His Excellency Charles D. Baker
Governor of the Commonwealth
State House, Room 360
Boston, MA 02133

Dear Governor Baker,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association very much appreciates your deep and steady support for local government, and we send our congratulations as you celebrate the beginning of your second term as our Governor. We look forward to continuing our work with you and your Administration over the next four years to build on the success of your first term, and bring even greater stability and strength to municipal and state finances.

A strong and enduring partnership between cities and towns and state government is essential for a healthy and sustainable economy here in Massachusetts. With a tightly capped property tax that limits municipal revenues, cities and towns require predicable and adequate state revenue sharing in order to be able to provide world-class education and municipal services, ensure safe streets and neighborhoods, and maintain local roads and vital infrastructure. These services are fundamental to our state’s economic success and competitiveness.

We are writing today to provide you with information on important funding priorities and investments in key municipal and school aid programs to incorporate into the fiscal 2020 state budget bill that you will file later this month.

UNRESTRICTED GENERAL GOVERNMENT AID (UGGA)
We strongly support an increase in the Cherry Sheet Unrestricted General Government Aid (UGGA) account at least at the same rate that state tax collections for fiscal 2020 are forecast to grow through the state “consensus” revenue process, including distribution of the full municipal share of Lottery and other gaming revenue from Plainridge Park Casino, MGM Springfield that opened in August 2018 and Encore Boston Harbor that is slated to open this coming June. These facilities will generate revenues to support UGGA distributions.

Municipal aid was cut deeply during the Great Recession and earlier retrenchments, and this year remains over $200 million below the fiscal 2008 level of funding, without adjusting for inflation. With local aid levels reduced so deeply, local reliance on the property tax remains stubbornly high.

Linking UGGA funding to the growth in state tax revenues simply means that unrestricted aid would track the growth in the state’s revenue capacity, no more and no less, providing cities and towns with much-needed funds to deliver vital services that are critical to our overall economic growth, and ensuring that today’s municipal overreliance on the property tax will not deepen. We are thankful for your past support for this revenue sharing framework, and urge its full implementation in your fiscal 2020 budget submission.

CHAPTER 70 SCHOOL AID
There are three important elements to ensuring progress in funding Chapter 70 education aid: 1) adequate funding for the current Chapter 70 framework; 2) implementation of the Foundation Budget Review Commission’s recommendations to correct major outdated and obsolete aspects of the foundation budget itself; and 3) fixing the deeply flawed charter school finance system.

First, we strongly support a funding increase for Chapter 70 school aid that is sufficient to allow all municipal and regional school districts to reach the “foundation” level of spending, implement the target share equity provisions adopted in 2006, and provide an adequate amount of minimum aid that ensures that all schools receive a suitable and appropriate increase in fiscal 2020, which we believe should be at least $100 per student. Most school districts receive only received a minimum aid increase ($30 per student), which is why the minimum aid aspect of Chapter 70 is so important.

Second, we strongly support accelerated implementation of the recommendations of the Foundation Budget Review Commission to update the Chapter 70 “foundation budget” minimum spending standards for special education and health insurance costs for school employees, and to add to the spending standard a measure of recognition for the cost of services for low income, English Language Learner (ELL) and other students who would benefit from more intensive services.

We appreciate the actions last year to begin to increase the “benefits and fixed charges” rate in the “foundation budget” consistent with the Commission recommendation and to update the ELL standard. We urge that more be done in fiscal 2020 in these areas and in accounting for special education and other high-need students.

Third, the diversion of Chapter 70 school aid away from public schools to pay tuition to charter schools has imposed a major and growing financial burden on cities and towns, a problem made more acute as the state grants more charters and existing charter schools expand. Local officials strongly support legislation that would cap the assessment on local school districts and request full funding of the Commonwealth’s commitment under section 89 of Chapter 71 of the General Laws to reimburse school districts for the loss of a portion of their Chapter 70 aid that is redirected to fund charter schools.

Rising charter school assessments are forcing local public schools to cut programs and services to make up the difference. Because the vast majority of K-12 students attend regular public schools, this means that underfunding the charter school reimbursement program has a directly negative impact on the vast majority of schoolchildren. Of the cities and towns with the largest shortfalls, most of have been deemed by the state to have underperforming schools. These include some the state’s poorest and most financially distressed cities and towns. The underfunding of the charter school reimbursement formula has the unfortunate effect of harming the most vulnerable and challenged school districts, communities and students. No update of the Chapter 70 framework will be workable or complete without correcting the major flaws in charter school finance.

