FY27 budget local aid hearing set for March 23

The Joint Committee on Ways and Means has kicked off hearings on the fiscal 2027 state budget, with sessions scheduled in several locations on various portions of the budget.

An invite-only hearing focused on municipal and school aid will be held in Lawrence on March 23. The MMA will testify at the hearing to advocate for the following priority accounts:

UGGA
The MMA continues to advocate for a meaningful increase to Unrestricted General Government Aid, a foundational revenue source that supports police, fire, public works, public health, libraries, and other core municipal services.

The governor’s budget proposes a 2.5% increase over fiscal 2026. The MMA argues that this proposal does not keep up with rising costs in labor, health insurance, energy, infrastructure, and much more.

As the MMA outlined in “Navigating the Storm: Charting a Course Toward Fiscal Stability,” a targeted boost to UGGA in fiscal 2027 would help communities maintain staffing, avert service reductions, and preserve core operations, while providing critical local tax relief to residents.

Chapter 70
The governor’s budget would fully fund Chapter 70 according to the final year of the Student Opportunity Act funding schedule. The MMA supports this effort, while also advocating for sustaining a $150 per pupil minimum aid level in fiscal 2027 — double what the governor proposed in her budget plan (House 2). More than 85% of districts are expected to receive minimum aid in fiscal 2027.

The MMA will once again advocate for a higher minimum aid figure to ensure that all school districts have the critical resources needed to maintain educational services.

Special Education Circuit Breaker
The governor’s budget includes $652.7 million for the Special Education Circuit Breaker program, which provides reimbursements to districts for certain high-cost, out-of-district special education services and transportation. To complement this funding, and to meet the projected need for fiscal 2027, the governor proposes an additional $150 million via a separate “Fair Share” surtax surplus supplemental budget, which was filed alongside House 2.

The MMA will continue to prioritize full funding for Special Education Circuit Breaker reimbursements.

Charter schools
House 2 proposes to fund charter school mitigation payments at $200.4 million, a slight increase over the current year. The MMA will continue to advocate for addressing the financial strain that charter schools payments impose on public school districts.

Rural School Aid
The governor’s budget would boost Rural School Aid by $8 million, or 67%, over fiscal 2026, to $20 million. The proposal would expand eligibility to agricultural schools, independent vocational schools, charter schools, and collaboratives.

The MMA will continue to advocate to bring this account closer to the $60 million recommended by the Commission on the Fiscal Health of Rural School Districts in its 2022 report, “A Sustainable Future for Rural Schools.”

School transportation
House 2 would fund regional school transportation reimbursements at $112.3 million for fiscal 2027, a $6 million increase over fiscal 2026. The administration said this represents 87% of eligible local transportation costs.

House 2 includes $6.8 million for reimbursements for transportation of out-of-district vocational school students, which was funded at $1 million in fiscal 2026. The administration said this investment would fund 100% of expected costs.

Reimbursements for the transportation of homeless students under the federal McKinney-Vento Act would be funded at $35.2 million, a $6.5 million increase.

The MMA will advocate for fully funding school transportation accounts.

PILOT
The governor’s budget would fund payments-in-lieu-of-taxes for state-owned land at $55.4 million, an increase of 1.6% ($851,000) over fiscal 2026. This funding level is intended to hold communities harmless from updated valuation changes.

The MMA continues to advocate for increasing PILOT payments and looks forward to the report from the Governor’s Commission on PILOT for State-Owned Land, which is set to convene in the near future.

Outside sections — RMV and delinquent payments
House 2 includes several outside sections that would change the process by which cities and towns may collect outstanding excise taxes, parking ticket payments, and abandoned vehicle fines. The proposal would discontinue the current practice that flags delinquent accounts for non-renewal of associated driver’s licenses and vehicle registrations.

The MMA strongly opposes these sections and continues to voice concerns that ending a critical and effective policy that assists in the collection of needed municipal revenue is unwarranted. Many communities find the current process to be an essential tool to ensure timely payment of motor vehicle excise taxes and recoup delinquent revenues.

Budget process
Following the Joint Ways and Means Committee hearings, the House is expected to debate its own budget bill in April, with the Senate deliberating its bill in May.

The Legislature will work to get a final budget bill to the governor by the beginning of the fiscal year on July 1.