Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
The House and Senate yesterday both approved a $36.5 billion state budget plan for fiscal 2015 that would provide approximately $50 million more in overall funding for municipal and school aid accounts than the budget originally filed by the governor in January.
The Legislature’s final budget bill had been released by a House-Senate conference committee on Sunday.
The governor now has 10 days to decide which items to sign or veto. The state has a temporary budget in place to keep operating in the meantime.
The following are the key accounts for local governments:
UGGA and Chapter 70
The Legislature’s fiscal 2015 budget would increase funding for several key municipal and education aid accounts, including the $25.5 million increase in Unrestricted General Government Aid (to $946 million), and the $99.5 million increase in Chapter 70 education aid (to $4.4 billion) that were included in the Legislature’s local aid resolution in March. These are the same increases adopted by the House and Senate in their respective budgets. (The governor’s budget would have level-funded Unrestricted General Government Aid.)
Special education circuit-breaker
The budget supports full funding for the Special Education Circuit-Breaker Program, using the House’s calculation to arrive at $260.4 million, a $5 million increase over fiscal 2014. The governor had proposed level funding, which would have created a shortfall of about 3.5 percent.
Regional school transportation
The budget plan includes the Senate recommendation to increase regional school transportation reimbursements by $18.7 million, a 36 percent boost over the current year, bringing the account to $70.25 million. The governor had recommended level-funding the program, while the MMA strongly supported the higher funding level, which would bring the state to 90 percent of full funding, the highest level in a generation.
Transportation reimbursements for vocational students
The budget allocates $2.24 million for transportation reimbursements for out-of-district vocational students. The program was funded at $3 million in fiscal 2014, but the governor’s budget would have eliminated the program.
PILOT payments
The budget maintains funding for the payments-in-lieu-of-taxes (PILOT) program at the current level of $26.8 million, which is $500,000 higher than the governor’s original proposal.
Shannon anti-gang grant program
The budget provides $8.25 million for the Shannon anti-gang grant program, a $1.25 million increase to a program that provides essential funding to help cities and towns respond to and suppress gang-related activities.
Safe and Successful Youth Initiative
The budget would fund the Safe and Supportive Youth Initiative at $4.6 million in fiscal 2015. The program seeks to reduce youth violence through services for those most likely to be victims or perpetrators of gun violence.
Community Preservation Act
In recent years, the state’s match for the Community Preservation Act has been significantly underfunded. The fiscal 2014 state budget included a provision to use end-of-year surplus revenue from fiscal 2013 to boost reimbursements by $25 million, breathing new life into the state’s CPA match. Because of lagging deeds excise collections, this money was added to the CPA program to double the state match, from 26 percent to about 50 percent. A similar step is required again this year, or cities and towns that have adopted the CPA will see a much lower state match in fiscal 2015.
The Legislature’s fiscal 2015 budget (in Section 242) would transfer one-half of the “consolidated net surplus” left over from fiscal 2014, up to $25 million, into the Community Preservation Trust Fund. The state’s final fiscal 2014 surplus level will not be determined until September or October, however, so it would still take several months before the state’s CPA match is determined.
School spending equity provisions
The budget includes language (in Section 260) to establish equity in calculating net school spending under Chapter 70 by allowing, at local option, all communities to count health insurance costs for retired school employees in fiscal 2016 and beyond, phased in over four years, and allowing the Department of Elementary and Secondary Education to waive penalties in the meantime.
The MMA argues that this provision is needed because the current rule excludes these costs from net school spending in some districts, but allows the costs to count in others. Communities that have been prohibited from counting retiree health costs in net school spending have been forced to reduce spending municipal services or raise property taxes to make up the difference.
Foundation Budget Review Commission
The Legislature’s budget (in sections 124 and 278) includes an MMA-backed provision to re-establish the Foundation Budget Review Commission, which would examine the adequacy of Chapter 70 funding.
The foundation budget school spending standard that guides Chapter 70 funding was first enacted as part of the landmark 1993 education reform law and has largely remained unchanged since that time, despite the many substantial changes that have occurred in public education over the past 20 years. The MMA argues that the current foundation budget structure understates many key education expenses and does not fully reflect the cost of operating modern school systems, as evidenced by the fact that cities and towns spend $2.1 billion more to run their schools than the amount called for in the foundation budget, and a majority of districts are slated to receive only minimum aid increases in the future.
Charter school and McKinney-Vento reimbursements
The House and Senate state budget plans included identical appropriations for the charter school reimbursement program and state funding for the McKinney-Vento homeless student transportation mandate. Because there were no differences, these appropriations were unchanged in the final budget plan.
The charter school reimbursement program will be fully funded in fiscal 2014, thanks to the recent $27.6 million supplemental budget that the Legislature passed several weeks ago. The Legislature’s fiscal 2015 budget would provide only $80 million next year, however, which will create a $33 million shortfall. The MMA will continue to prioritize this matter.
The budget provides only $7.4 million for the McKinney-Vento requirement to transport homeless students back to their most recent school district, which is $7.5 million below the amount needed to fully fund this state mandate. This, too, will remain a priority issue for the MMA.
Retiree health contribution percentages
The budget (in sections 76 and 77) would extend the existing three-year freeze on changing retiree health insurance contribution percentages by an additional two years, until July 1, 2016, for those communities that made plan design changes or joined the Group Insurance Commission under the 2011 municipal health reform law.
Under existing law, any city or town that used sections 22 or 23 of Chapter 32B (the 2011 municipal health insurance reform law) to implement plan design changes or join the GIC was prohibited from changing retiree health insurance contribution percentages until July 1, 2014. The Legislature’s budget provision would unilaterally extend that freeze for two more years for any municipality that adopted or is planning to adopt provisions of the 2011 municipal health insurance reform, unless the municipality voted to change the contribution rate prior to May 1, 2014. This change would delay the ability of roughly 70 communities to take action on retiree contribution percentages.
The MMA will ask the governor to oppose this section.
Procurement threshold relief
The budget would increase the thresholds for the use of competitive sealed bidding in the procurement of goods and services from $25,000 to $35,000 (in sections 61-66). Below this threshold, cities and towns are required to solicit three written or oral quotes, or use sound business practices for the smallest procurements of less than $10,000. Local officials argue that it is important to make regular adjustments to the specific dollar amounts listed in state statute to keep pace with inflation and to help cities and towns save time and money for small procurements.
• Download a copy of H. 4242, the Legislature’s fiscal 2015 state budget bill