House-Senate budget differences headed to conference committee

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The House and Senate have each approved budget bills for next year, with some important differences in local government accounts and on policy issues that will have to be resolved by a six-member conference committee.
 
With state finances more stable this budget season than over the past two years, some of the concern about funding levels for state and local government programs has diminished a bit, and in some cases there is an opportunity for growth. Last year at this time, state collections were falling almost half a billion dollars behind the forecast. This year, collections through the end of April are about $800 million ahead of the target.
 
Policy differences in the House and Senate fiscal 2019 budget bills include some controversial issues that affect cities and towns, including Senate-approved updates to the Community Preservation Act fee schedule, a provision to establish a new car rental fee to help fund the municipal police training program, and a measure that would prohibit state and local law enforcement agencies from cooperating with federal immigration authorities. The House is acting on a police training program funding plan in separate legislation.
 
The Senate’s budget bill would also increase the cap on hours that post-retirement public employees can work from 960 hours to 1,200 hours.
 
The Senate bill also includes a section, added through amendment by Sen. Patricia Jehlen and others, that would prohibit the Board of Education from approving an application for a charter school before a report has been presented on the financial impact to the local public school district. This provision, supported by the MMA, would also prohibit the board from approving any new charter schools or proposed expansion of existing schools in any years that the Legislature fails to fully fund mitigation payments.
 
Both the House and Senate bills have proposed substantial funding for dozens of special projects and programs in individual cities and towns.
 
After working through almost 1,200 proposed amendments over three days, the Senate wrapped up debate on its $41.5 billion spending plan just after midnight on May 25. The $41 billion House version of the budget was approved on April 26. The Legislature’s goal is to get a spending plan to the governor before the fiscal year begins on July 1.
 
Local aid
Both the House and Senate bills would fund the main municipal aid account (Unrestricted General Government Aid) at $1.1 billion, the same amount recommended by the governor. The stability in the UGGA number throughout the budget process has helped cities and towns minimize revenue uncertainty and finalize local spending plans on time. Lottery and other gaming revenue cover most of the proposed distribution.
 
The House and Senate head into conference committee with some differences in calculating Chapter 70 local contribution and school aid amounts. In both branches, the Chapter 70 appropriation would cover the basics of the law by ensuring that all districts are able to reach the current “foundation” level of spending and providing minimum new aid of $30 per student. Most districts are minimum aid districts.
 
Beyond the basics, both branches would continue, for a second year, to implement the recommendations of the Foundation Budget Review Commission to update the “foundation budget” spending standard, a move supported by the MMA and school groups.
 
The House and Senate take the same approach to how the factors for school employee benefits (mainly health insurance) and special education are accounted for. The 2015 Foundation Budget Review Commission report found that the spending standard used by the state significantly underestimated these factors.
 
The governor also had proposed to update the foundation budget in his budget plan, although less quickly than the House and Senate plans.
 
The Senate adopted a new method for the limited English Language Learner factor that would increase school aid in districts with high numbers of ELL students.
 
The House budget would increase Chapter 70 school aid by $124.6 million to $4.87 billion. The Senate would increase Chapter 70 by $147.7 million. Part of the higher school aid in the Senate bill is the proposal to pay 100 percent of equity-based aid amounts rather than the 92 percent approved by the House.
 
The Chapter 70 calculation differences mean that school aid and local contribution amounts in every school district are almost sure to be different from the amounts based on the governor’s budget, filed in January.
 
In addition, House and Senate negotiators will have to sort out – much like last year – different approaches taken to addressing the concerns of cities and towns about the new method of counting low-income students. Both branches have set aside $12.5 million for this purpose.
 
The Senate budget plan would provide $318.9 million for the special education “circuit breaker” program, a $37.7 million increase above the fiscal 2018 appropriation. This important initiative, proposed by Senate Ways and Means Committee Chair Sen. Karen Spilka in the committee’s recommendation and supported by the MMA, is expected to fully fund the state’s statutory commitment for high-cost special education services. This is a vital program that every city, town and school district relies on to fund state-mandated services.
 
The House appropriated $300.3 million for the special education “circuit breaker.” Both branches have approved $12.5 million in supplemental appropriations for fiscal 2018 that would bring funding closer to the full funding mark.
 
The Senate would increase funding by $19.5 million to $100 million for the state’s statutory commitment under charter school law to temporarily reimburse local school districts for a portion of assessments used to pay tuition to charter schools. The state last fully funded this account in fiscal 2014. The House appropriated $90 million. Full funding for fiscal 2019 would require an estimated $171.6 million.
 
The Senate appropriated $1.7 million more for payments in lieu of taxes to ensure that no city or town faces reduced payments next year as the result of valuation changes.
 
The Senate, through an amendment by Sen. Anne Gobi and others, appropriated $68.9 million to reimburse regional school districts for the cost of transporting students. The House appropriated $63.5 million.
 
For most other local government accounts, the House and Senate would appropriate the same or similar amounts.
 
The Senate budget includes a provision, supported by the MMA, that would adjust the fee schedule that funds Community Preservation Act matching payments made to cities and towns that have adopted the CPA. The adjustment is intended to supplement the CPA Trust Fund to maintain payments at a sustainable level as new cities and towns join the program.