Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
The Honorable Aaron Michlewitz, House Chair
The Honorable Michael J. Rodrigues, Senate Chair
The Honorable Ann-Margaret Ferrante, House Vice Chair
The Honorable Cindy F. Friedman, Senate Vice Chair
The Honorable Paul J. Donato, House Assistant Vice Chair
The Honorable Jason M. Lewis, Senate Assistant Vice Chair
The Honorable Angelo L. D’Emilia, Ranking House Minority Member
The Honorable Patrick M. O’Connor, Ranking Senate Minority Member
Joint Committee on Ways and Means
State House, Boston
Dear Chair Michlewitz, Chair Rodrigues, and Distinguished Members of the House and Senate Committees on Ways and Means:
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association very much appreciates your support for local government. We look forward to working with you and your colleagues in the House and Senate in developing and finalizing a state spending plan for fiscal 2022 that reflects your strong commitment to communities as they recover from the impacts of the COVID-19 pandemic.
In order to have a healthy and sustainable economic recovery in every region of Massachusetts, cities and towns must rely on a strong and abiding state-local partnership. 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 education and municipal services, ensure safe streets and neighborhoods, and maintain local roads and vital infrastructure. While we are pleased that cities and towns will receive much-needed relief from the federal government with the recent passage of the American Rescue Plan Act, it is important to acknowledge that this federal funding is one-time stimulus revenue to address the COVID-19 pandemic and provide urgent assistance to households and businesses, and therefore is not an alternative to state funding and support for local aid and key operational programs.
We are writing today to provide you with information on important funding priorities and investments in key municipal and school aid programs, and ask that you incorporate these requests into the fiscal 2022 state budget bill that you are preparing for House and Senate debate in April and May.
Unrestricted General Government Aid
We strongly support the $39.5 million increase in the Cherry Sheet Unrestricted General Government Aid (UGGA) account (1233-2350) proposed in House 1. This essential municipal account would grow at the same rate that state tax collections for fiscal 2022 are forecast to grow through the state “consensus” revenue process, including distribution of the full municipal share of Lottery and other gaming revenue.
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 the House and Senate fiscal 2022 budget bills.
Chapter 70 School Aid
We support funding for Chapter 70 school aid (7061-0008) that matches the promise of the Student Opportunity Act (SOA). Through the Student Opportunity Act landmark legislation, the state committed to investing an additional $1.5 billion in Chapter 70 education aid, phased in over seven years beginning in fiscal 2021, and reaching its goal in fiscal 2027.
Understandably, the uncertainty surrounding the COVID-19 pandemic initially delayed the first year of SOA funding. House 1 does not address this delay, and simply restarts the seven-year schedule in fiscal 2022. In order for the fiscal 2022 budget to truly be a recovery budget, we urge the Legislature to retain the fiscal 2027 target and treat this as the second year of the Student Opportunity Act’s seven-year plan in order to remain on schedule. This would ensure critical funding for our public schools as cities and towns move rapidly to restore full-time in-person teaching and programming, and make up for the learning deficits and disruptions caused by the pandemic.
Further, the House 1 recommendation is based on student enrollment data from October 1, 2020. As we know, many families opted out of the public schools during the pandemic and student enrollment decreased by over 30,000 students statewide. Approximately one-third of the students held out are kindergarteners, one-third were transferred to homeschool environments, and the last one-third are students who have transferred to private or parochial schools at significant cost to families. School districts are reasonably expecting that the vast majority of these students will return to public schools next year. We ask that you “hold harmless” school districts by using the higher of October 1, 2019, or October 1, 2020, student enrollment data for each district.
Support for funding of year two of the Student Opportunity Act, as well as using higher student enrollment data, will increase the statewide foundation budget and we ask that the Legislature be mindful of potential impacts in districts’ required local contribution increases. To that end, we fully support the Governor’s one-time provision in House 1 allowing municipalities to apply a portion of their Elementary and Secondary School Emergency Relief (ESSER II) funding award toward the increase in required local contribution.
Finally, there are still a large number of municipal and regional school districts that are “minimum aid” districts. Under the H. 1 recommendation, 233 districts would receive new aid of only $30 per student. This means that these districts would receive below-inflation aid increases, which is simply inadequate to maintain existing programs and services. Further, all school districts will face the need to enhance programs and services, rather than simply maintain, to address the impacts of the disrupted school year, including academic learning loss and additional social emotional support. We respectfully request that minimum aid be set so that all schools receive a meaningful increase in fiscal 2022, which we believe should be at least $100 per student. Higher minimum aid is necessary to ensure that no school district or student is left behind.
