Gov. Charlie Baker today submitted a $44.6 billion state budget plan for fiscal 2021 with the Legislature, a blueprint that would increase overall expenditures by 2.3% as the state deals with slowing revenue growth.

Once again honoring a pledge he made at the beginning of his administration, Gov. Baker’s budget would increase the main discretionary local aid account, Unrestricted General Government Aid, by 2.8% ($31.6 million), the same rate as the expected growth in state tax revenue. This state-local revenue sharing framework is significant for cities and towns.

Visit the Division of Local Services website for preliminary fiscal 2021 Cherry Sheet aid amounts for each community

Fulfilling the commitments made in the new Student Opportunity Act, the governor’s fiscal 2021 budget submission would bring Chapter 70 school 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 some communities, but an initial look at the budget indicates that a large percentage of cities, towns and 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 aid, and the MMA will continue to strongly advocate for significantly higher minimum aid throughout the budget process.

Visit the Department of Elementary and Secondary Education website to see calculations of fiscal 2021 Chapter 70 aid and net school spending requirements for each school district based on the governor’s budget, as well as preliminary fiscal 2021 charter school assessments and reimbursements

Charter school finance
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 to charter schools. However, this appropriation does not include $15 million in special charter school reimbursement payments included in the fiscal 2020 budget to address significant hardships, such as excess losses to charter schools that result in a net cut in Chapter 70 aid for the public school system (non-charters).

The Student Opportunity Act pledges to phase in full funding of the statutory reimbursement formula over three years, and while the governor’s plan may meet that requirement, 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.

Regional school 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 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 those communities that continue to provide transportation to many students may continue to see shortfalls.

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.

Overall, the governor’s budget (House 2) would restrain most spending across the board and place an estimated $310 million into the state’s rainy day fund. 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.