The Honorable Brian S. Dempsey, House Chair
The Honorable Karen E. Spilka, Senate Chair
The Honorable Stephen Kulik, House Vice Chair
The Honorable Sal N. DiDomenico, Senate Vice Chair
The Honorable Todd M. Smola, Ranking House Member
The Honorable Viriato M. deMacedo, Ranking Senate Member
Joint Committee on Ways and Means
State House, Boston
Dear Representative Dempsey, Senator Spilka, Representative Kulik, Senator DiDomenico, Representative Smola, and Senator deMacedo:
On behalf of cities and towns across the state, we are writing to express our appreciation for the many provisions in the fiscal 2018 budget bills approved by the House (H. 3601) and Senate (S. 3, as amended) that benefit and support the communities of the Commonwealth. Both bills reflect a commitment to a fiscal partnership with municipalities.
We thank the House and Senate for advancing a state budget framework that increases Unrestricted General Government Aid (UGGA) by $39.9 million, a priority for cities and towns, funds the basic parts of Chapter 70 education aid, including increasing per-student minimum aid to $30, begins to update the "foundation budget," and increases funding for the Special Education Circuit Breaker program.
While there are a number of areas where the House and Senate are in agreement on funding levels for municipal and school aid accounts, there are many budget provisions where the two branches will have to resolve important differences. In this letter, we offer municipal government's position on important funding and policy proposals that would impact communities and local taxpayers, and we urgently and respectfully ask you to take action on all of these matters to support the interests of the cities and towns of the Commonwealth.
We ask you to please invest in essential municipal and school programs, and we also ask that you protect local government from proposals that would restrict or interfere with their management authority and decision-making powers.
In this letter, we have highlighted the most important budget issues that impact cities and towns:
Please Support the Full Increase in Unrestricted Municipal Aid
We thank the House and Senate for voting to increase Unrestricted General Government Aid (UGGA) (1233-2350 and section 3) by $39.9 million to $1.062 billion. Recent increases in UGGA have been fundamentally important to municipal and school programs in cities and towns across the Commonwealth. It is particularly timely to note that the increase has already been factored into how the state calculates required local contribution and school aid amounts next year under Chapter 70, and adjustments in UGGA would change foundation budget inputs across the board.
Funding for this vital municipal aid program reflects the commitment of Lottery and other gaming revenue to support local government services and avoid over-reliance on the property tax. Nearly all of the Cherry Sheet UGGA distribution next year would be covered by gaming revenue, with very little funded from state tax collections. If Lottery revenue for fiscal 2018 simply reaches the current fiscal 2017 estimate, the tax contribution to UGGA will be less than $10 million. Even at $1.062 billion, the UGGA account will still be $253 million lower than it was 10 years ago.
We respectfully ask your budget conference committee to support the full UGGA amount voted by the House and Senate in the final fiscal 2018 state budget. Any reduction in UGGA funding would disrupt local budgets and services in virtually every city and town, and would require communities to reopen their already-adopted budgets to implement mid-year cuts. Further, a reduction of any magnitude would divert Lottery and gaming funds away from cities and towns, which would be inconsistent with the purposes of those funds.
We are deeply grateful for your support in appropriating $1.062 billion for UGGA. Protecting this program is a top priority for cities and towns.
Please Support Chapter 70 School Aid
We appreciate the proposals in the House and Senate to fund the basic requirements of Chapter 70 education aid (7061-0008 and Section 3), including the plan to assist cities and towns affected by the change in how low-income students are counted, and the provisions to begin to implement the recommendations of the Foundation Budget Review Commission.
We strongly support a funding increase for Chapter 70 school aid that is sufficient to allow all municipal and regional school districts to reach the "foundation" level of spending, implement the target share/down payment aid equity aid provisions adopted in 2006, and provide an adequate amount of minimum aid that ensures that all schools receive a suitable and appropriate increase in fiscal 2018. A significant majority of school districts only receive minimum aid, which is why the minimum aid aspect of Chapter 70 is so important. Almost three-quarters of all school districts are slated to receive the minimum aid amount as new aid next year. We sincerely appreciate the vote by Representatives and Senators to increase minimum aid to $30 per student, up from the $20 per student amount originally filed by the Governor in House One.
We strongly support the House and Senate provisions to build on the first steps taken in House 1 to implement the recommendations of the Foundation Budget Review Commission to update the Chapter 70 "foundation budget" minimum spending standards for special education and health insurance costs for school employees. These recommendations, approved in June 2015 and October 2015 by the Commission, would update the increasingly obsolete foundation budget and restore some measure of credibility to the spending standard developed as part of the landmark education reform law of 1993.
We would also like to support the direction in Section 19 of the Senate bill that would establish an annual early decision process for the "foundation budget." We recommend that this process include an early decision on the local contribution calculation. One of the key benefits of this process for cities, towns and regional school districts would be early notice of local contribution and school aid amounts. For state government, it would be beneficial to reach agreement on both the foundation budget implementation schedule and the local contribution and school aid calculation at the same time.
