House approves $40.3B state budget for FY18

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On April 25, the House approved a fiscal 2018 state spending plan that largely stayed within the bounds of the $40.3 billion recommendation that the House budget committee released earlier in the month.
The House-approved budget includes $1.062 billion for the main municipal aid account, as proposed by the governor in January and recommended by the House Committee on Ways and Means. This would mark the third year that Unrestricted General Government Aid is tied to the growth rate in the “consensus” forecast for state tax collections, adopted annually by the administration and the Legislature (in this case, 3.9 percent). The MMA has made this approach to funding municipal aid a top priority to help cities and towns balance local budgets.
The House budget would increase Chapter 70 education aid by $106.4 million next year, to $4.73 billion, to fund the basics of the state’s main school funding law and begin the implementation of recommendations from the Foundation Budget Review Commission to update spending standards used to determine required local contribution and school aid amounts. The House budget added $15 million to the governor’s recommendation by moving more quickly to update the spending standards and by increasing the minimum new aid amount from the $20 per student proposed by the governor to $30 per student. Most school districts are slated to receive the minimum new aid amount next year.
With concerns mounting about revenues as fiscal 2017 draws to a close and the new year approaches on July 1, House members did not add much spending over the two days of budget debate. Of the 1,210 amendments filed to add spending or change state law, about $75 million was added to the bottom line, mainly to fund special projects and programs across the state.
For local government, the House-approved amendments added about $7.5 million, including an increase of $1 million for the Shannon Anti-Gang Grant Program, $2.2 million for prison mitigation grants, and $500,000 in special school aid for municipalities hosting military facilities and families.
The House did approve a number of amendments to change state law, including adopting a provision supported by the MMA to protect local authority to set ambulance fees, and to raise the cap on the state Conservation Tax Credit Program intended to encourage landowners to donate land for conservation purposes.
The House did not approve an amendment supported by the MMA to fully fund mitigation payments due to cities and towns to cover a portion of school aid deducted to pay tuition to charter schools. According to recent preliminary estimates from the Department of Elementary and Secondary Education, reimbursements next year will be underfunded by $76 million and will cover only a portion of the first year of the six-year mitigation payment schedule.
The MMA has argued that the current system of financing charter schools harms some of the most vulnerable and challenged school districts in the state.
The House did not approve amendments to fully fund or add funding to a variety of other underfunded programs, including special education “circuit breaker” reimbursements, several student transportation reimbursements, and the Cherry Sheet payment-in-lieu-of-taxes (PILOT) program.
Budget activity now moves to the Senate, where its budget committee is expected to release a recommendation in mid-May for debate before Memorial Day. Any differences between the House and Senate budget bills will be reconciled by a conference committee, with the goal of getting a final legislative budget to the governor by the July 1 start of the fiscal year.