From The Beacon, June 2012

Just days ago, members of the Senate passed a state budget that embraces local aid as a top priority. Municipal officials are grateful for the leadership of Senate President Therese Murray, Ways and Means Chair Stephen Brewer, and the entire Senate for adopting an outstanding fiscal 2013 spending plan that boosts municipal and education aid accounts by $130 million more than the budget submitted by the governor in January. This is remarkable progress during difficult fiscal times.

The Senate budget, adopted on May 25, funds the Unrestricted General Government Aid account at $900 million, increasing the base appropriation on the Cherry Sheet by $66 million. In January, the governor proposed level-funding UGGA at $834 million and perhaps providing a later supplemental distribution of $65 million in October if the state ends fiscal 2012 with a surplus. But state revenues so far this year are not meeting expectations, and the $65 million is not guaranteed under the governor’s plan. Recognizing that cities and towns need more, and need certainty, the Senate-passed budget would add $66 million to the guaranteed base so that cities and towns can make full use of the funds for ongoing operations and essential services in their fiscal 2013 budgets.

The House voted to increase UGGA by $65 million in April, so at this point municipal officials can be confident that their unrestricted municipal aid will increase by at least $65 million when the final budget is signed into law by July 1. The number may be $1 million higher if the Senate prevails during conference negotiations.

After a municipal aid reduction of nearly $500 million since fiscal 2009, this increase is vitally needed to allow cities and towns to maintain municipal services and avoid higher reliance on the property tax.

Lawmakers in the Senate and House know that projected state Lottery revenues are exceeding previous expectations, and that the base amount of unrestricted municipal aid must increase for cities and towns to receive all of their Lottery dollars, as intended in state law. Lottery receipts are now expected to exceed the $834 million aid amount originally proposed in the administration’s January budget proposal. Without the increase that the Legislature is providing, millions of dollars of Lottery revenues would be diverted to the state’s general fund, instead of flowing directly to cities and towns, where they belong.

City and town leaders also applaud the Senate’s vote to increase Chapter 70 aid by $180 million, instead of the $145 million originally offered in the administration’s budget in January. The Senate budget would adopt the House-passed commitment to increase education aid for every community and school district by at least $40 per student and would provide an additional boost to more than 100 communities and districts by funding a portion of “target aid” for high-property-tax-reliant districts, a program that was suspended in 2008 due to the recession. Target aid originated in the Senate many years ago, and their budget renews the initiative.

The Senate also voted to add $29 million to the special education “circuit breaker” account to fully fund the state’s statutory 75 percent share of eligible costs. This is a key education account, and full funding is a powerful statement of support for every community and school district. When this account is underfunded, communities must divert other municipal resources away from valuable programs. Full funding of the special education “circuit breaker” leverages dollars that can be devoted to important school and municipal services.

During the budget debate, senators also protected cities and towns from new mandates and negative policy proposals. For example, senators rejected an amendment that would have earmarked UGGA funds to pay the state’s 50 percent share of the Police Incentive Pay Program. Under this flawed amendment, the state’s Quinn Bill share would be paid with existing local aid, which would then force every participating city and town to appropriate a matching amount from local property taxes, completely undermining the recent Supreme Judicial Court decision that determined that cities and towns do not have to make up or match the state share unless a local contract requires them to do so. The amendment would have effectively imposed a completely unaffordable $50 million unfunded mandate on cities and towns.

The bottom line is that the Senate has now made a powerful statement about the importance of cities and towns to our state’s economic recovery, and lawmakers in each branch have passed budgets that actively invest in local aid to strengthen communities.

There are some differences between the House and Senate budgets that will need to be worked out over the next several weeks, as legislative leaders from each branch meet in a conference committee to reach agreement before the start of the fiscal year on July 1.

Three items will immediately rise to the surface. First, the House budget would add $11.3 million to fully fund the unfunded state mandate for homeless student transportation costs triggered by state acceptance of the federal McKinney-Vento Act. The Senate budget provides a process for the Department of Elementary and Secondary Education to certify the cost of complying with the mandate, but no funds. The MMA will be advocating for funding this unfunded mandate.

Next, while both the Senate and House would expand and add funds to the Community Preservation Act, the House would provide $25 million each year from the previous year’s state surplus, while the Senate would provide $5 million from the state’s general fund. The MMA will be advocating for the higher amount, because of the demonstrated need.

Third, the Senate would provide $29 million more for the special education “circuit breaker,” while the House boosts spending by $9 million.  Both plans are substantially higher than the administration’s level-funding proposal in January. Of course, the MMA will be pressing for full funding of the circuit breaker program, as every community needs these funds.

But there are far more similarities than differences in the House and Senate budgets, which is a good reason for local officials to be optimistic that budget conferees will do their level best to maximize local aid in the final budget agreement.

A strong state-local fiscal partnership is essential for the future of Massachusetts, and local leaders now know that next year’s state budget will maintain and build on that partnership.

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