Please Support Full Funding for the Special Education "Circuit Breaker"
We support the Senate appropriation to fully fund the Special Education "Circuit Breaker" Program (7061-0012) at $294.4 million, through which the state provides a measure of support for services provided to high-cost special education students.
Under Chapter 71B of the General Laws, the state's share is 75 percent of costs that exceed four times the state average per pupil foundation budget. This is an essential program that provides critical funding to assist all school districts with the increasingly burdensome and volatile cost of complex and expensive special education services.
Cities and towns are providing special education services under a mandate imposed by state government, and communities recognize the importance of these services to the schoolchildren who rely on these programs to achieve their maximum educational potential, which is why cities, towns and school districts are committed to meeting their obligations as mandated by the state. The Circuit Breaker formula is intended to partially fund the state mandate.
This is a vital account that every city, town and school district relies on to fund state-mandated services. Thanks to your leadership, the Legislature has fully funded this program recently, and we respectfully urge you to ensure full funding again in fiscal 2018.
Please Support Funding for Reimbursements for Charter Schools Losses
The rapidly growing deduction of Chapter 70 school aid from local public schools to support charter schools has become a major financial drain on cities and towns, a problem made more acute as the state grants more charters and existing charter schools expand. Local officials strongly support full funding of the Commonwealth's statutory commitment under the law to reimburse school districts for a portion of their school aid lost when used to fund charter schools (7061-9010). We support the Senate appropriation to increase the reimbursement by $3 million.
For fiscal 2018, it is estimated that cities and towns will be assessed $598 million in local school revenues to fund charter schools, an increase of $65 million (12 percent) of the estimated level this year. With assessments at over half a billion dollars and growing, it is critical for the state to fund its financial commitment under the state statute. Full funding of the statutory formula would require $157 million, based on the most recent data from the Department of Elementary and Secondary Education (DESE). Without these funds, cities and towns will face another round of lost school aid next year, resulting in fewer programs for the vast majority of students who remain in the local public school setting.
These school aid deductions are impacting a large number of communities, including some the state's poorest and most financially distressed cities and towns. Underfunding the charter school reimbursement formula harms the most vulnerable and challenged school districts and communities.
Please Support Funding for Regional School District Student Transportation
Funding for transportation reimbursements to regional school districts (7035-0006) is vital to all regional districts and their member cities and towns, particularly in sparsely populated parts of the state. Underfunding this account has presented serious budget challenges for these districts, taking valuable dollars from the classroom. Full funding next year would require $86 million, according to DESE. The House and Senate appropriated roughly similar amounts for this important local school program, and we ask you to support funding at the highest possible level.
Please Support Funding for Out-of-District Vocational Student Transportation
Chapter 74 of the General Laws requires the state to reimburse cities and towns for the cost of transporting students to out-of-district vocational education programs (7035-0007). This reimbursement program recognizes the significant expense of providing transportation services for out-of-district placements, as these students must travel long distances to participate in vocational programs that may not be available locally. DESE estimates that full funding of the state's obligation next year would require $3.6 million. The House and the Senate would provide $250,000 in funding for this account.
Please Support Funding for the Shannon Anti-Gang Grant Program
Please support the Senate level of funding for the highly effective and valuable Shannon Anti-Gang Grant Program (8100-0111), which has helped cities and towns respond to and suppress gang-related activities.
KEY PROPOSAL FOR FAIRNESS IN TAX POLICY
Bringing Fairness to Short-Term Rentals and Tax Policy
We would like to express our strong support for the Senate language that would modernize and close loopholes in the room occupancy excise, and provide cities and towns with authority to set local rules for the industry. New technologies and business practices have changed how people book and pay for vacations, business trips and other short-term stays away from home. The Senate provision would apply the same rules across all types of occupancy, and is a complete package in that it also closes the internet reseller loophole. We note that industry leader Airbnb has also endorsed Section 35, which demonstrates that this provision offers a strong foundation to solve this issue from both the municipal and business perspective. This is an urgent issue and we appreciate the Senate's role in advancing the measure as part of the budget.
KEY BUDGET AMENDMENTS ON CAPITAL SPENDING PRIORITIES
• Community Preservation Act
Please support the Senate provision (Amendment 286) that would strengthen the Community Preservation Act by updating the fee schedule to provide adequate revenue to restore the state match to recent average levels. The ability of our cities and towns to fund important CPA projects has been weakened by the decline in matching funds from the statewide CPA Trust Fund, a challenge that has become greater due to the increasing number of cities and towns joining the program. The Senate provision is an important step to update and sustain the program at more adequate levels.
Conservation Tax Credit
Please support the House provisions that would expand the conservation land tax credit. These sections (90-100) would raise the annual cap on the Conservation Land Tax Credit (CLTC) Program from $2 million annually to $5 million. This provision would also amend the definition of a "public or private conservation agency" which may receive donations of land subject to a conservation tax credit, to include realty trusts organized for conservation purposes pursuant to Chapter 203 of the General Laws. We believe that increasing the annual cap and expanding the definition of eligible agencies would increase private land donations and generate widespread public benefits.
