Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
The Honorable Aaron M. Michlewitz
The Honorable Michael J. Rodrigues
The Honorable Ann-Margaret Ferrante
The Honorable Cindy F. Friedman
The Honorable Todd M. Smola
The Honorable Patrick M. O’Connor
State House, Boston
Delivered electronically
Dear Chair Michlewitz, Chair Rodrigues, and Distinguished Members of the Fiscal 2025 State Budget Conference Committee,
On behalf of cities and towns across the Commonwealth, we are writing to express our deep appreciation for the many provisions in the fiscal 2025 budget bills approved by the House (H. 4601) and the Senate (S. 2800) that benefit communities throughout Massachusetts. Both bills reflect a dedicated commitment to the Commonwealth’s 351 cities and towns.
We thank the House and Senate for advancing a state budget framework that continues to value a strong state-local government partnership through the support of several key local aid accounts. While there are a number of areas where the House and Senate agree on funding levels for municipal and school aid accounts, there are several areas where the two branches will have to resolve differences. In this letter, we offer municipal government’s position on important funding and policy proposals that would impact communities, and we respectfully ask for your favorable consideration on these matters.
As you know well, municipalities across the Commonwealth are facing very tight operating budgets for fiscal 2025. Property taxes, the primary source of municipal revenue, are capped at below-inflation levels by Proposition 2½, and local receipts remain flat. Mandated increases in costs, including contractual obligations, health insurance, required local contributions under the Chapter 70 aid formula, and school transportation costs, are all outpacing municipal revenues. As a result, the Legislature’s continued leadership in funding key municipal and education aid accounts, as well as infrastructure investments, is vitally important and deeply appreciated.
We ask you to please invest in essential municipal and school aid programs, and to adopt provisions that will support critical services provided to residents by cities all across Massachusetts.
Appropriations
Unrestricted General Government Aid (UGGA)
The Senate appropriated $1.3 billion for the Unrestricted General Government Aid (UGGA) account (1233-2350 and section 3), an increase of $38.1 million, or 3%, over the fiscal 2024 level of funding. With property taxes tightly capped by Proposition 2½, cities and towns rely on adequate state revenue sharing to provide municipal and school services, ensure safe streets and neighborhoods, and maintain vital infrastructure. Unrestricted General Government Aid is the program that cities and towns receive to fund these essential municipal services. We respectfully ask the Conference Committee to include the full UGGA amount voted by the Senate. This is a very high priority for municipalities throughout the state, as these funds will all be devoted to balancing local budgets and maintaining the local programs and services that residents rely on every day.
Chapter 70 School Aid
We greatly appreciate the support from both the House and Senate to fund Chapter 70 School Aid to keep the Student Opportunity Act following the original intended schedule. In addition, both chambers recognized the significant challenges facing 211 “minimum aid” districts that would only receive an increase of $30 per student over the previous year under House 2. We applaud the House and Senate for significantly increasing minimum aid in each budget proposal, providing at least $104 per student. We are grateful for both chambers in answering this call for action to address the significant needs in every single school district in the Commonwealth. As you work to reconcile a final conference report, we strongly support the Senate’s proposal of a $110 per pupil increase over the current fiscal year for minimum aid. This $40 million investment will provide major relief to 230 school districts, bringing the total account to $6.9 billion.
Special Education Circuit Breaker
We support the appropriation for Special Education Circuit Breaker (7061-0012) in H.4601 and S. 2800 of $492 million, which would reimburse school districts for the high cost of educating students with learning disabilities. We appreciate the additional $75 million of special education funding included in the fiscal year 2023 closeout supplemental budget that will be leveraged to meet the state’s anticipated costs as calculated by the Department of Elementary and Secondary Education. We applaud both the House and Senate for fully funding the state’s commitment to the circuit breaker program as envisioned in the Student Opportunity Act. As special education needs continue to remain high in this post-pandemic environment, we urge the Legislature to continue to work with municipalities and school districts to support students’ ongoing and complex needs.
