Gov. Charlie Baker signs the FY23 budget at the State House on July 28. Looking on are Lt. Gov. Karyn Polito (far left) and Secretary of Administration and Finance Michael Heffernan (far right). (Photo courtesy Joshua Qualls/Governor’s Press Office)

Gov. Charlie Baker today signed the $52.7 billion state budget bill for fiscal 2023, which increases unrestricted local aid by 5.4% over fiscal 2022 and boosts Chapter 70 education aid by $495 million.

Overall, the budget, enacted by the Legislature on July 18, represents an increase of 9.3% over the fiscal 2022 budget. The governor vetoed just $475,000 in gross spending and signed 153 of the budget bill’s 194 outside sections.

The budget increases Unrestricted General Government Aid to $1.23 billion and Chapter 70 aid to $6 billion for fiscal 2023.

There’s also a $67 million increase for the Special Education Circuit Breaker account, an additional $89.2 million for charter school mitigation payments, and an increase of $10 million for Payments-in-Lieu-of-Taxes for state-owned land.

The budget forecasts a $1.5 billion deposit in the state’s Stabilization Fund, which would bring the total balance to $8.4 billion, an all-time high.

The governor returned outside Section 134, which would give local retirement boards the option to increase cost-of-living adjustments by up to 5% — above the standard cap of 3%. The governor’s amended language addresses two concerns (shared by the MMA). The COLA decision would be made by a retirement board, but the cost would be borne by the participating municipalities and other entities, so the governor proposed language to ensure that municipalities are given appropriate authority to accept or reject the COLA decision. The governor’s proposed language also would clarify that the potential 3% to 5% increase would apply only on the approved base, not the entire pension.

The governor also returned outside Section 174, which would direct the state comptroller to transfer $20 million of the fiscal 2022 budget surplus to the Massachusetts Community Preservation Trust Fund. The governor’s amendment would keep the $20 million for the trust fund, and would add a $10 million transfer to the Mass Life Sciences Investment Fund. The $20 million for the Community Preservation Trust Fund would increase the state’s match for CPA communities from an estimated 35% to 43% (about the same as fiscal 2022).

The Division of Local Services has published local aid estimates for cities, towns and regional school districts based on the budget signed by the governor.

The state has been operating on a 30-day temporary budget since the fiscal year began on July 1.

Chapter 70
On education aid, the budget makes a strong commitment to fund the Student Opportunity Act according to the original intended schedule. In addition to keeping the commitment to fund the SOA, and in recognition of the challenges facing 135 “minimum aid” districts that would have received only a $30 per student increase over the previous year, the budget doubles the minimum aid increase to $60 per student.

Special Education Circuit Breaker
The budget includes $441 million for Special Education Circuit Breaker, which reimburses school districts for the high cost of educating students with disabilities.

The Student Opportunity Act expanded the circuit breaker by including out-of-district transportation, to be phased in over three years. The fiscal 2023 budget reflects years two and three of the schedule in the Student Opportunity Act, achieving full funding one year ahead of schedule.

Charter School Mitigation Payments
The budget includes $243 million for charter school mitigation payments, which funds 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 ahead of schedule.

School transportation
The budget level-funds regional school transportation at $82.1 million, representing a reimbursement rate of 85% of fiscal 2023 costs as estimated by the Department of Elementary and Secondary Education.

The budget fully funds the McKinney-Vento account for transportation of homeless students at $22.9 million, and level-funds out-of-district vocational transportation at $250,000.

The budget funds Payments-in-Lieu-of-Taxes for state-owned land at $45 million, a 29% increase. This account has been a key MMA priority for many years, as inadequate funding creates a significant hardship for smaller communities with large amounts of state-owned property. This year’s increase is an important boost.

Rural School Aid
The budget includes $5.5 million for Rural School Aid to provide assistance to eligible towns and regional school districts. The grants will help schools facing the challenge of declining enrollment identify ways to form regional school districts or regionalize certain school services to create efficiencies.

Correction: An earlier version of this story had an incorrect number for the Chapter 70 increase. It is $495 million.

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