House budget invests in cities, towns; local leaders look to Senate to follow suit

From The Beacon, May 2012

Municipal leaders across Massachusetts are once again indebted to Speaker Robert DeLeo, House budget committee Chair Brian Dempsey, Vice Chair Steve Kulik, and Assistant Vice Chair Marty Walz, and all members of the House of Representatives for adopting an outstanding fiscal 2013 state budget that embraces and invests in cities and towns as a top priority.

The House budget, adopted on April 25, funds the Unrestricted General Government Aid account at $899 million, increasing the base appropriation on the Cherry Sheet by $65 million. In January, the governor proposed level-funding UGGA at $834 million, and tentatively providing a later supplemental distribution of $65 million in October if the state ends fiscal 2012 with a surplus. But with fiscal 2012 state revenues coming in below expectations, the $65 million would not be guaranteed under the governor’s plan, and communities wouldn’t have any idea how much aid, if any, would result in October, making it impossible to include the funds in fiscal 2013 operating budgets. The House budget would solve this problem by adding the $65 million to the base so that cities and towns can make full use of the funds for ongoing operations and essential services in their fiscal 2013 budgets.

After a municipal aid reduction of nearly $500 million since fiscal 2009, this increase is vitally needed to allow cities and towns to maintain municipal services and avoid higher reliance on the property tax.

It’s also important to note that House lawmakers know that projected state Lottery revenues for fiscal 2012, and therefore for 2013 as well, are rising rapidly, and that the base amount of unrestricted municipal aid must increase to guarantee that cities and towns receive every penny of their Lottery dollars, as intended in state law. Lottery proceeds are now expected to exceed the $834 million aid amount originally proposed in the administration’s January budget proposal. This new information underscores the need to increase the guaranteed local aid distribution up to $899 million – otherwise millions of dollars of Lottery proceeds would be diverted to the state’s general fund instead of flowing directly to cities and towns, where they belong.

As budget action turns to the Senate, funding for unrestricted municipal aid will be the top priority for every city and town, and local leaders are looking to their senators to match the House by adopting a budget that includes the full $65 million in the up-front base local aid distribution, guaranteeing the full $899 million before the beginning of the new fiscal year. We know the Senate would not want to divert Lottery funds away from cities and towns, and we know that Senate lawmakers are aware that delaying the $65 million to the fall would make it impossible for municipalities to include the funds in their fiscal 2013 operating budgets to finance ongoing services.

Senators will be acting on these issues early this month, and this will be an important time for local officials to discuss the state budget and local aid. Time is of the essence, as the traditional Senate budget calendar indicates that the Senate will complete action on its version of the budget during the week of May 21.

In other budget news that Senators will be asked to embrace, city and town leaders also applaud the House’s action to invest in several key local aid accounts: by adding an additional $18.5 million to Chapter 70 school aid to ensure that all districts receive an increase of at least $40 per student next year; by adding $8.4 million to the special education “circuit beaker” account; by fully funding the $11.3 million mandate for homeless student transportation costs triggered by state acceptance of the federal McKinney-Vento Act; and by adding $2 million to regional school transportation reimbursements. Overall, the House increases municipal and school aid by approximately $105 million above the governor’s budget proposal, a remarkable achievement in tight fiscal times.

The good news continues. House members unanimously adopted an amendment filed by Rep. Kulik and House Minority Leader Brad Jones that would expand the Community Preservation Act and supplement its funding with an annual transfer of up to $25 million from any end-of-year state budget surplus.

In addition, the House defeated several amendments that would have earmarked UGGA funds to pay the state’s 50 percent share of the Police Incentive Pay Program. Under these deeply flawed amendments, the state’s Quinn Bill share would be paid with existing local aid, which would then force every participating city and town to appropriate a matching amount from local property taxes, completely undermining the recent Supreme Judicial Court decision that determined that cities and towns do not have to make up or match the state share unless a local contract requires them to do so. The amendments would have effectively imposed a completely unaffordable $50 million unfunded mandate on cities and towns.

The bottom line is that the House of Representatives has made a powerful statement about the importance of cities and towns to our state’s economic recovery. House lawmakers have passed a budget that actively invests in local aid to strengthen communities and actively rejects proposals to weaken municipal finances.

This state-local fiscal partnership is essential for the future of Massachusetts, and local leaders now turn to the Senate, confident that the next step in the budget process will maintain and build on that partnership.