FY24 state budget remains in conference committee

As the state operates on an interim budget for July, a House-Senate conference committee is continuing its work toward a compromise fiscal 2024 state spending plan.

Both the House and Senate budget bills (H. 3901 and S. 2400, respectively) reflect a commitment to a fiscal partnership with municipalities, but there were a series of differences on some accounts affecting cities and towns, and the MMA weighed in to support the higher appropriation in each case.

Unrestricted General Government Aid
The Senate proposed $1.27 billion for the Unrestricted General Government Aid account (1233-2350 and Section 3), an increase of $39.3 million, or 3.2%, over the fiscal 2023 level of funding, and double the increase approved by the House.

With property taxes tightly capped by Proposition 2½, the MMA has been pointing out that cities and towns rely on adequate state revenue sharing — particularly through UGGA — to provide municipal and school services, ensure safe streets and neighborhoods, and maintain vital infrastructure. The MMA has asked the conference committee to support the Senate’s UGGA proposal.

Chapter 70
Both the House and Senate bills would fund Chapter 70 school aid at $6.5 billion, representing a commitment to fund the Student Opportunity Act in line with the originally intended schedule. In addition, both chambers recognized the challenges facing 119 “minimum aid” districts, which would receive only an increase of $30 per student over the previous year under the budget bill filed by the governor in January. Both the House and Senate bills would double the minimum aid increase to $60 per student.

Special education
Both the House and Senate budget bills would fully fund the state’s commitment to the Special Education Circuit Breaker (7061-0012), which reimburses school districts for the high cost of educating students with learning disabilities.

Charter schools
The House and Senate budgets would fully fund the state’s statutory obligation for charter school mitigation payments as outlined in the Student Opportunity Act.

Rural schools
The Senate budget includes a $15 million appropriation for Rural School Aid (7061-9813) to provide assistance to eligible towns and regional school districts. The grants would help schools facing the challenge of declining enrollment to identify efficiencies in school services or opportunities for regional collaboration. The MMA has stated its support for this proposal.

Regional school transportation
The House included $107.8 million for Regional School District Transportation (7035-0006), which represents a 100% reimbursement rate according to the Department of Elementary and Secondary Education’s estimate of fiscal 2024 claims.

Vocational transportation
State law (M.G.L. Ch. 74) requires the state to reimburse cities and towns for the cost of transporting students to out-of-district vocational education programs. The law recognizes the significant expense of providing transportation services, as these students must travel long distances to participate in vocational programs that might not be available locally. For many years, however, this account has been funded at just $250,000, representing a reimbursement rate of just 6% of total claims.

The Senate budget includes a $5.1 million appropriation for out-of-district vocational transportation (7035-0007), a proposal strongly supported by the MMA.

McKinney-Vento
Both the House and Senate budgets would fully fund, at $28.6 million, the mandate to provide transportation for homeless students to their original districts (7035-0008) under the federal McKinney-Vento Homeless Assistance Act. The amount reflects 100% of DESE’s anticipated claims for fiscal 2024.

PILOT
Both the House and Senate bills include an appropriation of $51.5 million to cover a portion of the payment-in-lieu-of taxes (PILOT) amount to cities and towns with state-owned land (1233-2400). This amount would hold communities harmless from recent property valuations, so no municipality would receive less than it did in fiscal 2023.

Fair Share revenue
Revenue from the voter-approved Fair Share Amendment, which took effect on Jan. 1 of this year, offers unique opportunities for funding additional education and transportation programs in fiscal 2024. The House and Senate bills both include the following Fair Share proposals of note for municipalities.

The Senate budget includes $100 million in supplemental aid to support the construction and maintenance of municipal roadways, with at least half of the funding distributed based on each municipality’s total share of road mileage. Municipalities are responsible for more than 30,000 miles of roads, or nearly 90% of all road miles statewide. The Senate’s proposed funding would help communities quickly address immediate safety needs on local roadways.

The House budget includes $100 million for a grant program administered through the DESE to provide financial support to K-12 districts to install or maintain clean energy infrastructure. The Green School Works program would further invest in schools, while helping to support local climate action and promoting energy efficiency.

The Senate budget includes $100 million in supplemental grants for school construction projects already approved for financing by the Massachusetts School Building Authority. This funding would address significant and unanticipated cost escalations in recent years that are having an adverse impact on previously approved MSBA projects.

The House budget includes $161 million to codify the universal school meals program, which would provide free lunches at public schools for all students, regardless of household income. The state has worked hard to extend the free school lunch program that began during the COVID-19 pandemic, and the House bill would make the program a permanent fixture across school districts in Massachusetts.

Community Preservation Trust Fund
An outside section in the Senate bill (Sec. 75) would direct the comptroller to transfer $30 million to the Massachusetts Community Preservation Trust Fund prior to sending the net surplus for fiscal 2023 to the state’s stabilization fund. Some 195 municipalities have adopted the Community Preservation Act, and the Senate provision would provide much-needed stability to the Community Preservation Trust Fund. The deposit proposed by Section 75 is common during times of surplus state revenues, and the MMA argues that it would greatly benefit communities that have adopted higher local property taxes in order to address environmental and housing challenges.

MassHealth crossover payments
Outside Section 34B in the House bill would provide financial relief for emergency medical service providers for the transport of patients who are eligible for both Medicare and MassHealth. The section would provide “MassHealth crossover” reimbursements for dual-eligible transports, which would provide additional assistance to emergency medical services providers to support ongoing efforts to recruit and retain staff. The MMA has partnered with the Fire Chiefs of Massachusetts, Professional Firefighters of Massachusetts, and the Massachusetts Ambulance Association in support of this provision in the House budget.

Lottery proceeds
An outside section of the House’s budget bill would expand the Massachusetts State Lottery to authorize internet-based games, or an “iLottery,” with proceeds from the new platform benefiting early education and care.

While the MMA appreciates the interest in expanding Lottery operations to compete in a rapidly changing market, the association is strongly urging legislators to ensure that all proceeds continue to solely support cities and towns through Unrestricted General Government Aid. The MMA argues that diverting future Lottery proceeds to other programs would weaken the funding base for the state’s primary local aid account.

The Lottery generated $1.105 billion in net proceeds in the most recently completed fiscal year (2022), according to the State Lottery Commission, which supported 94.6% of the state’s annual appropriation for UGGA.

The Senate budget bill did not include a provision to expand the Lottery platform.