Charter School Impact Mitigation Payments
We support funding the charter school impact mitigation account (7061-9010) consistent with the schedule adopted in the Student Opportunity Act, which would be year two of a three-year phase-in process. As was the case with Chapter 70 funding, the SOA’s commitment to fund 75% of the state’s statutory obligation to mitigate Chapter 70 losses to charter schools was also delayed in fiscal 2021. Under the H. 1 proposal, the state would continue to lag one year behind in funding the SOA commitment, providing only $143.5 million (75%) of the $190.6 million reimbursement entitlement. We support funding year two, or 90% of the state’s statutory obligation to stay on the legislation’s intended schedule, which would require approximately $171.5 million.
To add additional context, H. 1 would increase the charter school mitigation line item by $26 million, but the statewide preliminary Cherry Sheets show an increase of $81 million in charter school assessments for fiscal year 2022. This demonstrates that, under H. 1, the net diversion of Chapter 70 funds away from school districts would grow by $55 million, causing significant fiscal stress. In addition, placing the SOA schedule back on track as requested would naturally increase the foundation budget in fiscal 2022, making the growth in diverted funds even higher.
The sharp increase in assessments levied on local school districts to pay tuition to charter schools has imposed a major and growing financial burden on cities and towns, because rising charter school assessments force 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 to accelerating the schedule to match the original SOA timeline, we respectfully request that the Legislature add a “circuit breaker” mechanism to protect those districts that are hardest hit by the unfair charter school funding system.
Rural School Finance
While the Student Opportunity Act established a special commission to study the long-term fiscal health of rural districts, the special financial and operational challenges facing rural districts were not addressed in the legislation. We support an adequate appropriation to sustain the rural schools assistance program (7061-9813). After making enrollment and minimum aid adjustments as recommended above, we question whether the H. 1 appropriation of $1.5 million is adequate to meet the needs of rural districts, which have been struggling due to declining enrollments and the economics of operating districts that cannot increase geographic size, and we ask that you increase funding to meet the need.
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 included in the Student Opportunity Act to add transportation expenses as an eligible cost. DESE’s recent update shows the projected reimbursement obligation will be $368.5 million, slightly above the $367.7 million amount in H. 1.
Student Transportation Reimbursements
Funding to assist cities, towns and school districts with the cost of transporting school children is another critical priority, and we respectfully urge full funding of the state’s reimbursement obligations.
Regional Schools: We support full funding for transportation reimbursements to regional school districts (7035-0006). Unfortunately, the Governor proposed decreasing funding for this key account by more than $6 million in fiscal 2022, even though these reimbursements are vital to all regional districts and their member cities and towns, particularly in sparsely populated parts of the state. We respectfully ask that the House and Senate increase funding for this key account to reflect higher transportation costs for communities and to move the state closer to its full reimbursement commitment. DESE is projecting that full reimbursement in fiscal 2022 would require $87.4 million, and at $75.9 million, H. 1 would only provide 87% of the funding needed.
Homeless Students: 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 costly transportation services to bus homeless students to schools outside of the local school district. Again, at only $11.1 million, H. 1 decreases funding for this account by $2.4 million, leaving the reimbursement at $11.1 million, instead of the $19.6 million necessary to fully fund this state mandate (7035-0008), according to DESE’s own projections.
Vocational Schools: In addition, we support funds to reimburse communities for a portion of the cost of transporting students to out-of-district placements in vocational schools (7035-0007), 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 the House and Senate increase this account for fiscal 2022. At just $250,000, it would fund only 5.6% of the estimated $4.5 million expense.
Payments In Lieu Of Taxes (PILOT)
We support additional funding of the Commonwealth’s obligations and commitments to the program for payments in lieu of taxes for state-owned land (PILOT) (1233-2400). The H. 1 proposal level-funds this account at $31 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.
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.
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, and would facilitate budget planning during the most uncertain of times.
This is a critical time for cities, towns and local taxpayers. We know that you and your colleagues in the House and Senate continue to be outstanding partners for communities across the Commonwealth, and we look forward to working with you not only to recover from the pandemic, but to thrive, over the coming years. It is clear that the Massachusetts economy will only fully recover from this crisis if all 351 cities and towns have the resources to adequately serve the residents and businesses of the Commonwealth, which is why these priorities are so important to our future.
Thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.
Geoffrey C. Beckwith
MMA Executive Director & CEO