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 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 2021 that is in harmony with revenue and spending plans at the local level, and moves the communities of Massachusetts forward.

In order to have a healthy and sustainable economy in every region of Massachusetts, cities and towns and state government must have a strong and enduring 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.

We are writing today to provide you with information on important funding priorities and investments in key municipal and school aid programs and to ask that you incorporate these requests into the fiscal 2021 state budget bill that the House and Senate will take up in April and May.

Funding Unrestricted General Government Aid (UGGA) at the H. 2 amount is a top municipal priority and reflects the revenue sharing approach that the Legislature and Governor have supported for the past 5 years, bringing a welcome and much-needed measure of stability to local budgets. Passage of the landmark Student Opportunity Act (SOA) was a generational achievement, and will revitalize the foundation budget spending standard in Chapter 70 and other education statutes, and full funding of the implementation schedules included in the law are vitally important to cities and towns.

UNRESTRICTED GENERAL GOVERNMENT AID (UGGA)
We strongly support the $31.6 million increase in the Cherry Sheet Unrestricted General Government Aid (UGGA) account (1233-2350) proposed in H. 2. This essential municipal account would grow at the same rate that state tax collections for fiscal 2021 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 and Encore Boston Harbor.

Municipal aid was cut deeply during the Great Recession, and this year still remains almost $200 million below the fiscal 2008 level of funding, without adjusting for inflation. With municipal aid still trailing levels from more than a decade ago, local reliance on the property tax remains stubbornly high.

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 2021 budget bills.

CHAPTER 70 SCHOOL AID
We support funding for Chapter 70 school aid (7061-0008) that meets the promises made in the Student Opportunity Act (SOA) that became law in November. We support funding that is sufficient to allow all municipal and regional school districts to reach the new, more adequate “foundation” spending standard.

Unfortunately, there are 174 municipal and regional school districts that are “minimum aid” districts under the H. 2 recommendation and 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. We respectfully request that minimum aid be set so that all schools receive a meaningful increase in fiscal 2021, 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, and respectfully request a “circuit breaker” to protect those districts that are hardest hit by the funding system.

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, a problem made more acute as the state grants more charters and existing charter schools expand. Rising charter school assessments are forcing local public schools to cut programs and services to make up the difference.

The H. 2 recommendation would increase charter school mitigation payments by $23.2 million, while preliminary assessments on local school districts to pay tuition to charter schools would grow by $56 million next year, increasing the magnitude of the Chapter 70 diversion.

Because the great majority of K-12 students attend local public schools, this means that the shortcomings of the current charter school finance system have 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. The charter school funding framework has the unfortunate effect of harming the most vulnerable and challenged school districts.

Even if 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 will 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 a minimum aid increase, after charter payments, based on the number of students remaining in the traditional, non-charter, public school system.

RURAL SCHOOL FINANCE
We support an adequate appropriation to sustain the rural schools assistance program that was funded in the fiscal 2020 budget (7061-9813) and amended in the final fiscal 2019 supplemental budget act. The special financial and operational challenges facing rural districts were not addressed in the Student Opportunity Act, although a special commission was established to study the long-term fiscal health of rural districts. We support the work of the commission and an appropriation for the ongoing assistance program.

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.

STUDENT TRANSPORTATION REIMBURSEMENTS
Funding to assist cities, towns and school districts with the cost of transporting schoolchildren is another critical priority.

We support funding for transportation reimbursements to regional school districts (7035-0006). Unfortunately, the Governor proposed level-funding this key account at $75.8 million, even though 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 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.

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. H. 2 would simply level-fund this account, and we respectfully ask that the House and Senate fully fund this state mandate (7035-0008).

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 fully fund this account for fiscal 2021.

PAYMENTS IN LIEU OF TAXES
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). H. 2 proposed level-funding at $30 million. 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. In addition, we ask that you provide funds to ensure that communities are held harmless, so that their PILOT payments do not decrease due to changes in valuations.

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 (including the MMA’s Chapter 70 funding recommendations for $100 per-student in minimum aid).

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.

SUMMARY
This is a critical time for cities, towns and local taxpayers. We know that the House and Senate are outstanding partners for communities across the Commonwealth, and we look forward to working with you to make real progress over the coming years. Massachusetts is experiencing a growing economy, but it is clear that 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.

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

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO