Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
The Honorable Aaron M. 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 Todd M. Smola, Ranking House Minority Member
The Honorable Patrick M. O’Connor, Ranking Senate Minority Member
Joint Committee on Ways & Means
State House, Boston
Delivered electronically
Dear Chair Michlewitz, Chair Rodrigues, and Distinguished Members of the Fiscal 2023 State Budget Conference Committee,
On behalf of cities and towns across the Commonwealth, we are writing to express our appreciation for the many provisions in the fiscal 2023 budget bills approved by the House (H. 4701) and the Senate (S. 2915) that benefit communities throughout the state. Both bills reflect a commitment to a strong fiscal partnership with municipalities.
We thank the House and Senate for advancing a state budget framework that continues to value a strong state-local government partnership through the support of several key local aid accounts. While there are a number of areas where the House and Senate agree on funding levels for municipal and school aid accounts, there are several areas where the two branches will have to resolve differences. In this letter, we offer municipal government’s position on important funding and policy proposals that would impact communities, and we respectfully ask you to take action on these matters.
Municipalities across the Commonwealth are at a critical juncture at this stage of the public health emergency. At a time where cities and towns are benefiting from a one-time influx of federal and state funding, many are also facing the tightest operating budgets that they have experienced in years. Property taxes, the primary source of municipal revenue, are capped under Proposition 2½, and many cities and towns have seen revenues stay flat, while watching the costs of delivering core services increase far above municipal revenue growth. As a result, the Legislature’s leadership in funding key local aid accounts is vitally important and truly appreciated.
We ask you to please invest in essential municipal and school aid programs, as well as adopt provisions that will aid city and town operations.
Appropriations
Unrestricted General Government Aid (UGGA)
The Senate appropriated $1.23 billion for the Unrestricted General Government Aid (UGGA) account (1233-2350 and section 3), an increase of $63 million, or 5.4%, over the fiscal 2022 level of funding. With property taxes tightly capped by Proposition 2½, cities and towns rely on adequate state revenue sharing to provide municipal and school services, ensure safe streets and neighborhoods, and maintain vital infrastructure. These services are fundamental to our state’s economic recovery, success and competitiveness. Unrestricted General Government Aid is the revenue sharing program that cities and towns receive to fund these essential municipal services. We respectfully ask the Conference Committee to include the full UGGA amount voted by the Senate. This is a very high priority for municipalities throughout the state, as these funds will all be devoted to balancing local budgets and maintaining the local programs and services that residents rely on every day.
Chapter 70 School Aid
We greatly appreciate the support from both the House and Senate to fund Chapter 70 School Aid at nearly $6 billion, representing a commitment to fund the Student Opportunity Act (SOA) following the original intended schedule. In addition to keeping the commitment to fund the SOA rates on target, both chambers recognized the challenges facing 135 “minimum aid” districts that would only receive an increase of $30 per student over the previous year under the budget filed by the governor in January. We applaud both the House and Senate for doubling this increase to $60 per student in minimum aid, and strongly support the investments in both H. 4701 and S. 2915. While the intention and total amount of these provisions are the same, we encourage you to adopt the language from the Senate version, which includes the total amount of $5.99 billion in the Chapter 70 account (7061-0008 and Section 3), securing the fiscal 2023 Chapter 70 amount in each district’s base for future years.
Special Education Circuit Breaker
We support the $440 million appropriation for Special Education Circuit Breaker (7061-0012) in H. 4701, which reimburses school districts for the high cost of educating students with disabilities. This amount reflects an increase of $67 million over the current fiscal year. The Student Opportunity Act expanded the circuit breaker by including out-of-district transportation, to be phased in over three years. We urge you to provide the appropriation level provided by the House. The House total reflects years two and three of the schedule in the Student Opportunity Act, achieving full funding a year earlier than the governor’s budget proposal would.
Charter School Mitigation Payments
We support the appropriation in the charter school impact mitigation account (7061-9010), of $243 million for charter school mitigation payments, which represents an increase of $89.2 million over the current fiscal year and $24.4 million more than the governor proposed. Both the House and Senate bills would fully fund the state’s statutory obligation for charter school mitigation payments as outlined in the Student Opportunity Act, pushing the state to phase in the plan by fiscal 2023, a full year earlier than the governor’s budget proposal would.
Rural Schools
We support the appropriation of $5.5 million in S. 2915 for Rural School Aid (7061-9813), providing rural school assistance to eligible towns and regional school districts. These grants will help schools facing the challenge of declining enrollment to identify ways to form regional school districts or regionalize certain school services to create efficiencies. We respectfully ask the Conference Committee to support the $5.5 million amount.
