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

Dear Governor Baker,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association is writing with comments on H. 4800, the fiscal 2019 budget bill enacted by the Legislature and sent to you for review and approval.  The investments in cities and towns and local education programs in this budget bill demonstrate that state leaders are committed to a strong fiscal partnership with local government.

Unrestricted Municipal Aid
City and town officials across the Commonwealth appreciate the $1.099 billion appropriation for Cherry Sheet Unrestricted General Government Aid (UGGA) (1233-2350 and section 3) that will help cities and towns balance local budgets in fiscal 20109 and ease reliance on the property tax.  The MMA and local officials know that this much-needed increase in unrestricted municipal aid originated with your budget proposal, and we are deeply grateful.

Funding for this vital municipal aid program reflects the commitment of Lottery and other gaming revenue to support local government services and avoid over-reliance on the property tax.  Nearly all of the Cherry Sheet UGGA distribution for fiscal 2019 will be covered by gaming revenue with little funded from state tax collections. Even at $1.099 billion, the UGGA account will still be more than $200 million less than it was in fiscal 2008.

We respectfully ask that you support the full UGGA amount proposed by you and voted by the House and Senate in the conference committee report. This is a high priority for cities and towns.

Chapter 70 School Aid and Local Contributions
We strongly support the $4.908 billion Chapter 70 school aid appropriation (7061-0008 and section 3) that would fund the basic requirements of the main school aid program, including the plan to assist cities and towns affected by the change in how low-income students are counted, and the provisions to continue to implement the recommendations of the Foundation Budget Review Commission.

We strongly support a funding increase for Chapter 70 school aid that is sufficient to allow all municipal and regional school districts to reach the “foundation” level of spending, implement the target share equity provisions adopted in 2006, and provide an adequate amount of minimum aid that ensures that all schools receive a suitable and appropriate increase in fiscal 2019.  Most school districts are slated to receive the minimum aid amount as new aid next year. For fiscal 2019, this amount would be $30 per student, which we support.

We strongly support the provisions in section 3 to build on the steps taken by you in House 2 to begin implementing the recommendations of the Foundation Budget Review Commission, to update the Chapter 70 “foundation budget” minimum spending standards for special education and health insurance costs for school employees. These recommendations, approved in June 2015 and October 2015 by the Commission, would update the increasingly obsolete foundation budget and restore some measure of credibility to the standard developed as part of the landmark education reform law of 1993.  We look forward to full implementation of the Commission recommendations as soon as possible.

Special Education “Circuit Breaker”
We strongly support the $319.3 million appropriation to fully fund 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.  Thank you for approving the $12.5 million in a supplemental budget earlier this year to help close the fiscal 2018 gap and for seeking an additional $12.5 million in the final supplemental budget bill to full fund the state’s share.

Under 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.

Reimbursements for Charter School Losses
Cities and towns are enormously disappointed that H. 4800 continues the severe underfunding of charter school impact mitigation payments (7061-9010).  The rapidly growing deduction of Chapter 70 school aid from local public schools to support charter schools has become a major financial drain on cities and towns, a problem made more acute as the state grants more charters and existing charter schools expand. Local officials strongly support full funding of the Commonwealth’s statutory commitment under the law to reimburse school districts for a portion of their school aid lost when used to fund charter schools.

The H. 4800 appropriation falls far short of full funding, and we hope that full funding can be achieved later this year through a supplemental appropriation. We ask that you approve the $90 million included in H. 4800 as a starting point for the year.

For fiscal 2019, it is estimated that cities and towns will be assessed $661 million in local school revenues to fund charter schools, an increase of $72 million (12 percent) above the estimated level last year. With assessments at over half a billion dollars and growing, it is critical for the state to fund its financial commitment under the state statute. Full funding of the statutory formula would require $172 million, based on data from the Department of Elementary and Secondary Education (DESE). Without these funds, cities and towns will face another round of lost school aid next year, resulting in fewer programs for the vast majority of students who remain in the local public school setting.  These school aid deductions are impacting a large number of communities, including some the state’s poorest and most financially distressed cities and towns. Underfunding the charter school reimbursement formula harms the most vulnerable and challenged school districts and communities.

Rural School Aid
We support the $1.5 million appropriation (7061-9813) that would provide much needed special financial assistance to rural school districts (municipal and regional) with very low density of students.

