His Excellency Charles D. Baker
Governor of the Commonwealth
State House, Boston

Delivered Electronically

Dear Governor Baker,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association very much appreciates your unwavering support for local government. We look forward to working with you and the Legislature in developing a state spending plan for fiscal 2023 that provides cities and towns with the capacity to continue to provide essential services, while also responding to and recovering from the public health emergency.

With a tightly capped property tax that limits municipal revenues, cities and towns require predictable and adequate state revenue sharing in order to provide world-class municipal and education 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.

While cities and towns have welcomed much-needed federal relief funding to respond to and recover from the pandemic, municipal leaders recognize that this is one-time funding and can be used only in accordance with the federal guidelines. As such, it cannot be seen as an alternative to state funding and support for local aid and key operational programs.

We are writing today to follow up on our letter of January 3, 2022, specific to the Unrestricted General Government Aid account, this time focusing on a number of essential funding priorities and investments to incorporate into the fiscal 2023 state budget bill that you will file later this month.

Unrestricted General Government Aid
For a detailed review of MMA’s funding request for UGGA, please see our January 3, 2022, letter. A top-line summary is that the Commonwealth has collected near-record growth in tax receipts over the past two fiscal years, and the MMA is requesting a $270 million increase in Unrestricted General Government Aid (1233-2350) to bring the account up to $1.438 billion. The MMA and local officials across the state deeply appreciate that you and your Administration have committed to revenue sharing as a fundamental value in your financial planning and budgeting. Since you first took office in 2015, your state budget submissions have promised to equitably share state tax revenue growth with cities and towns by tying the percentage increase of Unrestricted General Government Aid to that of state revenue growth.

In fiscal years 2021 and 2022, state tax collections increased by an estimated $6.54 billion, growth of 22.1% over the amount collected in fiscal 2020. However, during this time UGGA has only received a 3.55% increase of $39.5 million. It’s understandable that the state’s financial windfall was difficult to predict in the early months of the pandemic, given all the uncertainty. However, this inequity must be addressed as a key budget priority in fiscal 2023. Otherwise, the state will not meet its revenue sharing commitment, and cities and towns will be permanently impaired by a far-too-low discretionary aid funding base. The result will be even greater reliance on capped property taxes, locking communities in a fiscal vise that will continually squeeze out funding for essential municipal and school services in the coming years.

Unrestricted General Government Aid funds deliver vital services at the local level and will help ensure that today’s municipal overreliance on the property tax will not deepen. We are thankful for your past support for a revenue sharing framework and urge you to consider our position in your fiscal 2023 budget submission.

Chapter 70 School Aid
We support funding for Chapter 70 school aid (7061-0008) that continues the promises made in the Student Opportunity Act. For fiscal 2023, we support funding Chapter 70 in accordance with the Student Opportunity Act’s original goal rates for this fiscal year, consistent with the funding framework that was enacted in this year’s fiscal 2022 budget. We also support funding that is sufficient to allow all municipal and regional school districts to reach their “foundation” spending standard and provide an adequate amount of minimum aid that ensures that all schools receive a meaningful increase in fiscal 2023, which we believe should be at least $100 per student. While the school aid calculation for next year is not yet known, it is very likely that many school districts will again receive only the minimum aid increase (at least $30 per student), which is simply not adequate to maintain quality school programs in these districts. Higher minimum aid is necessary to ensure that no school district or student is left behind.

Charter School Impact Mitigation Payments
As a start, we support funding the charter school impact mitigation account (7061-9010) to reimburse school districts at 90%, the rate set forth in year two of the Student Opportunity Act implementation schedule. Each impacted district should be reimbursed at 90% in accordance with the Student Opportunity Act.

The sharp increase in assessments levied on local school districts to pay tuition to charter schools has imposed a major financial burden on cities and towns, a problem made more acute as the state grants more charters and existing charter schools expand. Rising charter school assessments are forcing local public schools to cut programs and services to make up the difference.

Because the great majority of K-12 students attend local 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, many have been deemed by the state to have underperforming schools. These include some of the state’s poorest and most financially distressed cities and towns. Underfunding the charter school reimbursement formula has the unfortunate effect of harming the most vulnerable and challenged school districts.

In addition, even if fully funded, the charter school impact mitigation account is insufficient to address the deep cuts facing many districts. Even with mitigation payments, many communities and school districts may still see their charter assessments increase more than their total new Chapter 70 aid. For this reason, we ask that you implement a “circuit breaker” system to prevent any “net negative” situations, so that each community or school district receives a minimum aid increase, after charter payments, based on the number of students remaining in the traditional, non-charter, public school system.

Rural School Finance
We support an adequate appropriation to sustain the rural schools assistance program that was funded in the fiscal 2022 budget (7061-9813). The special financial and operational challenges facing rural districts were not addressed in the Student Opportunity Act, although a special commission was established to study the long-term fiscal health of rural districts. We support the work of the commission and an appropriation for the ongoing assistance program.

Special Education Circuit Breaker
We support full funding for the special education circuit breaker program (7061-0012), through which the state provides a measure of support for services provided to high-cost special education students. 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 ask for full funding of the state’s share of eligible educational costs with the schedule outlined in the Student Opportunity Act, including the addition of transportation expenses as an eligible cost.

Student Transportation Reimbursements
Funding to assist cities, towns and school districts with the cost of transporting school children is another critical priority.

Regional School Transportation – We support funding for transportation reimbursements to regional school districts (7035-0006). This account 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.

McKinney-Vento – The State Auditor has ruled that the McKinney-Vento program is an unfunded mandate on cities and towns. Under the program, municipalities and school districts 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 (7035-0008).

Out-of-District Transportation – We support funds to reimburse communities for a portion of the cost of transporting students to out-of-district placements in vocational schools (7035-0076), 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 2023 budget submission.

Payments in Lieu of Taxes (PILOT)
We support full funding of the Commonwealth’s obligations and commitments to the program for payments in lieu of taxes (PILOT) for state-owned land (1233-2400). 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.

For fiscal 2022, this account was funded at $35 million. A report completed by the State Auditor in December 2020 found that this account has not met the state’s obligation in 20 years, and that the funding for fiscal 2020 should have been $45 million. We support the Auditor’s recommendation to fully fund this account based on the aggregate tax method and ask that you include a “hold harmless” provision to protect municipalities with reduced land values and PILOT reimbursements. 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 (8100-0111) 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 House 2.

A Local Aid Resolution to Facilitate Timely Local Budget Decision-Making
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).

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.

This is a critical time for cities and towns, our residents, and our economy. You and Lieutenant Governor Polito have been outstanding partners for communities across the Commonwealth every single day of the past seven years, and we are deeply grateful for your leadership. We look forward to working with you during the next 12 months to ensure that every region of the state recovers from the hardships and challenges of the pandemic and has the resources and support to propel the Massachusetts economy forward. We believe the priorities outlined above will establish fiscal stability and sustainability at the local level, and ensure that the residents of Massachusetts receive the essential municipal and school services they expect and deserve.

We thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.


Geoffrey C. Beckwith
MMA Executive Director & CEO

The Honorable Karyn Polito, Lieutenant Governor of the Commonwealth
Secretary Michael J. Heffernan, Executive Office for Administration and Finance
Undersecretary Catharine Hornby, Executive Office for Administration and Finance
Senior Deputy Commissioner Sean Cronin, Division of Local Services