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Our members are the local governments of Massachusetts and their elected and appointed leadership.
Gov. Deval Patrick today filed a $28.2 billion state budget recommendation for fiscal 2011 that would provide $4.98 billion to level fund the main municipal and school aid accounts and ensure that every city, town and school district receives at least the fiscal 2010 level of funding next year.
Thirteen school districts would receive a small school aid increase in order to reach the foundation budget level of spending on education.
The state appropriation for Chapter 70 education aid would increase by $178 million to make up for state fiscal stabilization fund revenues (federal stimulus funds) used to help pay for Chapter 70 in fiscal 2010 and to cover the additional school aid amount.
The Unrestricted General Government Aid account would be level-funded at $936 million, after being cut by $378 million (29 percent) since the beginning of fiscal 2009.
• Link to governor’s budget Web site
• Local aid numbers for individual cities, towns and school districts are available on the Web sites of the Division of Local Services and the Department of Elementary and Secondary Education.
With cities and towns statewide facing large budget gaps next year, the MMA is asking the Legislature to approve a local aid resolution for fiscal 2011 based on the governor’s budget recommendations.
The House is not expected to debate a fiscal 2011 state budget until mid-April, and the Senate customarily takes up the budget in mid-May. The Legislature last approved a local aid resolution in March 2008 for fiscal 2009 municipal and school aid distributions.
When filing his budget bill, the governor also announced proposals to help cities and towns reduce costs. The governor filed legislation (H. 4439) to give cities and towns tightly restricted authority to extend their pension funding schedules by 10 years, to 2040, to protect local taxpayers from unnecessarily high assessments during this time of fiscal crisis. Unless the funding schedules are extended, market losses caused by the recession will trigger steep increases in annual pension payments and force budget cuts to key municipal and school services.
The governor also sent a special message to the Legislature endorsing passage of a limited early retirement incentive for municipal employees as a tool to assist cities and towns in reducing the size of the workforce.
In anticipation of the start of a slow recovery in the state’s economy, the governor’s budget is based on a consensus tax projection of $19.05 billion, an increase of $590 million (just 3.2 percent) over the current projection for fiscal 2010. The consensus estimate represents the agreement reached early each year between the governor’s chief budget officer and the chairs of the House and Senate Ways and Means committees on a tax projection for the next fiscal year.
For fiscal 2011, the governor’s budget also includes $177 million in tax initiatives, some of which would be used to supplement the slumping sales tax amount used to fund the state’s School Building Authority. The new taxes include proposals filed last year to end sales tax exemptions on candy and soda, extend the cigarette excise to cigars and other tobacco products, cap the tax credit for the film industry, and improve state tax collection efforts.
The governor’s budget also relies on another round of temporary non-tax revenues, mainly $175 million from the state’s stabilization fund and $1.4 billion in federal economic recovery funds. The federal dollars include about $600 million in additional Medicaid reimbursements that have been approved by Congress but have not yet become law.
Beyond level-funding the main local aid accounts, the governor’s budget recommendation would treat smaller municipal and school aid accounts in different ways.
The Cherry Sheet Payment-in-Lieu-of-Taxes (PILOT) program would be level-funded at $27.3 million, and reimbursements for veteran’s benefits would increase by $7 million.
The Police Incentive Pay Program (Quinn Bill) would be cut from $10 million to $5 million. Full funding of the state’s 50 percent share of the program would require almost $60 million. The governor filed legislation last October to clarify that municipalities are not liable for the state share of Quinn Bill payments unless they are specifically required to by a collective bargaining agreement. The Legislature has not taken up his recommendation.
The regional library aid account would be cut by $3 million. The governor has proposed to eliminate the cap on minimum spending waivers that the Board of Library Commissions may grant next year.
On the school side, student transportation reimbursements for regional school districts would be level-funded at $40.5 million, which would cover about half of the state’s estimated share of costs.
Special education “circuit breaker” reimbursements would be roughly level-funded at $135 million and would cover an estimated 35-40 percent of eligible costs next year. In a proposed law change in the budget bill, the governor would freeze private school special education tuition rates at the fiscal 2010 level.
The governor would level-fund, at $75 million, reimbursements to municipalities and school districts for a portion of Chapter 70 education aid taken to pay tuition to charter schools. The preliminary Cherry Sheet estimates released by the Division of Local Services with the governor’s budget recommendation project that school aid deductions will total $304 million next year, an increase of $17.6 million. Under these estimates, reimbursements would cover 25 percent of lost school aid.