The Honorable Aaron Michlewitz, House Chair
The Honorable Michael J. Rodrigues, Senate Chair
The Honorable Denise C. Garlick, House Vice Chair
The Honorable Cindy F. Friedman, Senate Vice Chair
The Honorable Elizabeth A. Malia, House Assistant Vice Chair
The Honorable Jason M. Lewis, Senate Assistant Vice Chair
The Honorable Todd M. Smola, Ranking House Minority Member
The Honorable Viriato M. deMacedo, Ranking Senate Minority Member
Joint Committee on Ways and Means
State House, Boston

Dear Representative Michlewitz, Senator Rodrigues, and Distinguished Members of the House and Senate Committees on Ways and Means:

On behalf of cities and towns in all parts of the Commonwealth, the Massachusetts Municipal Association is writing to support important funding for key municipal and school aid programs in the fiscal 2020 state budget bill that you and your colleagues in the House and Senate will consider in the coming weeks.

A strong and enduring partnership between cities and towns and state government is essential to a healthy and expanding economy, and to the ability of local government to provide world-class education and municipal services, ensure safe streets and neighborhoods, and maintain local roads and vital infrastructure. This is fundamental to our state’s economic success and competitiveness.

UNRESTRICTED GENERAL GOVERNMENT AID (UGGA)
We strongly support an increase in the Cherry Sheet Unrestricted General Government Aid (UGGA) account (1233-2350) at least at the same rate that state tax collections for fiscal 2020 are forecast to grow through the state “consensus” revenue process, including distribution of the full municipal share of Lottery and other gaming revenue from Plainridge Park Casino, MGM Springfield that opened in August 2018 and Encore Boston Harbor that is slated to open this coming June. These facilities will generate new revenues to support UGGA distributions.

Municipal aid was cut deeply during the Great Recession and earlier retrenchments, and this year remains over $200 million below the fiscal 2008 level of funding, without adjusting for inflation. With local aid levels reduced so deeply, local reliance on the property tax remains stubbornly high. A recent report by the Massachusetts Taxpayers Foundation affirms that cities and towns are more reliant on the property tax than at any time since the implementation of Proposition 2½ in the early 1980s.

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 the House and Senate to adopt the recommendation in H. 1 to fund the UGGA account at $1.13 billion. This would provide an increase of $29.7 million, or 2.7 percent, consistent with the “consensus” revenue forecast.

REFORMING AND INCREASING PUBLIC SCHOOL FUNDING
We strongly support substantial reform of the state’s decades-old school finance law, to update and increase Chapter 70 funding (7061-0008) consistent with the recommendations of the Foundation Budget Review Commission. In addition, any school reform measure must rework how charter schools are financed to reduce the fiscal damage done to the local public school systems that have lost students to local or regional charters. We acknowledge the Governor’s initiatives in H. 1 and H. 70, but ask that the Legislature enhance and improve these recommendations, using as a base the PROMISE Act legislation filed in the House (H. 586) and Senate (S. 238) and other school finance bills and proposals, and phasing in the reforms in a much shorter time frame than the 7 years in H. 1.

Implementing consensus Foundation Budget Review Commission (FBRC) reforms: We support updating the Chapter 70 foundation budget factors consistent with the FBRC’s well-known recommendations. This includes accurate and realistic factors for special education and health benefits for active and retired school employees. It also includes enhanced and reworked increments for low-income and English Language Learner (ELL) students. We also support the proposal in the Governor’s recommendation to enhance the guidance and psychological services factor to reflect new best practices related to school safety and climate and social and emotional health.

Ending the damage caused by the flawed charter finance system: We call for a school finance circuit breaker to mitigate the harm done to local public schools by the state’s method of funding charter schools. The charter school finance proposal in H. 70 is inadequate and would do little to help local schools. The PROMISE Act bills include a thoughtful “district student aid floor” that would better integrate Chapter 70 and charter school finance and lessen the damage done by the current method. The MMA has also filed a separate bill (H. 418) to reform charter school finance.

Ensuring adequate minimum aid to leave no community behind: Even with the partial implementation of many of the FBRC’s recommendations in H. 1, fifty-seven percent of our school districts – 183 cities, towns and regions ranging from smaller towns in western Massachusetts to our capital city of Boston – would only receive minimum aid, set at a woefully inadequate level of just $20 per student. Under this scenario, all of these districts would be forced to cut existing school programs or further diminish municipal services. We ask that annual minimum aid increases be at least $100 per student to avoid the damage that would hit so many schools across the state.