Charter School Mitigation Payments
We support the appropriation in the charter school impact mitigation account (7061-9010) of $199 million for charter school mitigation payments. Both bills would fully fund the state’s statutory obligation for charter school mitigation payments as outlined in the Student Opportunity Act. We thank the House and Senate for fully funding the state’s obligation.
Rural School Aid
We support the appropriation of $17.5 million in S. 2800 for Rural School Aid (7061-9813), an increase of $2.5 million over the current fiscal year, providing rural school assistance to eligible towns and regional school districts. These grants will help schools facing the challenge of declining enrollment to identify efficiencies in school services or opportunities for regional collaboration. We respectfully ask the Conference Committee to support the $17.5 million included in S. 2800, which is meaningful progress toward the goal set forth in the Commission on the Fiscal Health of Rural School Districts report, “A Sustainable Future for Rural Schools,” released in July 2022.
Regional School District Student Transportation
We support the appropriation of $99.4 million for Regional School District Transportation (7035-0006) in both H.4601 and S.2800, which represents an approximately 84% reimbursement rate according to DESE’s full funding estimate of fiscal 2025 claims. This account is vital to all regional districts and their member cities and towns, particularly in sparsely populated parts of the state.
Out-of-District Vocational Student Transportation
We support the Senate’s appropriation of $1 million for reimbursements due under statute for part of the cost of transporting students to out-of-district vocational education placements (7035-0007). Chapter 74 of the General Laws requires the state to reimburse cities and towns for the cost of transporting students to out-of-district vocational education programs. This reimbursement program 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 might not be locally available. We respectfully ask the Conference Committee to support the amount included in S. 2800, which level-funds this account and reflects a 17% reimbursement rate of estimated claims.
McKinney-Vento Homeless Student Transportation
We support the appropriation in both the House and Senate for including $28.6 million to provide school transportation for homeless students (7035-0008). The amount of $28.6 million reflects 70% of DESE’s anticipated claims for fiscal 2025.
In light of major cost increases in providing all types of school transportation, we respectfully request the Legislature’s consideration of future supplemental funding during the upcoming fiscal year to address these needs.
Payments in Lieu of Taxes on State-owned Land
We support the appropriation of $53 million included in the Senate bill to pay a portion of the payment-in-lieu-of taxes (PILOT) amount to cities and towns with state-owned land (1233-2800). This amount represents an increase of $1.5 million over the current fiscal year. We applaud the Legislature’s efforts to make significant investments in recent years to this key account.
Surtax Revenue Programs
The second year of voter-approved surtax offers exciting and unique opportunities for funding education and transportation programs in fiscal 2025. The investments made in the fiscal 2024 budget were deeply appreciated by municipal officials. We are grateful to both the House and Senate for their thoughtful inclusion of programs that would directly benefit municipalities and their residents. To that end, we respectfully ask the Conference Committee to include several surtax investments provided by the House and Senate proposals:
• $125 million for local roads and bridges: We deeply appreciate the House and Senate both proposing supplemental funding for local roads and bridges via surtax revenue. We urge you to support the $125 million included in S. 2800 to support the construction and maintenance of municipal roadways (1596-2428). There are more than 30,000 miles of roads under municipal control, which represents nearly 90% of all road miles statewide. This funding would importantly aid communities to quickly address immediate safety needs on local roadways.
• $15 million for local bridges and culverts: We urge you to support the $15 million included in S. 2800 to fund a local bridges and culverts program (1596-2503). Funding would be used to upgrade municipally owned small bridges and culverts in order to protect public safety, improve climate change resiliency, and restore ecosystem connectivity.
• $10 million for Green School Works: We urge you to support $10 million included in H. 4601 for the Green School Works grant (1596-2424), launched in fiscal 2024 to provide financial support to public school districts to install or maintain clean energy infrastructure.
• $190 million for Universal School Meals: We know Universal School Meals have been a priority of the Legislature through the past few years, which allows all Massachusetts students to eat for free at school, regardless of household income. The state has done tremendous work to extend this pandemic-related school lunch program, and the natural next step is to make this program a permanent fixture across school districts in the Commonwealth. We strongly support the $190 million included in H. 4601 (1596-2422) to support this essential program.
