Her Excellency Maura T. Healey
Governor-elect of the Commonwealth
State House, Boston

Delivered electronically

Dear Governor-elect Healey,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association offers congratulations as you ascend to the office of Governor, and very much appreciates your unwavering support for local government. Local leaders look forward to working in close partnership with you, Lieutenant Governor Driscoll, and your Administration to move us all forward and ensure a high quality of life for residents in every community across the state.

One of the first priorities in the coming months will be to develop a state spending plan for fiscal 2024 to provide cities and towns and the Commonwealth with the capacity to provide essential services, recover from the public health emergency, and rebuild the state’s economy.

With a tightly capped property tax law that limits municipal revenues, and inflation that far surpasses allowable municipal revenue growth, cities and towns are facing major fiscal challenges. Municipalities are more reliant than ever on adequate and predictable state revenue sharing to provide vital municipal and education services, ensure safe streets and neighborhoods, and maintain local roads and critical 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 one-time funding can only be used in accordance with strict federal guidelines, and should not be used for ongoing operating expenses, as doing so would create a dangerous budget cliff that would quickly destabilize local government finances. As such, these funds cannot be seen as an alternative to state support for local aid and key operational programs.

A second early priority will be early enactment of a Chapter 90 transportation bond bill to provide for the repair and maintenance of 30,000 miles of local roads, so that cities and towns can take full advantage of the coming construction season, which will start in a few months. Construction inflation has increased by 65.7% since Chapter 90 was funded at $200 million in fiscal 2012, where it remains today. This means that communities have lost $131.4 million in purchasing power during this time, which is why we are asking that annual Chapter 90 aid be increased to at least $330 million to offset this reduced support for local road systems.

We are writing now to outline municipal priorities for Unrestricted General Government Aid, Chapter 70 education funding, and a wide range of essential state budget programs and investments, and we ask that you incorporate these municipal needs into the fiscal 2024 state budget bill that you will file by March 1.

In addition, we are asking you to file an enhanced Chapter 90 bond bill as soon as possible, so that the measure can be enacted in time for communities to receive their official fiscal 2024 Chapter 90 authorizations by the April 1 statutory deadline, enabling communities to move forward with critical road repair projects.

As you will see in the key municipal priorities outlined below, the MMA is requesting significant increases in a series of programs, most notably in K-12 school funding and reimbursement programs, and in Chapter 90 transportation reimbursements. These requests do not compete with existing state funding priorities, because these vital increases can be funded with the new revenues that the Commonwealth will collect due to the passage of Question 1 last November, which will raise at least $1.2 billion in new state tax revenues (with estimates as high as $2 billion) to be spent exclusively on education and transportation services.

Unrestricted General Government Aid (UGGA)
We appreciate your strong public support for revenue sharing during your campaign. This is the cornerstone of an enduring state-local fiscal partnership, ensuring that future state tax revenue growth is shared with cities and towns to fund essential local government services, combat the corrosive impact of inflation, and reduce overreliance on the property tax.

Revenue sharing is a compact that increases Unrestricted General Government Aid each year by the same rate of growth as state revenues (calculated by comparing the revenue estimate used to fund the enacted budget in the current year with the January consensus revenue estimate for the next fiscal year). Revenue sharing is essential for fiscal stability at the local level, providing predictable increases in unrestricted municipal aid, and is affordable for the Commonwealth because it uses a growth index that matches the state’s revenue capacity.

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. As you implement your revenue sharing policy, we ask that you adopt a framework that accurately matches the state’s revenue growth.

During the past three fiscal years, the state has benefitted from record tax revenue collections, and at times the method of calculating revenue growth during the budget process has undercounted the increases the state has enjoyed, creating a challenging process for cities and towns, because UGGA increases were lower than the actual revenue growth rate. This was a major reason why the Legislature doubled the initial UGGA increase from 2.7% to 5.4% in its fiscal 2023 budget, a step that local leaders and MMA deeply appreciate.

