Gov. Charlie Baker speaks to attendees at the MMA Annual Meeting and Trade Show on Jan. 18, 2019.

Gov. Charlie Baker today submitted a $42.7 billion fiscal 2020 state budget plan with the Legislature, proposing a spending blueprint that would increase overall state expenditures by 1.5 percent.

In the face of slowing revenue growth, the governor’s budget bill, known as House 1, would restrain most spending. The administration said the budget relies on “significant” one-time revenues of at least $200 million from a “sales tax modernization proposal.”

As the administration pledged to local officials at the MMA’s Annual Meeting on Jan. 18, House 1 includes a $29.7 million increase in Unrestricted General Government Aid, matching the projected 2.7 percent growth in state tax revenues.

The governor’s plan for Chapter 70 would increase K-12 education aid by $200 million (4.3 percent), though a large percentage of districts would receive only minimum new aid of $20 per student.

The $200 million increase is reflected in separate legislation the governor filed to amend the Chapter 70 school finance law – a seven-year plan to make changes primarily in areas recommended by the Foundation Budget Review Commission in 2015.

An initial look at House 1 indicates that a large percentage of cities, towns and school districts would not benefit from the formula changes in fiscal 2020, and would remain minimum-aid-only, which would present significant challenges for these communities.

At last week’s Annual Meeting, MMA members from across Massachusetts unanimously adopted a resolution calling for at least $100 per student in minimum new aid.

Link to Division of Local Services preliminary fiscal 2020 Cherry Sheet aid amounts for each community

Link to Division of Local Services preliminary fiscal 2020 Cherry Sheet aid amounts for regional schools

Link to the Department of Elementary and Secondary Education’s calculation of fiscal 2020 Chapter 70 aid and Net School Spending requirements for each city, town or regional school district

Download a listing of the governor’s fiscal 2020 UGGA and Chapter 70 numbers for each city, town and school district (76K PDF)

Link to the governor’s budget message

Charter schools
The governor’s budget would increase charter school reimbursements from the current year’s $90 million to $106 million, and would change the schedule for reimbursing districts for a portion of their Chapter 70 aid used to pay tuition to charter schools.

The current statutory six-year funding schedule begins at 100 percent reimbursement in the first year, followed by 25 percent in each of the following five years (though the state has not been meeting these targets and underfunded reimbursements this year by $72 million). The governor proposes a new three-year, 100-60-40 schedule, phased in over three years. His plan would also increase the facilities assessment payments to charter schools, and make other changes.

The MMA’s analysis finds that this restructuring would not fix the charter school finance system, which would continue to divert Chapter 70 funds away from municipally operated school districts and place greater strain on the districts that serve 96 percent of public schoolchildren. The MMA argues that, no matter what changes are made to the Chapter 70 formula, major problems will continue unless a true resolution of the charter school funding problem is integrated into any reform or update of the school finance system.

Special education
The governor’s budget would increase the Special Education Circuit Breaker program by $4.5 million (1.4 percent) to $323.9 million. Because special education costs are expected to rise in fiscal 2020, the governor’s budget would substantially underfund reimbursements.

In a conference call with local officials today, officials from the Department of Elementary and Secondary Education said the House 1 appropriation would result in a 70 percent reimbursement, rather than the statutory 75 percent.

Every city, town and school district relies on the Special Education Circuit Breaker program to fund state-mandated services. The MMA will again be asking lawmakers to ensure full funding in fiscal 2020.

School transportation
House 1 would level-fund regional school transportation reimbursements at $68.9 million, which would create a hardship for virtually all communities in regional districts.

Reimbursements for transportation of out-of-district vocational students would remain significantly underfunded at $250,000.

The governor’s budget would level-fund reimbursements for the transportation of homeless students (McKinney-Vento) at $9.1 million. The impact of this funding level will vary from community-to-community, depending on the number of homeless families that remain sheltered in local hotels and motels. The administration has been successful in reducing the number of homeless students who are dislocated from their original district, but communities that continue to provide transportation to many students may continue to see shortfalls.

PILOT, Shannon grants and library aid
The governor’s budget would level-fund payments in lieu of taxes for state-owned property at $28.48 million, Shannon anti-gang grants at $8 million, and library grant programs at $19.8 million.

The governor’s budget plan would place an estimated $297 million into the state’s rainy day fund.

The filing of House 1 kicks off the annual state budget process, and the numbers are subject to change during the legislative process. The House will debate its own budget plan in April, and the Senate will debate and pass a bill in May, with the goal of having a final state budget in place by the time the fiscal year begins on July 1.