UPDATING AND MODERNIZING STATUTES
Municipal Modernization Updates
Please support the Senate language (Amendment 74) that would update two important sections of the Municipal Modernization Act that became law last August. The provision would change the rules governing the municipal overlay account that is used to cover property tax abatements. The change would allow any interest amount due to a taxpayer to be paid from the overlay account. Amendment 74 would also provide a temporary delay in the requirement that municipal revolving funds be established through local bylaw or ordinance rather than by the legislative body, as is the rule in effect through fiscal 2017.
Community Benefit Districts
Please support Senate and House language (Senate Amendment 596 and House Amendment 308) that would grant municipalities the local option to create Community Benefit Districts (CBDs). With this CBD proposal, local property owners would have the option to assess themselves a small fee to implement a management plan for the district. This would not replace or privatize public services, but would instead provide the opportunity for new services not ordinarily provided by the municipality. The property owners, municipality, and the community at-large would oversee implementation through a nonprofit management organization, and would have the option to dissolve the entity.
Municipal Impact Statements
Please support the Senate language (Senate Amendment 209) that would require state agencies to notify the Local Government Advisory Commission (LGAC) and other state agencies that work with cities and towns of the impact on local government of any proposed changes to state regulations or other actions. This would facilitate early detection of unaffordable or impractical state mandates.
Water Infrastructure Funding
Please support language included in both the House and Senate versions of the budget (1599-0093 and Amendment 254) that would make an important technical change to the appropriation language for contract assistance to the Massachusetts Clean Water Trust. This amendment would bring the budget language into conformity with the 2014 Water Infrastructure Act and more recent regulations to allow use of funds beyond only debt service, to include principal forgiveness, interest rate reduction and other means of financial assistance. Upgrading our water infrastructure in the Commonwealth is essential not only for the environment, but also for protecting public health and promoting economic development.
Please OPPOSE the "Recycling Standards" Unfunded Mandate
We strongly oppose the Senate language (Amendment 868) that would place a new mandate on cities and towns, primarily by imposing a set of solid waste "performance standards" and instituting new annual reporting requirements.
Municipalities have made enormous progress in reducing solid waste and increasing recycling programs throughout the state. Most cities and towns have built recycling and reuse facilities in an effort to increase recycling rates. Communities have also implemented automated curbside pickup and instituted unit-based pricing for waste collection, commonly known as "pay-as-you-throw," to incentivize recycling.
This provision would direct the DEP Commissioner to establish performance standards for the reduction of municipal solid waste, and lays out specific standards of not more than 600 pounds per capita by July 1, 2019, and not more than 450 pounds per capita by July 1, 2023. The bill would require municipalities to report information on solid waste disposal annually. If a city or town is not able to meet the performance standards by July 1, 2019, the municipality must explain why it did not meet the standard and detail a plan to achieve the standards by July 1, 2023.
While the MMA strongly backs increased resources and support for municipal recycling programs to assist municipal leaders' efforts to reduce the generation of solid waste, we cannot support the imposition of mandated per-capita solid waste caps, because these mandates could impose a very costly burden on cities and towns and undermine other critical municipal services. Modest changes in the economic market for recycled goods have a dramatic impact on the feasibility and ultimate cost of the mandated performance standards in Amendment 868. Much more work and analysis is necessary before basic affordability questions can be answered regarding the feasibility and burden of this language.
Local Authority to Set Speed Limits
The Municipal Modernization Act gave communities the authority to set speed limits as low as 20 or 25 miles per hour in certain areas. The MMA is concerned that House language may unintentionally reduce flexibility for communities seeking to make this change and further complicate what was meant to be a simplified process for communities. Please preserve the local authority you granted last year to enable municipalities to lower speed limits by opposing these changes made in Sections 35 and 36 of H. 3601.
Again, we would like to express our deep appreciation to you, and to House Speaker DeLeo and Senate President Rosenberg and all the members of the House and Senate, for your leadership and commitment to local government. We respectfully ask you to support the favorable local aid investments in H. 3601 and S. 3, as amended, by supporting the key budget provisions detailed above, and opposing the noted provisions.
This is a critical time for our economy, and for cities, towns and local taxpayers, yet we can only reach our full potential for statewide growth and job creation if all 351 cities and towns have the resources to adequately serve the residents and businesses of the Commonwealth.
Please do not hesitate to contact us at any time if you have any questions or need additional information. Your offices can reach out to me or MMA Legislative Director John Robertson at (617) 426-7272 ext. 122 or firstname.lastname@example.org at any time.
Thank you for your leadership, support, dedication and commitment to the cities and towns of Massachusetts.
Geoffrey C. Beckwith
Executive Director & CEO
CC: The Honorable Robert DeLeo, Speaker of the House
The Honorable Stanley Rosenberg, Senate President
MMA letter to conference committee outlines municipal priorities for FY18 state budget
The Honorable Brian S. Dempsey, House Chair