Yesterday evening, the House-Senate conference committee on the state budget released its compromise fiscal 2022 plan.

Both chambers are expected to pass the $48.1 billion budget bill this afternoon, and Gov. Charlie Baker will then have 10 days to approve the spending appropriations and proposed law changes, or veto or return any items he opposes.

Following months of state tax collections far exceeding expectations, the conference committee bill (H. 4002) reflects an agreement between Senate and House leaders to increase tax collection estimates for fiscal 2022 by $4.2 billion. As a result, several key local aid accounts received the higher of two funding levels in areas where the Senate and House needed to resolve differences.

The bill matches the 3.5% increase in Unrestricted General Government Aid that was included in the governor’s budget proposal, which was filed in January.

The budget would also significantly increase Chapter 70 school aid over fiscal 2021, includes $40 million for a one-time grant program targeting student enrollment decline, and would allocate $350 million for a new trust fund to support the Student Opportunity Act, the 2019 law that will invest an additional $1.5 billion in education aid over a seven-year period.

The Legislature’s budget would increase funding for other major aid programs by adding $220 million to Chapter 70 aid over fiscal 2021; $37 million in additional funds for charter school mitigation payments, and an additional $1 million for McKinney-Vento transportation for homeless students.

The proposal would also provide an increase of $1 million in accounts for public libraries, regional public libraries, and Shannon Grants for violence prevention.

H. 4002 includes a $4 million increase for the Payment-in-Lieu-of-Taxes (PILOT) for state-owned land account.

Chapter 70 and UGGA amounts for each community can be found in Section 3 of H. 4002, beginning on page 316 of the printed version of the budget or on page 328 of the downloadable PDF. Click here to link to the Legislature’s budget bill.

Unrestricted General Government Aid
The conference committee report includes $1.168 billion for Unrestricted General Government Aid, an increase of $39.5 million over fiscal 2021. The 3.5% increase reflects the policy of increasing general municipal government aid by the same rate of growth in the state tax collections as determined by the consensus revenue forecast.

Chapter 70
The Legislature’s budget would increase Chapter 70 aid by $220 million over fiscal 2021, bringing the total to $5.503 billion.

H. 4002 would fund the “goal rates” originally set forth in the Student Opportunity Act, which set a seven-year schedule that was to begin in fiscal 2021 but was sidelined last year due to the public health emergency. To get back on track, the MMA joined with other education advocates to ask the Legislature to fund Chapter 70 at a Student Opportunity Act implementation rate of one-sixth rather than one-seventh in order to return to the intended schedule. The House-Senate local aid agreement included a commitment to fund the Student Opportunity Act increases at one-sixth.

H. 4002 does not include the governor’s proposal to allow communities to use a portion of federal Elementary and Secondary School Emergency Relief funds to satisfy any increase in the required local contribution above the fiscal 2021 amount.

Enrollment decline grants
H. 4002 would provide $40 million for a one-time, targeted grant program for school districts adversely affected by student enrollment decline during the COVID-19 public health emergency. This account may need to be revisited this fall if actual enrollment levels recover more quickly than anticipated, and the amount needed eclipses the $40 million reserve.

Special Education Circuit Breaker
H. 4002 would provide $373 million for the Special Education Circuit Breaker, which reimburses school districts for the high cost of educating students with disabilities. The amount would meet the statutorily required 75% reimbursement rate. This reimbursement rate, as well as the inclusion of costs associated with out-of-district transportation, reflects obligations outlined in the Student Opportunity Act.

Charter school mitigation
To address charter school mitigation payments, H. 4002 includes $154.6 million intended to reimburse school districts at 75%, the rate set forth in year one of the Student Opportunity Act implementation schedule, for costs incurred when students leave to attend charter schools.

Reserve fund for Student Opportunity Act payments
H. 4002 would establish a new $350 million special reserve account to support future funding of the Student Opportunity Act. The act is scheduled to fully phase in over the next six years and provide more than $1.5 billion in new education aid.

School transportation
The Legislature’s budget would level-fund regional school transportation at $82.1 million, while increasing transportation for homeless students under McKinney-Vento by $1 million over fiscal 2021. Out-of-district vocational transportation is level-funded at $250,000.

Rural school aid
The budget plan would fund rural school aid at $4 million. This is an important account for rural school districts, especially those struggling with declining enrollment.

H. 4002 would increase Payments-in-Lieu-of-Taxes (PILOT) for state-owned land to $35 million, a $4 million (12.9%) increase over fiscal 2021. The underfunding of PILOT over the years has created a significant hardship for smaller communities with large amounts of state-owned property.

Shannon grants, cybersecurity and libraries
H. 4002 includes a $1 million increase for the Shannon grants for gang violence prevention and intervention, and includes critical funding for the Mass Cybersecurity Innovation Fund, which provides important outreach and training programs for municipalities. The accounts for public libraries and regional public libraries would each see an increase of $1 million.

Public Employee Post-Retirement Work Hours
The Legislature’s budget bill includes 149 outside sections that change state laws. Section 18 would permanently increase the maximum number of permissible hours that may be worked by a retired public employee from 960 to 1,200.