To avoid this problem in the fiscal 2024 budget cycle, the MMA strongly requests that the $1.23 billion Unrestricted General Government Aid account (line item 1233-2350 and Section 3) be increased by the same percentage as the growth in state revenues, calculated by using the fiscal 2023 revenue projection of $39.575 billion used by the Legislature in July, compared to the fiscal 2024 consensus revenue projection that will be set in January. This will make certain that the state’s revenue sharing policy will capture the full year-over-year growth percentage.

Cities and towns rely on Unrestricted General Government Aid funds to fund vital services at the local level and ensure that municipal overreliance on the property tax will not deepen. We are thankful for your support for a strong revenue sharing framework and urge you to incorporate our position in your fiscal 2024 budget submission.

Funding the Student Opportunity Act, Increasing Minimum Aid and Rural School Aid, and Providing Supplemental Funds for the Education of Migrant Students
We support full funding for Chapter 70 school aid (7061-0008) to reflect the commitments made in the Student Opportunity Act (SOA). For fiscal 2024, we ask that you fund Chapter 70 in accordance with the Student Opportunity Act’s goal rates, continuing to implement the funding framework following its original timeline.

Funding must be sufficient to allow all municipal and regional school districts to reach their foundation spending standard, and should also avoid unaffordable increases in minimum required local contributions, a problem that many districts may face due to significantly increased foundation budgets. Without addressing this aspect of the SOA funding challenge, districts with required increases in local contributions that exceed the percentage growth in their own local property tax revenues would be forced to cut funding for essential municipal services, a harmful zero-sum process that would weaken their capacity to deliver critical non-school services to students and families outside the classroom.

Increasing Minimum Aid to $100 per Student
At the same time, communities and districts should also receive an adequate level of minimum aid to ensure that all schools receive a meaningful Chapter 70 increase in fiscal 2024, which should be at least $100 per student. While the school aid calculation for next year is not yet available from DESE, it is very likely that many school districts would again receive only the statutory minimum aid increase ($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.

Using fiscal 2023 as a guide, the inadequacy of the statutory $30 per student minimum aid amount is clear. Forty-two percent of school districts were set as minimum-aid-only at $30 per student in the SOA’s updated Chapter 70 formula (135 out of 318 operating districts), and these communities were set to receive a meager 0.77% average increase in school aid. Fortunately, the Legislature doubled minimum aid to $60 per student, providing a very welcome boost. However, even that welcome increase left these districts far short of the amount needed to maintain existing programming. Going forward, $100 per student would result in an average increase much closer to historical inflation.

Increasing Rural School Aid
In addition, rural districts, especially those with declining enrollments, sparse populations, and low student populations, need additional aid because they must fund the fixed costs of running a school district and cannot easily consolidate or merge with other regions, as students and staff cannot travel longer distances. Further, most rural districts encompass communities with smaller commercial tax bases and lower-than-average household incomes, placing very high burdens on residential taxpayers.

Fortunately, the Legislature has recognized the special problems confronting rural districts, as identified in the July 2022 report of the Special Commission on Rural School Districts. That report makes a compelling case that Rural School Aid (7061-9813), currently funded at $5.5 million, should be increased to $60 million. This would increase the average amount for each of the 67 rural districts from about $90,000 to approximately $895,000. With the current Chapter 70 formula driven by student headcounts, Rural School Aid is a lifeline to assist these communities and make sure that their schools can keep pace with the rest of Massachusetts.

Supplemental Education Funding for Migrant Students Placed in School Districts
Recognizing that placing migrant families with children in communities can present unforeseen challenges for local school districts, the outgoing Governor submitted a fiscal 2023 supplemental budget proposal with the Legislature in November to provide emergency aid to impacted school districts. The supplemental budget would establish a $37 million reserve to cover the remainder of the 2022-2023 school year, and all of the 2023-2024 school year. As no action has been taken on that supplemental budget request, we ask that you include this proposal in your House 1 submission for fiscal 2024, allowing communities to welcome these new students into their schools with the resources needed to maintain current services for all students.

Charter School Impact Mitigation Payments
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 have forced 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 would have a directly negative impact on the vast majority of schoolchildren. Of the cities and towns with the largest charter school impacts, 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.

To address this problem, we support full funding of the charter school impact mitigation account (7061-9010) to reimburse school districts according to the formula enacted in the Student Opportunity Act, and we appreciate the Legislature’s action to do so in this year’s state budget.

