact MMA Deputy Legislative Director Jackie Lavender Bird at 617-426-7272, ext. 123, or jlavenderbird@mma.org at any time.

We thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO

cc: The Honorable Kimberley Driscoll, Lieutenant Governor of the Commonwealth
Secretary Matthew Gorzkowicz , Executive Office of Administration and Finance
Senior Deputy Commissioner Sean Cronin, Division of Local Services