Regional School District Student Transportation Reimbursements
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. Underfunding this account has presented serious budget challenges for these districts, taking valuable dollars from the classroom. Full funding next year would require $86 million, according to DESE. We support the $68.9 million appropriation that is before you.

McKinney-Vento Homeless Student Transportation Costs
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. The Legislature has appropriated $9.1 million (7035-0008), which we ask you to support. According to the most recent DESE projection, full funding of the mandate would require almost $22.3 million in fiscal 2019. We know that your long-term priority and focus is on reducing the number of homeless families in hotels and motels, which is the ultimate solution. In the meantime, though, the $9.1 million will present ongoing financial challenges in impacted communities.

Out-of-District Vocational Education Student Transportation
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 (7035-0007). 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 may not be available locally. DESE estimates that full funding of the state’s obligation next year would require $3.9 million. The H. 4800 appropriation would provide $250,000 in funding for this account.

Payment in Lieu of Taxes on State-owned Land
We urge support for the appropriation of $28.5 million to pay a portion of the payment-in-lieu-of taxes amount due to cities and towns to offset the property tax exemption for state-owned land (1233-2400). We support the additional $1.7 million set aside appropriation language to ensure that Cherry Sheet PILOT payments next year are not reduced below the fiscal 2018 level due to the revaluation of state-owned land that takes effect next year.

There are nearly 450,000 acres of state-owned land in cities and towns with a total valuation of $2.9 billion. Full funding of the PILOT statute would require an estimated $42.4 million next year. Funding for the PILOT program is particularly important for cities and towns across the Commonwealth that host and provide services to state property and facilities.

Shannon Anti-Gang Grant Program
Please support the appropriation of $8 million for the highly effective and valuable Shannon Anti-Gang Grant Program (8100-0111) that has helped cities and towns respond to and suppress gang-related activities.

Reserve Fund for Municipal Improvements
Please support the appropriation in item 1599-0026 that would provide $2.8 million for the District Local Technical Assistance Fund (DLTA) that helps support local efforts to regionalize local government services. We also support the appropriation that includes $2 million to support the Community Compact Cabinet program to facilitate the adoption of municipal best practices in cities and towns – this is a highly popular and successful program.

Department of Labor Relations
We urge support for the appropriation of $2.6 million (7003-0900) for the Department of Labor Relations (DLR), which would increase funding in order to maintain a current level of service. This funding would support DLR staff representatives, including management representatives, who are making great strides in engaging cities and towns in order to resolve bargaining disputes.

Joint Labor-Management Committee
We support the appropriation of $250,000 (7003-0902) for the Joint Labor-Management Committee (JLMC). The JLMC provides important support, assistance and intervention in collective bargaining disputes involving municipal police officers and firefighters in order to facilitate good faith negotiations and constructive long-term relationships with municipal employers. This budget item would support the part-time Chairman, four part-time Senior Staff Representatives, and the direct expenses of the Committee in order to carry out its mandate under state law while facing the demands of a rising caseload.

Community Preservation Act State Match Funds
Please support section 99 that would allocate $10 million from the fiscal 2018 year-end balance to supplement the state match for Community Preservation Act distributions.  The estimated state match has reached a historic low point and requires new revenues to remain a viable incentive for a very popular program that includes a revenue set-aside for local housing programs.

Culverts and Small Bridges Working Group
Please support section 102 that would establish a special working group to review the rules governing the replacement and reconstruction of culverts and small bridges.  This is a very important public works matter at the local level, particularly in small towns, that incudes complex issues related to design and engineering and public finance.  The MMA would be a member of the work groups, and look forward to providing assistance.

SUMMARY

This is a critical time for our economy, and for cities, towns and local taxpayers.  We thank you for your efforts to advance a strong state budget plan that invests in our communities, and we thank you for your remarkable leadership in promoting a powerful state-local partnership.

The Massachusetts economy will only maintain healthy statewide growth and job creation if all 351 cities and towns have the resources to adequately serve the residents and businesses of the Commonwealth. This is why we respectfully ask that you approve the local aid investments detailed above, and support policies to protect municipal authority and resources.

Please do not hesitate to have your office contact us at any time if you have any questions or need additional information.

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

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO

cc:     The Honorable Karyn Polito, Lieutenant Governor of the Commonwealth
Secretary Michael Heffernan, Executive Office for Administration and Finance
Senior Deputy Commissioner Sean Cronin, Division of Local Services