SPECIAL EDUCATION “CIRCUIT BREAKER”
We support full funding of the Special Education “Circuit Breaker” Program, through which the state provides a measure of support for services provided to high-cost special education students. Under section 5A of Chapter 71B of the General Laws, the state’s share is 75 percent of costs that exceed four times the state average per pupil foundation budget. This is an essential program that provides critical funding to assist all school districts with the increasingly burdensome and volatile cost of complex and expensive special education services.

We appreciate that the final fiscal 2019 general appropriations act fully funded this commitment to municipalities. We respectfully ask that your fiscal 2020 budget submission reflect the estimated cost of fully funding the Circuit Breaker program in the coming year.

STUDENT TRANSPORTATION REIMBURSEMENTS
Funding to assist cities, towns and school districts with the cost of transporting schoolchildren is another critical priority. There are four aspects to this important budget priority: 1) reimbursements to regional districts; 2) the transportation of homeless students under the McKinney-Vento program; 3) transporting out-of-district vocational students; and 4) renewed reimbursements to regular (non-regional) school districts.

1) Funding for transportation reimbursements to regional school districts is vital to all regional districts and their member cities and towns, particularly in sparsely populated parts of the state. We respectfully ask that you support increasing this key account to reflect higher transportation costs for communities and to move the state closer to its full reimbursement commitment.

2) The State Auditor has ruled that the McKinney-Vento program is an unfunded mandate on cities and towns. Under the program, communities are providing very costly transportation services to bus homeless students to schools outside of the local school district. We respectfully ask that your budget submission fully fund this state mandate.

3) The fiscal 2019 state budget includes funds to reimburse communities for a portion of the cost of transporting students to out-of-district placements in vocational schools, as mandated by state law. This account recognizes the significant expense of providing transportation services for out-of-district placements, as these students must travel long distances to participate in vocational programs that are not offered locally. We respectfully ask that you fully fund this account in your fiscal 2020 budget submission.

4) Finally, we support a renewed reimbursement program for non-regional school districts to help fund a portion of the burden of student transportation costs. The program was removed from the state budget during a time of economic distress. Restoring funding would benefit school districts in every corner of the state, and would provide important relief that would allow communities to use more of their Chapter 70 aid and local property tax dollars in the classroom.

PAYMENTS IN LIEU OF TAXES
We support full funding of the Commonwealth’s obligations and commitments to the program for payments in lieu of taxes for state-owned land (PILOT). This is a particularly important program for the cities and towns that host and provide municipal services to state facilities that are exempt from the local property tax.

SHANNON ANTI-GANG GRANT PROGRAM
We support continued funding for the Shannon anti-gang grant program that has helped cities and towns respond to and suppress gang-related activities. We respectfully ask that you maintain funding for this important crime prevention program in H. 1.

A LOCAL AID RESOLUTION TO FACILITATE TIMELY BUDGET DECISIONS AT THE LOCAL LEVEL
Cities, towns and regional school districts need timely notice of the main municipal and school aid accounts in order to prepare and approve forward-looking local revenue and spending plans. We ask that state leaders secure an early agreement on our requested Unrestricted General Government Aid (UGGA) amount for next year, and also agree on a methodology for calculating Chapter 70 local contribution and school aid levels (including the MMA’s Chapter 70 funding recommendations for $100 per-student in minimum aid and phasing in the Foundation Budget Review Commission framework).

An agreement would set the stage for a consensus Local Aid Resolution and a commitment to minimum municipal and school aid amounts during March. This would avoid the very difficult budget challenges that occur for regional school districts and member cities and towns when required local contributions are not finalized until mid-July.

SUMMARY
This is a critical time for cities, towns and local taxpayers. We know that you and Lt. Governor Karyn Polito are outstanding partners for communities across the Commonwealth, and we look forward to working with you to make real progress over the coming years. Massachusetts is starting to find some new vigor in its economy, but it is clear that the Massachusetts economy will only reach its full potential for statewide growth and job creation if all 351 cities and towns have the resources to adequately serve the residents and businesses of the Commonwealth.

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 Karyn Polito, Lieutenant Governor of the Commonwealth
Secretary Michael J. Heffernan, Executive Office for Administration and Finance