The fiscal 2021 state budget bill filed by Gov. Charlie Baker on Jan. 22 would fund the main municipal and school aid accounts consistent with recent legislative commitments.

The budget plan adheres to the administration’s revenue-sharing practice, in place since 2015, to increase the main discretionary local aid account at the same rate as the projected growth in state revenues, and meets the school funding schedules included in the Student Opportunity Act enacted last November.
Most other aid accounts were level-funded.

The Legislature has scheduled eight hearings on the governor’s budget plan across the state this month and in March, focused on different agencies and categories of spending. The hearing on education and municipal aid is set for March 6 in Malden.

The House is expected to take up the budget bill in mid-April, with a Senate version of the budget expected in May. The fiscal year begins on July 1.

The Department of Revenue’s Division of Local Services and the Department of Elementary and Secondary Education have each posted on their websites the municipal and school aid amounts for individual cities, towns and regional school districts based on the governor’s recommendation. These estimates are used to help develop local spending plans and are updated by the DLS based on any changes adopted by the House and Senate later in the state budget process.

The DESE worksheets include detailed numbers for Chapter 70 local contribution and aid calculations and for how charter school mitigation payments are calculated.

Unrestricted General Government Aid
The governor’s budget would increase Unrestricted General Government Aid by 2.8% ($31.6 million). This state-local revenue sharing framework provides cities and towns with steady annual increases in flexible revenues funded mainly by Lottery and gaming receipts. Annual increases reflect the long-term growth in the economy and in revenues available for the state budget.

Chapter 70
The governor’s fiscal 2021 budget would bring Chapter 70 education aid up to $5.48 billion, an increase of $303.5 million (5.9%). This would fund the first year of the seven-year plan to add $1.5 billion in new state funding for K-12 education.

The majority of the funds would implement improvements to the foundation budget, adding weight for low-income students, English Language Learners, special education costs, and school employee health benefits.

This is important progress for many cities and towns, but an initial look at the budget plan indicates that about half of cities, towns and regional school districts would remain minimum-aid-only and receive just $30 per student in new aid. For the past several years, MMA members from across Massachusetts have unanimously adopted resolutions calling for at least $100 per student in minimum new aid, and the MMA will continue to strongly advocate for significantly higher minimum aid throughout the budget process.

Charter school mitigation
The governor’s budget would increase the charter school reimbursement account to $138.2 million, intended to meet the commitment in the Student Opportunity Act to fund 75% of the state’s 100-60-40 statutory obligation to mitigate Chapter 70 losses paid as tuition to charter schools.

The new education law pledges to phase in full funding of the statutory reimbursement formula over three years, but it would not fix what the MMA contends are serious flaws in the charter school finance system.

“Charter schools will continue to divert a high percentage of Chapter 70 funds away from many municipally operated school districts, and place greater strain on the districts that serve 96% of public schoolchildren,” said MMA Executive Director Geoff Beckwith. “Major problems will continue unless a true resolution of the charter school funding problem is achieved, which is a top MMA priority.”

Special education
The governor’s budget would add $17.4 million to fund the Special Education Circuit Breaker program at $362.5 million, an increase of 5%. The Student Opportunity Act expanded the Special Education Circuit Breaker by including out-of-district transportation, a change supported by cities and towns. This new transportation component is being implemented over four years, and the governor’s budget proposal includes the 25% phase-in amount for the coming year.

Student transportation
Gov. Baker’s budget would level-fund regional transportation reimbursements at $75.8 million. The MMA argues that this would be a hardship for virtually all communities in regional districts. Reimbursements for transportation of out-of-district vocational students remains significantly underfunded at $250,000. Increasing these accounts is a priority for cities and towns and the MMA.

The governor’s budget would level-fund reimbursements for the transportation of homeless students under the federal McKinney-Vento program, at $11.1 million. The impact of this funding level will vary from community to community, depending on the number of homeless students requiring out-of-district transportation.

PILOT
The governor’s budget would level-fund the Payments-in-Lieu-of-Taxes account at $30 million, which the MMA contends would be a hardship for many smaller, rural communities with large amounts of state-owned land. This is a key account due to the major impact that PILOT payments have on budgets in very small communities.

Overview
The governor’s $44.6 billion state spending plan for next year would increase overall expenditures by 2.3% over the projected level of fiscal 2020 spending. The plan would restrain most spending across the board and place an estimated $310 million into the state’s rainy day fund at the end of the year.

The budget relies on significant one-time revenues of at least $200 million from a sales tax “modernization” proposal and an increase in the tax on transportation network companies.

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