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Our members are the local governments of Massachusetts and their elected and appointed leadership.
The Senate’s budget-writing committee today released a $61.3 billion state spending plan for fiscal 2026 that includes several important investments in schools and municipalities.
The proposal released by the Senate Ways and Means Committee (S. 3) would increase Unrestricted General Government Aid by 2.2% over the current fiscal year and boost Chapter 70 minimum new aid from $30 per pupil to $150.
“Local leaders throughout the Commonwealth deeply appreciate the investments in the Senate Ways and Means Committee budget proposal, which supports essential local services, schools, and a strong state-local partnership,” said MMA Executive Director Adam Chapdelaine. “The Senate’s proposed increase in UGGA is critical for municipalities to provide essential services to residents. Additionally, we’re grateful to see the Senate also include investments through the Student Opportunity Act and a minimum aid figure of $150 per pupil. All of this support will make a meaningful difference for our cities and towns.”
The Division of Local Services has updated Preliminary Cherry Sheets to reflect the Senate Ways and Means proposal.
The following are key components of the Senate bill for cities and towns:
UGGA
The Senate bill would increase the Unrestricted General Government Aid account by $28.8 million. This figure matches what the governor proposed in her budget bill and ties the growth in UGGA to the consensus state revenue forecast of 2.2%. UGGA helps cities and towns deliver vital services, and the proposed increase would ensure that the municipal overreliance on the property tax does not deepen.
Chapter 70
The Senate bill would continue implementation of the funding schedules in the 2019 Student Opportunity Act to stay on schedule.
The bill would leverage Fair Share surtax revenues in order to increase minimum new aid to $150 per student, which would benefit 77% of school districts (245 out of 318) that were set to receive a smaller increase for fiscal 2026. This funding level matches the amount in the budget bill passed by the House on April 30.
Charter schools
The Senate bill would fund the charter school reimbursement account at $183.8 million, intended to meet the commitment to fund the state’s statutory obligation to mitigate Chapter 70 losses to charter schools.
Rural School Aid
The Senate bill would fund Rural School Aid at $16 million for eligible towns and regional school districts. The grant program helps districts facing the challenge of declining enrollment to identify ways to form regional school districts or regionalize certain school services to create efficiencies.
Special Education Circuit Breaker
The Senate’s state budget bill would fund the Special Education Circuit Breaker program at $492 million, with the Senate expected to finalize a fiscal 2025 supplemental budget bill that includes another $190 million for this account. Once the Senate’s proposal is reconciled with the House’s, it is expected that the Legislature’s final bills would meet the state’s obligation for this account in fiscal 2026.
Regional school transportation
The Senate bill would fund regional school transportation reimbursements at $103.7 million for fiscal 2026. According to updated cost projections from the Department of Elementary and Secondary Education, this represents a roughly 84% reimbursement of anticipated claims.
McKinney-Vento
The Senate bill would fund reimbursements for the transportation of homeless students at $28.6 million for fiscal 2026. The impact of this funding level on a particular community would depend on the number of homeless families that remain sheltered in local hotels and motels.
Vocational transportation
The Senate bill would level-fund reimbursements for out-of-district vocational school transportation at $1 million.
PILOT
The Senate bill would fund payments-in-lieu-of-taxes at $54.5 million, an increase of $1.5 million. This amount is expected to hold communities harmless from recent valuations.
Surtax investments
Fiscal 2026 is the third year for allocating revenue from the Fair Share surtax on annual incomes over $1 million. The Senate bill would use $1.95 billion to invest in education and transportation needs, including the following:
• Transportation Fund investment: $600 million for the Commonwealth Transportation Fund, which is a key component of the governor’s $8 billion, multi-year transportation plan. This infusion of funding would provide significant capacity to increase the Commonwealth’s bond cap, leading to future investments in transportation priorities, including in local roads, bridges and culverts. An expansion of the Commonwealth’s bonding capacity would enhance the prospects of a transportation bond bill — which includes Chapter 90 funding — that’s currently in the Joint Committee on Transportation.
The Senate also included $190 million in surtax investments for local roads, bridges and culverts in a supplemental budget bill that it is expected to pass later this week.
• Student Opportunity Act expansion: $240 million to raise minimum aid to $150 per pupil in fiscal 2026, on top of the $104 per pupil increase for fiscal 2025.
• Universal School Meals: $170 million to continue the Universal School Meals program, which allows all Massachusetts students to eat for free at school, regardless of household income.
Outside sections
The Senate bill includes outside sections addressing the following:
UGGA Distribution Special Commission
The Senate bill would establish a special commission to examine the distribution method for Unrestricted General Government Aid to municipalities — work that would have a direct impact on cities and towns. The panel would make recommendations to maximize equity in UGGA distributions for communities.
Housing production dashboard
The Senate bill would have the Executive Office of Administration and Finance establish a housing production dashboard to provide information about state loans, grants, project-based vouchers and tax credits for the purpose of housing production or preservation.
Next steps
Members of the Senate have until 2 p.m. on Friday to file proposed budget amendments, and the Senate is expected to begin its budget debate on May 20.
The MMA will continue to reach out in the weeks ahead to members for important and timely advocacy opportunities on behalf of critical municipal and school aid programs.