The House yesterday passed a $693 million fiscal 2023 supplemental budget bill that includes conditional funding to address extraordinary special education cost increases, as well as an expansion of the Housing Development Incentive Program.

Major investments in the spending bill (H. 3994) are dedicated to relief for financially strained hospitals and several public employee collective bargaining agreements.

The bill includes $75 million to address extraordinary cost increases in special education for eligible school districts, following a decision made by the Operational Services Division last October that allows out-of-district special education private schools to increase tuition by 14% in fiscal 2024.

It is unclear how many school districts would be able to access these funds to offset the new costs imposed by the OSD decision, as the budget language includes several constraints. First, districts that incur special education instructional costs in fiscal 2024 that exceed 25% of instructional costs in fiscal 2023 would be eligible for reimbursement. Additionally, districts would be reimbursed for 100% of any instructional cost increases exceeding 10% where the total of the increase also exceeds 0.5% of the district’s total actual net school spending in fiscal 2023. Finally, any school district with unobligated Elementary and Secondary School Emergency Relief funds would be ineligible for relief.

The bill would expand the Housing Development Incentive Program, which provides a tool for gateway cities to develop housing through the use of two tax incentives for developers. The House bill would allow the Executive Office of Housing and Livable Communities to authorize up to $30 million in annual HDIP tax credits, an increase from the current cap of $10 million. Further, the bill would allow the housing office to authorize up to $57 million in one-time credits for this calendar year.

The House bill does not include several municipal finance law changes that were included in a supplemental budget bill that was filed by Gov. Maura Healey in March.

The supplemental budget bill now heads to the Senate for consideration.

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