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Our members are the local governments of Massachusetts and their elected and appointed leadership.
With nearly a week left before the administration’s fiscal 2024 state budget filing deadline, Gov. Maura Healey released critical local aid account information today.
Healey’s proposal would increase the main discretionary local aid account by 2% over fiscal 2023 levels, while increasing Chapter 70 school aid by $586 million, honoring commitments made in the 2019 Student Opportunity Act. The governor also released her proposed numbers for charter school reimbursements, special education, school transportation accounts, rural school aid, library aid, and other local programs.
• See Division of Local Services preliminary fiscal 2024 Cherry Sheet aid amounts for individual cities and towns
• See Division of Local Services preliminary fiscal 2024 Cherry Sheet aid amounts for regional school districts
At the MMA Annual Meeting on Jan. 20, Healey recognized the importance of getting local aid information to municipal officials as early as possible, as communities are already well into their local budget process. The governor’s full budget proposal, known as House 1, is due to be filed by March 1.
“Gov. Healey and Lt. Gov. Driscoll have kicked off the budget season with a fiscal blueprint that recognizes many of the challenges facing cities and towns,” said MMA Executive Director and CEO Geoff Beckwith. “Local officials look forward to working with the Healey-Driscoll administration and the Legislature to build on this proposal to secure vital investments in our schools and essential municipal services, and continue a strong state-local partnership.”
The governor’s budget proposal is the first step in a months-long process. The House and Senate Ways and Means committees are expected to host a budget hearing in mid-March on municipal and school aid for fiscal 2024, and the House will debate its budget bill in April, with the Senate deliberating its own bill in May. The Legislature will work to get a final budget bill to the governor by the beginning of the fiscal year on July 1.
Unrestricted general government aid
Healey is proposing a $24.6 million increase (2%) in the Unrestricted General Government Aid account, slightly higher than the 1.6% consensus forecast for state tax revenue growth announced in January. The MMA will be working closely with lawmakers to build on this proposal and secure a higher level of UGGA aid to maintain essential municipal services.
“With inflation running far higher than 2%, communities will need a larger increase just to maintain existing programs and services,” Beckwith said.
The governor’s budget recommendation would continue implementation of the funding schedules in the Student Opportunity Act, bringing Chapter 70 school aid up to $6.58 billion. 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.
An initial examination of the proposal, however, indicates that 119 of 318 operating districts (37%) would receive only the minimum $30 per-student increase in the Student Opportunity Act. The Legislature set minimum aid at $60 per student in the fiscal 2023 budget, and the MMA will continue to strongly advocate for minimum aid of $100 per student to ensure that all districts can at least keep pace with inflation and maintain their school services.
Healey’s proposal includes a special $10 million reserve fund to provide relief to districts whose municipalities have been disproportionately impacted by increases in required local contributions under the Chapter 70 formula.
• See DESE’s calculation of fiscal 2024 Chapter 70 aid and Net School Spending requirements for individual cities, towns and regional school districts based on House 1 (including preliminary fiscal 2024 charter school assessments and reimbursements)
Charter school reimbursements
The governor’s budget would level-fund charter school reimbursements at $243 million, intended to meet the state’s statutory obligation to mitigate Chapter 70 losses to charter schools as outlined in the Student Opportunity Act.
While the proposed budget may meet the requirement, the MMA maintains that it does not solve the serious flaws in the overall 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 the vast majority of public schoolchildren,” Beckwith noted. “Major problems will continue unless a true resolution of the charter school funding problem is achieved, which is a top MMA priority.”
Special education circuit breaker
The governor’s budget would add $63 million to fund the Special Education Circuit Breaker program at $503 million. The Student Opportunity Act expanded the special education circuit breaker by including out-of-district transportation, an important enhancement for cities and towns. With concerns rising about a 14% rate increase for out-of-district special education providers coming on July 1, the administration is continuing to examine funding options to assist local school districts, and the MMA will continue to work with the Executive Office for Administration and Finance and with lawmakers to address this challenge.
Rural school aid
The governor said her budget would provide $7.5 million for Rural School Aid, providing assistance to eligible towns and regional school districts. The grant program helps districts facing the challenge of declining enrollment to identify ways to form regional school districts or regionalize certain school services to create efficiencies.
The MMA sees this as a promising step for rural school aid, and will continue to advocate to build on this progress.
Regional school transportation
The governor would increase funding for regional transportation reimbursements by $14.9 million, or about 18%, to $97 million for fiscal 2024, which would reimburse districts for approximately 90% of local costs.
Out-of-district vocational school transportation
Reimbursements for transportation of out-of-district vocational students would see a significant boost, with the governor’s budget proposing $5.2 million. The same account in fiscal 2023 was funded at only $250,000. The governor’s proposal would reimburse districts for approximately 90% of local costs. This account has been a priority for the MMA.
The governor’s budget would fully fund reimbursements for the transportation of homeless students under the federal McKinney-Vento Act, increasing the account to $28.7 million in fiscal 2024. The impact of this funding level would vary from community to community, depending on the number of homeless families that remain sheltered in local hotels and motels.
The governor’s budget would increase payments-in-lieu-of-taxes by 14% to $51.5 million, which would benefit communities with large amounts of state-owned land. This increase is intended to ensure that no municipality sees a decrease in its overall PILOT payments due to recent valuation changes.
Local aid accounts for public libraries and regional libraries would each receive a 10% increase in the governor’s proposal, bringing public libraries to $17.6 million and regional libraries to $15.9 million.
The governor’s budget includes $12.3 million for the Shannon Community Safety Initiative grant program, which provides grant funding for cities and towns to respond to and suppress gang-related activities.
Municipal regionalization efficiencies incentive reserve
The governor said her budget would include $20.5 million for a Municipal Regionalization Efficiencies Incentive Reserve, which would double the funding for the Community Compact Program. Part of the reserve would be used to support emergency public safety staffing grants ($5 million), the District Local Technical Assistance Fund ($3 million), the Efficiency and Regionalization competitive grant program ($2 million), and the Local Finance Commonwealth Fellowship Program ($500,000).
Municipal transportation grants
The governor said her budget will recommend $100 million for a new Massachusetts Department of Transportation Municipal Partnership grant program. The proposal is a response to calls from municipalities for state support with the design and development of key transportation-related projects. The grants would help communities prepare for or apply for state and federal grant programs, fulfill local match requirements, begin construction, or leverage outside funding sources.
The Municipal Partnership grant account would be funded with a portion of the $1 billion in new revenue generated by the voter-approved 4% tax on incomes above $1 million.