However, even when 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 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 at least a full minimum aid increase, after charter payments, based on the number of students remaining in the traditional, non-charter, public school system.

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. 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 and transportation costs. In fiscal 2023, the program was funded at $441 million. We anticipate that full funding of the circuit breaker program will require a substantial increase above this amount in fiscal 2024, as the state granted private special education schools a 14% rate increase in November, and eligible transportation expenses are clearly rising faster than inflation.

Student Transportation Reimbursements
Funding to assist cities, towns and school districts with the cost of transporting school children is another critical priority. Many of these accounts have been significantly underfunded, placing acute fiscal pressure on communities across the Commonwealth. With little competition in the marketplace, rising fuel costs, and workforce shortages, school districts are facing steep increases in student transportation expenditures, taking funds away from the classroom. All communities need relief in the form of full reimbursements of existing programs, including renewal of reimbursements for state-mandated student transportation in non-regional districts.

Regional School Transportation
We support full funding for transportation reimbursements to regional school districts (7035-0006). State law mandates that regional school districts provide transportation for all students in Grades K-12, and provides that all districts be reimbursed by the state for 100% of the cost of transporting students who reside 1½ miles or more from their schools. Currently, this account is underfunded, as the $82.1 million appropriation covers approximately 85% of DESE’s estimated costs for fiscal 2023, a shortfall of about $15 million. Full funding of this state’s commitment to regional school districts has rarely been achieved. 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 bring the state to its full reimbursement commitment in fiscal 2024.

McKinney-Vento Transportation for 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 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). We appreciate that the Legislature fully funded this program with $22.9 million at the beginning of fiscal 2023. With a large influx of migrant and refugee families coming into Massachusetts, we anticipate that a significant increase may be needed to fully fund the program in fiscal 2024. DESE and DHCD will need to provide updated data to your office to fully identify these costs.

Out-of-District Transportation for Vocational Students
We support full funding to reimburse communities for the eligible 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. Currently, placeholder funding of $250,000 is provided in fiscal 2023, and full funding would require approximately $4.5 million.

Restoration of Reimbursements for State-Mandated Student Transportation
Cities and towns are mandated by state law to provide transportation for students in Grades K-6 who live more than two miles from their school if their bus stop is more than one mile from their home. According to State Auditor Bump’s recent report on the status of state funding for mandated programs and local aid commitments, this particular state mandate imposed nearly $158 million in costs on non-regional school districts in fiscal 2021, an expense that is certainly higher now due to rising fuel and staffing costs and the limited number of providers in the marketplace. Further, state law provides that cities and towns are eligible for state reimbursement for costs related to transporting students who reside 1½ miles or more from their schools. Twenty years ago, the state budget included $57 million in transportation reimbursements to non-regional school districts (in line item 7035-0004), however this program was eliminated during the economic downturn in the early 2000s, shifting the entire burden onto localities. With the passage of Question 1 to fund education and transportation, state revenues reaching record levels, and communities struggling with capped property taxes and exceedingly high increases in student transportation costs, now is the time to restore this key account and fulfill the state’s commitment.

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.

The 2022 report by State Auditor Bump (referenced above) found that state funding has not met the state’s statutory obligation for at least 20 years. It is great news that the Legislature has been prioritizing this account with a multi-year plan to phase in full funding. The fiscal 2023 budget provided a $10 million increase, bringing the program up to $45 million, very close to the estimated $49 million needed for full funding. We ask that you work with the Division of Local Services to determine the fiscal 2024 full funding level, and include that recommendation in your budget submission. In addition, 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 so that their PILOT reimbursements do not decline.

Community Compact Program
Local officials across the state strongly support the continuation of the Community Compact program (1599-0026), a wildly popular initiative that delivers great results at the local level, providing small but critical grants to cities and towns to implement best practices in government finance and operations, advance efficiency improvements and regionalization efforts, leverage key IT improvements, and help modernize municipal fiber. The program also provides a clearinghouse to connect municipalities with dozens of state grant programs. Maintaining and growing this program will enable communities across the state to implement important local priorities to improve operations and enhance effective service delivery.

