From the Beacon, April 2024

It’s April in Massachusetts, and as the weather begins to turn the corner (we hope), so does the pace of state budget writing on Beacon Hill.

The governor delivered her budget proposal in January, and the House this month will finalize its plan. The Senate will follow in May, leading to a reconciled budget signed by the governor for the start of the fiscal year in July.

Fiscal 2025 is shaping up to be a challenging budget year for the Commonwealth, straining the state’s ability to fund myriad programs, including the many local priorities for which the MMA advocates. As you also know all too well, fiscal 2025 will be even more austere at the local level, due to rising costs in a multitude of budget categories. To make matters more difficult, you are facing this while needing to balance your budgets within the strict confines of Proposition 2½. It’s for these reasons that the MMA is strongly advocating for responsible but significant investments from the state in the local aid accounts that are essential to you, your communities, and the quality of life for all of us in Massachusetts.

On March 1, the MMA provided testimony on fiscal 2025 municipal priorities, and an MMA panel testified before the Joint Committee on Ways and Means at a hearing on education and local aid issues. Now, we need your help in advocating for this critical funding.

As I have said many times since starting in my role at the MMA, the power of the MMA is rooted in its members. Now is the time for us to turn that collective power into collective action. As you do each year, we need you to reach out to your legislators to underscore the importance of maintaining and improving investments in local government, even as the state faces challenging budgetary headwinds. We will continue our dedicated work on Beacon Hill throughout this budget process, but you have the ability to bring tangible examples of what is at stake. As a guide, please use our key priorities reflected in our budget testimony and MMA Legislative Alerts sent out in March.

We want you to tell legislators what is important to your community and the impact state investments would have in municipal operations and the services your residents depend on. Here are three key examples:

Unrestricted General Government Aid (UGGA)
There are two areas related to UGGA that we need to underscore for the Legislature.

First, increasing this account by a minimum of 3% is key to maintaining the state’s commitment to a strong state-local partnership. The governor proposed a 3% increase, which is higher than the consensus revenue growth figure of 2%. This builds on the recent success to fund UGGA above modest consensus revenue projections. Over the past two years, the Legislature recognized the fiscal challenges at the local level by providing double the consensus revenue figure. When talking with legislators about UGGA, this is where your on-the-ground stories can be most helpful. These are all line items across a wide landscape of priorities, but you can underline its impact and importance to balance local budgets and protect essential services.

Second, there is a proposal to establish an online Lottery platform (iLottery). While we appreciate efforts to modernize Lottery offerings, proceeds from an iLottery must not undercut the traditional Lottery proceeds, which directly supports the Commonwealth’s commitment to cities and towns through UGGA.

The mission of the Lottery for more than 50 years has been to support cities and towns, which is why we have been forcefully advocating that any iLottery proceeds be earmarked for local aid. We ask that you join us in making this case.

Chapter 70 school aid
We support funding the Student Opportunity Act on schedule, which would increase the Chapter 70 account by $263 million, but we’re concerned that two-thirds of school districts (211 of 318) would remain “minimum aid” districts and would receive new aid of only $30 per student. That’s why we’re advocating that minimum aid be at least $100 per student in fiscal 2025. Bringing all districts up to the $100 per student threshold would require an additional $35.4 million from the state budget, but would make a lasting positive impact in the lives of students in Massachusetts.

Another aspect of Chapter 70 that calls for attention is the very high increase in mandated local contributions in the foundation budget formula. In cities and towns across Massachusetts, the increase in local contribution required by Chapter 70 is far above the growth in municipal revenues. The result puts a major strain on municipal budgets.

Without addressing this aspect of the Student Opportunity Act funding challenge, districts with required increases in local contributions that exceed the percentage growth in their own local revenues could be forced to cut funding for essential municipal services, a harmful zero-sum process that would weaken their capacity to deliver critical non-school services to students and families outside the classroom.

One solution would be to limit the growth in required contributions to a community’s municipal revenue growth rate. Another would be to provide “pothole” funding to prevent painful cuts in essential non-school programs.

Surtax funding for local roads and bridges
Last year, the Legislature importantly provided $100 million from “Fair Share” surtax revenue for desperately needed investments in local roads and bridges.

There are more than 30,000 miles of roads under municipal control, representing nearly 90% of all road miles statewide. The governor’s budget proposes a continuation of surtax investments, recommending $124 million for local roads and bridges, including $24 million dedicated to rural communities. Based on the MMA’s latest survey, cities and towns needed approximately $715 million in fiscal 2024 alone to ensure that local roads and bridges are maintained in a state of good repair. So this supplemental funding through surtax revenue can be put to good use.

Given the loss of purchasing power of existing sources of funding and other local budget pressures, we are seeking $150 million for this incredibly important funding for fiscal 2025. This is another area where your community’s experience can be helpful. Sharing information with your legislator about the roadways, sidewalks and bridges that you can repair with this funding can make this request more tangible.

Despite the challenges, I am confident that together we can make important progress in fiscal 2025. Here at the MMA, we are grateful for your support, guidance and partnership in this essential work.

Written by Adam Chapdelaine, MMA Executive Director & CEO