Payments in Lieu of Taxes on State-owned Land
We strongly urge support for the Senate appropriation of $45 million to pay a portion of the payment-in-lieu-of taxes (PILOT) amount to cities and towns with state-owned land (1233-2400), which represents a $10 million increase over fiscal 2022. Inadequate PILOT funding over the years has created a significant hardship for smaller communities with large amounts of state-owned property, and we respectfully ask the Conference Committee to support the $45 million funding amount.
Regional School District Student Transportation
We support the appropriation of $82 million for Regional School District Transportation (7035-0006), which represents an 85% reimbursement rate and is closer to the DESE full funding estimate. We respectfully ask the Conference Committee to support the amount included in the Senate budget.
Out-of-District Vocational Student Transportation
We urge support for full funding for reimbursements due under statute for part of the cost of transporting students to out-of-district vocational education placements. 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 might not be locally available. While short of full funding, we support the Senate’s appropriation of $250,000.
McKinney-Vento Homeless Student Transportation
We are grateful to both the House and Senate for adopting budgets intended to fully fund the state mandate to provide school transportation for homeless students (7035-0008). The Senate budget amount is slightly less than the House, reflecting DESE’s most recent full funding estimate for fiscal 2023. Full funding of this account is appreciated by impacted communities and school districts.
Shannon Anti-Gang Grant Program
We support the House and Senate appropriation of $12.3 million for the Shannon Grant program (8100-0111). This anti-gang grant program has helped cities and towns respond to and suppress gang-related activities. We ask for your support for this important crime prevention program.
Outside Sections
Extension to Remote Meetings and Town Meetings
We strongly support Section 133 in S. 2915, to extend temporary authorizations for remote local government meetings, currently due to expire on July 15. This provision would allow the option of remote meetings through Dec. 15, 2023. Remote participation at public meetings has ensured continuity of operations during the public health crisis and provided the additional benefit of enhanced equity in access, public engagement and transparency in government operations. Extending this option through next December will prevent disruptions to local government during future surges in COVID transmission, and give communities the ability to implement public engagement strategies on a more sustainable basis.
Community Preservation Trust Fund
We support Section 167 in S. 2915 to direct the Comptroller to transfer $20 million to the Massachusetts Community Preservation Trust Fund prior to sending the net surplus for fiscal 2022. The number of CPA communities has reached 187, and this provision would increase the state’s match from approximately 35% to 43%, approximately the same state match percentage as last year. This is a common budget item in times of surplus state revenues, benefiting communities that have adopted higher local property taxes to address environmental and housing challenges.
COLA for Retirees
We oppose Section 52A in H. 4701, which would allow retirement boards that have accepted Section 103 of Chapter 32 to award a cost-of-living-adjustment of up to 5% to retirees, rather than the current limit of up to 3%. While we can appreciate the interest in this provision, we oppose this section due to its considerable negative impact on municipal budgets. Most communities in the state participate in regional pension systems, and do not have direct decision-making authority regarding adoption of a higher COLA, and we are aware of no system that has incorporated higher COLAs into their unfunded pension liability calculations. Adoption of a higher COLA, even if limited to one year, would permanently increase the pension obligations for all participating communities, requiring increased annual appropriations to fund the cost. The increase in unfunded pension liabilities would be substantial, compounding pension funding challenges as assets are being impacted by declining performance in equity and fixed-income investment portfolios due to long-range economic concerns.
Summary
In H. 4701 and S. 2915, you and your colleagues in the House and Senate have demonstrated thoughtful consideration and strong support for municipal needs and priorities, and we again express our appreciation to you for your ongoing partnership with cities and towns.
This is a critical time for the Commonwealth, as cities and towns across the state continue to manage operating budgets with very little room for margin. Inflation is at a 50-year high. Local revenues are capped and have been squeezed by the pandemic. Federal ARPA funds can only be responsibly dedicated to one-time capital or economic recovery investments, not to ongoing operations. In order to deliver the essential local services that anchor our economy, cities and towns are relying on Unrestricted General Government Aid, Chapter 70 school funding, and the key municipal and school priorities outlined above.
If you have questions or need additional information, please do not hesitate to contact us at any time. Your office can reach out to me or MMA Senior Legislative Analyst Jackie Lavender Bird at jlavenderbird@mma.org or MMA Legislative Director Dave Koffman at dkoffman@mma.org at any time.
Thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.
Sincerely,
Geoffrey C. Beckwith
MMA Executive Director & CEO
Cc:
The Honorable Ronald J. Mariano, Speaker of the House
The Honorable Karen E. Spilka, Senate President