Addressing rural school fiscal challenges: School finance is complicated, with disparate impacts across different types of districts and in different parts of the Commonwealth. Even with the above reforms and policies, far too many cities, towns, and school districts would be left behind. That is why any meaningful school finance reform plan must also include provisions to assist rural school districts. H. 1 contains no fiscal relief for regional schools struggling with declining enrollment, even though further consolidation or other fiscal efficiencies are simply not feasible in these areas.

School finance reform is long overdue and must address needs in all districts. We urge the House and Senate to build on H. 1 and the PROMISE Act bills to truly update this vital part of the state-local partnership and the Massachusetts economy.

SPECIAL EDUCATION CIRCUIT BREAKER
We support full funding of 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. Under section 5A of Chapter 71B of the General Laws, the state’s share is 75 percent of costs that exceed four times the state average per pupil foundation budget. 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 respectfully ask that the fiscal 2020 budget reflect the estimated cost of fully funding the Circuit Breaker program in the coming year. We believe that H. 1 significantly underfunds the Circuit Breaker by as much as $20 million, and ask your committees to obtain the latest data from DESE to ensure that the program is fully funded. It goes without saying that full funding of this and other school reimbursement accounts is essential in order to make any increase in Chapter 70 meaningful.

STUDENT TRANSPORTATION REIMBURSEMENTS
Funding to assist cities, towns and school districts with the cost of transporting schoolchildren is another critical priority. There are four aspects to this important budget priority: 1) reimbursements to regional districts; 2) the transportation of homeless students under the McKinney-Vento program; 3) transporting out-of-district vocational students; and 4) renewed reimbursements to regular (non-regional) school districts.

1) Funding for transportation reimbursements to regional school districts (7035-0006) 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 above the H. 1 amount to reflect higher transportation costs for communities and to move the state closer to its full reimbursement commitment. H. 1 simply level-funds regional transportation, increasing the current funding shortfall, due to normal rising expenses.

2) The State Auditor has ruled that the McKinney-Vento program (7035-0008) is an unfunded mandate on cities and towns. Under the program, communities are providing very costly transportation services to transport homeless students to schools outside of the local school district. Again, H. 1 level-funds this program at its already too-low amount. We respectfully ask that the House and Senate fully fund this state mandate.

3) The fiscal 2019 state budget includes 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 fully fund this account in the fiscal 2020 budget.

4) Finally, we support a renewed reimbursement program for non-regional school districts to help fund a portion of the burden of student transportation costs. The program was removed from the state budget during a time of economic distress. Restoring funding would benefit school districts in every corner of the state, and would provide important relief that would allow communities to use more of their Chapter 70 aid and local property tax dollars in the classroom.

PAYMENTS IN LIEU OF TAXES (PILOT)
We support additional funding for the Commonwealth’s obligations and commitments to the program for payments in lieu of taxes for state-owned land (PILOT). This is a particularly important program (1233-2400) for the smaller cities and towns that host and provide municipal services to state facilities that are exempt from the local property tax. Recent changes in property valuation created distribution challenges last year, and we thank the Legislature for adding funds in fiscal 2019 to ensure that no community received reduced funding. We ask that you increase PILOT funds, which remain below pre-recession levels.

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.

A LOCAL AID RESOLUTION TO FACILITATE TIMELY BUDGET DECISIONS AT THE LOCAL LEVEL
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. We know that this may be a challenge this year, when the Legislature and Administration are deliberating on an overhaul of the Chapter 70 framework, yet it is important to keep in mind that every community and school district must finalize their budgets before July 1st , and most do this months or weeks before the Legislature takes final action on the state budget.

SUMMARY
This is a critical time for our economy, and for cities, towns and local taxpayers. We respectfully ask that the House and Senate adopt the local aid investments and targeted funding detailed above. The Massachusetts economy is growing. However, the Massachusetts economy will only reach its full potential for statewide growth and job creation if all 351 cities and towns have the resources to adequately serve the residents and businesses of the Commonwealth.

Please contact us at any time if you have any questions or need additional information by having your office reach out to me or MMA Legislative Director John Robertson at 617-426-7272 ext. 122, or jrobertson@mma.org.

Thank you very much for your distinguished record of support, dedication and commitment to the cities and towns of Massachusetts.

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO

cc: The Honorable Robert DeLeo, Speaker of the House
The Honorable Karen Spilka, Senate President