Outside Sections
Disaster Relief and Resiliency Fund
We support Section 2GGGGGG in H. 4601 which would establish a permanent Disaster Relief and Resiliency Fund to provide relief to municipalities impacted by extreme weather events. We also support Section 92 in H. 4601 which would direct the state’s comptroller to transfer $14 million from any consolidated net budget surplus for fiscal 2025 to the Disaster Relief and Resiliency Fund. Creating and capitalizing this fund would make important progress in having a rapid-response effort for cities and towns in the Commonwealth as they experience damage or incur emergency response costs from extreme weather.
Chapter 70 Task Force
We support Section 172 in S. 2800, which would create a Chapter 70 Task Force. In recognition of local school funding challenges, the Senate budget would create a Chapter 70 Task Force to study and make recommendations on various aspects of the Chapter 70 formula, including issues related to required local contribution calculations, impacts on minimum aid districts, and issues of low and declining student enrollment.
MSBA Special Commission
We support Section 143 in S. 2800, which would establish a special commission tasked with studying and making recommendations regarding the Massachusetts School Building Authority’s capacity to meet the needs of current and future school facility projects.
Tax Title
As you know well, cities and towns critically depend on property taxes in order to provide essential local services. We have been partnering with the Legislature to find a legislative solution to this issue that clarifies tax title foreclosure practices under state law and aligns with the recent Supreme Court decision (Tyler v. Hennepin County).
The MMA has worked with the Joint Committee on Revenue to propose changes to state law, and the Committee’s legislative proposal is the result of countless months of engagement with all stakeholders. While we can appreciate the intent of the Senate to address the issue in the Budget, we have strong concerns with the final proposal in Sections 58-77 of S. 2800. We support the pursuit of separate legislation on the matter in the House and Senate, rather than the budget, to make important and thoughtful changes to the law while protecting taxpayers and municipalities across the Commonwealth.
Preserving the Lottery as the Foundation of Unrestricted Local Aid
As we discuss the need for a strong state-local fiscal partnership, the conversation also involves the largest revenue source that the state uses to fund unrestricted local aid: the Massachusetts State Lottery. More than 50 years ago, the Lottery was established for the sole purpose of supporting cities and towns. According to the State Lottery Commission, in the most recently completed fiscal year (fiscal 2023), the Lottery generated $1.193 billion in net proceeds to the state, supporting approximately 94% of the Commonwealth’s annual appropriation for Unrestricted General Government Aid.
We appreciate the interest in expanding Lottery operations to compete in a rapidly changing market. If the Legislature does decide to authorize internet-based Lottery games through the final fiscal 2025 general appropriations act, the MMA strongly urges that all proceeds continue to solely support cities and towns through UGGA. We have strong concerns that diverting future Lottery proceeds to other programs and interests could weaken the funding base for the state’s primary local aid account.
The Lottery’s mission is to serve cities and towns, and preserving that mission is necessary to protect a vital revenue stream that accounts for the overwhelming amount of discretionary local aid that cities, towns and taxpayers rely on to fund essential municipal and school services and balance local budgets.
Summary
In H. 4601 and S. 2800, you and your colleagues have demonstrated thoughtful consideration and strong support for municipal needs and priorities, and we again express our appreciation to you for your ongoing partnership with cities and towns.
Legislative leaders have kept municipal government at the forefront of fiscal year 2025 budget discussions, and we especially appreciate your attention to school funding, which is a major cost driver for municipal governments across the state. Regardless of size or geographic location, cities and towns are struggling to keep pace with increased costs related to educating students.
As municipalities must work within the revenue confines of Proposition 2 ½, other city and town departments are often reduced to make up the difference. As a result, your support for Unrestricted General Government Aid is also critical, as the sole source of discretionary state aid, allowing municipalities to use it where it is needed the most.
If you have questions or need additional information, please do not hesitate to contact us at any time. Your office can reach out to me or MMA Deputy Legislative Director Jackie Lavender Bird at jlavenderbird@mma.org at any time.
Thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.
Sincerely,
Adam Chapdelaine
MMA Executive Director & CEO
CC: The Honorable Ronald J. Mariano, Speaker of the House
The Honorable Karen E. Spilka, Senate President