Shannon Anti-Gang Grant Program
We support continued funding for the Shannon anti-gang grant program (8100-0111), which is funded at $12.3 million in this year’s state budget. This initiative has helped cities and towns respond to and suppress gang-related activities, and we respectfully ask that you maintain funding for this important crime prevention program in your House 1 proposal.

Early Notification of Municipal and Education Aid Funding
Due to the change in gubernatorial administrations, your budget submission to the Legislature is due five weeks later than the usual schedule. However, cities and towns are already drafting their fiscal 2024 budget plans, and are asking for information on potential local aid levels right now. Most communities must enact their budgets in April and May at Town Meeting, following the schedule set in their local charters and bylaws, which is why municipalities use House 1 funding as their baseline during this process. Waiting until March 1 to learn about local aid funding, especially Unrestricted General Government Aid and Chapter 70 education funding, would hamper effective planning across all municipal and school departments, which is why we respectfully ask that you provide localities with details of your local aid funding levels as early as possible.

Chapter 90 Needs a Long-Overdue Increase to At Least $330 Million
Another front-burner issue for local government is quick passage of a Chapter 90 bond bill, so that cities and towns can move forward to maintain, repair and rebuild the 30,000 miles of municipal roadways in Massachusetts.

The MMA’s past surveys on gaps in local road funding across the state have shown that communities need at least $600 million to adequately fund municipal road and bridge projects in a state of good repair. (The MMA is currently in the field with an updated survey, and initial responses indicate that the need is even higher today, due to aging roads and higher costs.) Current Chapter 90 funding supports only a fraction of this need.

Chapter 90 bond-funded allocations have been generally flat at $200 million since fiscal 2012, yet the purchasing power of the Chapter 90 program has diminished substantially. While Chapter 90 remains at $200 million in fiscal 2023, the cost of road construction and maintenance has increased by 65.7% over the past 11 years.1 In other words, the real (inflation-adjusted) level of state support for local road projects has dropped by 65.7%, a loss of $131.4 million in purchasing power over the past 11 years.

Communities desperately need Chapter 90 to increase to at least $330 million to offset this loss in capacity. Otherwise, cities and towns will continue to fall further behind each year, and our local roads will continue to crumble.

Swift passage is key as well. Cities and towns cannot award contracts based on Chapter 90 reimbursements until official notifications are received, and late passage of the Chapter 90 bond bill in recent years has forced communities to bid, award and start work on projects in a significantly shortened timeline, compressing the construction season, driving up the cost of projects due to more expensive bid responses, and reducing the scope of work accomplished.

This is one of the reasons why a multi-year bill, indexed to grow annually by the NHCCI inflation rate, would be a great improvement, as this would avoid a process that lurches from year to year, improve the ability to plan at the local level, and protect against the corrosive impact of rising inflation.

With a tightly capped property tax, communities do not have the resources to close the massive gap between what is needed for local roads and the current level of Chapter 90 funding. The good news is that voters have enacted Question 1, providing at least $1.2 billion in new revenues targeted for education and transportation. Chapter 90 is a perfect use of a small portion of these new funds, keeping municipal roads safe and in good condition, and supporting local businesses and economies in all parts of the state. These funds would be put to work immediately and contribute to the state’s economic recovery.

This is a critical time for cities and towns, our residents, and our economy. We know you and Lieutenant Governor-elect Driscoll will be outstanding partners for communities across the Commonwealth. We look forward to working with you in the months and years ahead 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 key 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, and wish you the very best in the New Year.


Geoffrey C. Beckwith
MMA Executive Director & CEO

The Honorable Kimberly Driscoll, Lieutenant Governor-elect of the Commonwealth
Secretary-designate Matthew Gorzkowicz, Executive Office for Administration and Finance
Ms. Kate Cook, Chief of Staff-designate, Office of the Governor
Ms. Gabrielle Viator, Senior Advisor-designate, Office of the Governor

    1. The Federal Highway Administration’s National Highway Construction Cost Index (NHCCI), which measures the cost of road and highway construction projects, grew by 65.7% from fiscal 2012 to fiscal 2023, rising from 1.541 to 2.553 over the past 11 years. Please use this link to access the USDOT’s NHCCI dashboard.