House approves $58B state budget bill for FY25

The House of Representatives today approved a $58 billion state spending plan for fiscal 2025 that would increase the main discretionary local aid account by 1% over the current year, while significantly increasing Chapter 70 school aid, in part by raising minimum new aid to $104 per pupil.

The House’s budget bill would also use funds from the Fair Share income surtax to support supplemental local road and bridge funding.

The House spent three days on its budget debate, after consolidating nearly 1,500 proposed amendments into seven categories.

UGGA
The House adopted the recommendation of the House Committee on Ways and Means for a 1% increase in Unrestricted General Government Aid, which would increase the account by $12.7 million over fiscal 2024.

The MMA maintains that the House’s proposed increase does not reflect the fiscal realities facing cities and towns in the current economic climate, and will continue to advocate for a larger increase as the budget process continues.

Chapter 70
The House budget would increase Chapter 70 education aid by $271 million over the current fiscal year, for a total of $6.86 billion. The House budget would continue to fund the Student Opportunity Act on its intended schedule.

In recognition of the challenges faced by minimum-aid-only school districts, the House provided $37 million of surtax revenue to raise the minimum new aid amount from $30 per student to $104. This strong statement by the House will benefit 228 of 318 public school districts. This increase to Chapter 70 minimum aid is a top priority for cities and towns, and this investment would have a tremendous impact on schools across the Commonwealth.

Charter schools
The House included $199 million for charter school mitigation payments, which would cover 100% of the state’s statutory obligation as outlined in the Student Opportunity Act.

Special Education Circuit Breaker
The House budget includes $492 million for the Special Education Circuit Breaker account, matching the governor’s budget proposal. While this is a slight decrease from fiscal 2024, both budget plans look to leverage $75 million included in the fiscal 2023 closeout supplemental budget to fully fund the state’s obligation.

Rural school aid
The House budget includes $7.5 million for rural school aid for eligible towns and regional school districts, which is half of the amount included in the state budget for the current year.

The rural schools grant program helps districts facing declining enrollments to identify ways to form regional school districts or regionalize certain school services to create efficiencies.

The MMA will continue to advocate for fulfilling the recommendations of the Commission on the Fiscal Health of Rural School Districts last July to fund this account at $60 million.

School transportation
The House budget would fund regional school transportation aid at $99.7 million, an increase of $2 million over the current year. This amount represents approximately 84% of anticipated claims, according to the most recent estimates from the Department of Elementary and Secondary Education.

The budget would level-fund the account for transportation of homeless students under the federal McKinney-Vento program at $28.6 million, representing approximately 71% of estimated claims.

The House budget does not have a line item for out-of-district vocational transportation, which was funded at $1 million for fiscal 2024.

PILOT
Matching the governor’s proposal, the House bill would fund payments-in-lieu-of-taxes (PILOT) for state-owned land at $51.8 million, an increase of $334,000. This amount is expected to hold communities harmless from recent valuations.

Electronic Lottery
An outside section in the House bill would authorize an online Lottery (iLottery), with $75 million of the resulting new revenue targeted to early education programs.

The MMA continues to advocate for online Lottery proceeds to be solely used for the Lottery’s intended purpose, which is funding the Commonwealth’s revenue sharing through Unrestricted General Government Aid. This is consistent with the Lottery’s mission and is necessary to protect a vital revenue stream that accounts for the overwhelming amount of discretionary local aid that cities, towns and taxpayers rely on to fund essential municipal and school services and balance local budgets.

Disaster Relief and Resiliency Fund
The House included an outside section that would establish a permanent Disaster Relief and Resiliency Fund to provide relief to municipalities impacted by extreme weather events. A separate section would direct the state’s comptroller to transfer $14 million from any consolidated net budget surplus for fiscal 2025 to the Disaster Relief and Resiliency Fund.

Surtax investments
Fiscal 2025 is the second year that revenue from the Fair Share amendment surtax will be allocated.

The House bill would use $1.3 billion to invest in education and transportation needs, including the following:
• Supplemental local road and bridge funding: $25 million — separate from the annual Chapter 90 bond authorization
• Green School Works: $10 million for a grant program launched in fiscal 2024 to provide financial support to public school districts to install or maintain clean energy infrastructure (administered through DESE)
• Universal School Meals: $190 million to continue the Universal School Meals program, which allows all Massachusetts students to eat for free at school, regardless of household income

Next steps
The state budget process now moves to the Senate, where the Ways and Means Committee is expected to release its recommendation in early May, and debate and adoption are expected later in the month.

The House and Senate will then need to reconcile their two budget plans before sending a final bill to the governor for her consideration by the beginning of the fiscal year on July 1.

During the remainder of the budget process, the MMA will work to build on the progress in the House’s proposal by advocating for a greater increase in Unrestricted General Government Aid, maintaining the increase in Chapter 70 minimum aid, increasing supplemental funding for local roads and bridges, and protecting local aid with regards to iLottery proceeds.