MMA letter to senators calls for support of budget bill and key amendments

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Dear Senator,

We are writing to express our appreciation for the many provisions in the Senate Ways and Means Committee budget proposal (S. 4) that benefit and support the cities and towns of the Commonwealth. S. 4 reflects a commitment to a fiscal partnership with municipalities, and we appreciate the many ways that cities and towns are supported throughout this proposed budget.

We thank Senate President Rosenberg, Senator Spilka, and the members of the Senate Ways and Means Committee for advancing a state budget framework to increase Unrestricted General Government Aid by $42.1 million, fund the essential requirements of Chapter 70 education aid, including increasing per-student minimum aid to $55 per student, increase funding for the Special Education Circuit Breaker program, and add funds to the still-underfunded charter school reimbursement account.  

We need an effective partnership between cities and towns and state government if we want to strengthen and expand our economy and make sure that citizens receive world-class municipal and education services, with safe streets, thriving neighborhoods and economic opportunity. Cities and towns rely heavily on municipal and education aid to provide the essential local and schools services the residents of Massachusetts deserve and expect, and adequate aid levels help to mitigate today’s overreliance on the most regressive of the major revenue sources in the state, the property tax. That is why the budget decisions you make each year are so important to our state’s prosperity and competitiveness.

With 1,167 amendments before you this week, there are dozens of important funding and policy proposals that would impact cities and towns, and we urgently and respectfully ask you to take action on all of these matters to support the interests of the communities you represent. Please invest in essential municipal and school programs, and please protect local government from proposals that would restrict or interfere with their management authority and decision-making powers. One particularly important priority, which we discuss below, is the need to restore $16.6 million to kindergarten development grants, because a cut of this magnitude would offset the Chapter 70 gains proposed in S. 4, and create serious budget concerns in 164 communities and school districts. Another critically important issue is the need to defeat Amendment 91, which would increase municipal OPEB liabilities.  

In this letter, we have highlighted the most important and visible amendments that impact cities and towns:

KEY BUDGET AMENDMENTS ON SCHOOL AND EDUCATION FUNDING

• Please Support Adequate Chapter 70 Minimum Aid for Municipal and Regional Schools

We support a sufficient funding increase for Chapter 70 school aid to ensure that all municipal and regional school districts are able to reach the “foundation” level of spending, implement the equity provisions adopted in 2006, and provide an adequate amount of minimum aid that ensures that all schools receive a sufficient increase in fiscal 2017.

The Governor proposed a fiscal 2017 Chapter 70 increase of only $72.1 million, which included minimum aid of only $20 per student for 249 cities, towns and school districts (77 percent), an insufficient amount to maintain current school staffing and services. The House countered with a $55 per-student increase, as did the Senate Ways and Means budget recommendation. While we very much appreciate the increase to $55 per student, this still leaves too many schools unable to maintain quality school programs. With funding for the recommendations of the Foundation Budget Review Commission still in the future, we urge the Senate to adopt a higher minimum aid amount to the extent that resources are available, to prevent further erosion in school financing at the local level. 

Please Support Amendment #111 filed by Sen. O’Connor to increase minimum aid to $100 per student. 

• Please Restore Vital Funding for Kindergarten Expansion Grants

Cities, towns and regional school districts across the Commonwealth use this important grant program to support full day access to local kindergarten programs. The Senate Ways and Means budget would cut $16.6 million from Kindergarten Development Grants, leaving only $2 million in a program that funds kindergarten programs in 164 school districts. The Governor and House level-funded the program at $18.6 million. The loss of 89 percent of funding in this key account would clearly offset the other funding gains in S. 4, and cause unexpected budget problems in school systems across the state.  

Please Support Amendment #149 filed by Sen. Lesser and others to join the House and Governor in level funding this necessary account at $18.6 million. Amendment #206 filed by Sen. Joyce would also restore level funding, and Amendment #256 by Sen. O’Connor would add a further increase to bring funding up to previous fiscal year levels. 

• Please Increase Funding for Reimbursements for Charter Schools Losses

The diversion of Chapter 70 school aid away from local public schools to fund charter schools has created a major and growing financial burden 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 section 89 of Chapter 71 of the General Laws to reimburse school districts for a portion of their Chapter 70 aid that is redirected to fund charter schools.

For fiscal 2017, it is estimated that cities and towns will be assessed $537 million in local school revenues to fund charter schools, an amount equal to nearly 12 percent of all Chapter 70 dollars. With assessments at more than a half a billion dollars and growing, it is critical for the state to fund its financial commitment under the law. The Senate Ways and Means budget would fund charter school reimbursements at $87.5 million, a welcome increase of $7 million above the fiscal 2016 level, although full funding of the statutory formula would require $134.4 million. Without these funds, cities and towns will face another major shortfall next year, which will result in cutbacks for the vast majority of students who remain in the local public school setting.

This year’s funding shortfall means that cities and towns are receiving a fraction of the reimbursements due according to state law, and this is impacting a large number of communities including some of the state’s poorest and most financially distressed cities and towns. Thus, underfunding the charger school reimbursement formula is harming the most vulnerable and challenges school districts and communities.

Please Support Amendment #255 filed by Sen. O’Connor to fully fund charter school reimbursements to cities, towns and regional school districts by providing the full $134.4 million necessary to meet the state’s obligation. The MMA also supports Amendment #231 filed by Sen. Jehlen and Amendment #258 filed by Senator Chang-Diaz, which would add funding to this essential account.

• Please Support Funding for Special Education “Circuit Breaker” Reimbursements

Municipal officials appreciate that the Senate has made it a priority to fully fund the special education “circuit breaker” program that helps cities and towns pay for a portion of the costs of high-cost special education services. The Senate Ways and Means Committee budget would add $9.3 million to ensure full funding in fiscal 2017, an important investment. As you know, special education costs are extremely expensive and volatile. 

Please Support Amendment #142 filed by Sen. Brownsberger that would provide a small reserve fund to assist school districts facing truly extraordinary special education costs.

• Please Support Funding for McKinney-Vento Homeless Student Transportation Costs

The State Auditor ruled in 2011 that the McKinney-Vento program is an unfunded mandate on cities and towns. Under the program, cities and towns are providing very costly transportation services to transport homeless students to schools outside of the local school district. Full funding for fiscal 2017 is estimated at $24.3 million, according to the most recent DESE projection.

Please support two key amendments related to this important account, including Amendment #190 filed by Sen. Lovely and Amendment #254 by Sen. O’Connor that would add funding for reimbursements due to municipalities and school districts for the cost of transporting homeless students from temporary shelters to school.

• Please Support Funding for Out-of-District Vocational Education Student Transportation

Chapter 74 of the General Laws requires that the state reimburse cities and towns for the cost of transporting students to out-of-district vocational education programs. 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 are not offered locally. DESE estimates that full funding of the state’s obligation next year would require $3.3 million. The Senate Ways and Means recommendation level funds this account at $1.75 million.

Please Support Amendment #140 filed by Sen. Gobi and others to fully fund this important reimbursement program.

• Please Support Funding for Regional School District Student Transportation

Funding for transportation reimbursements to regional school districts is vital to all regional districts and their member cities and towns, particularly in sparsely populated parts of the state. Decades ago, the state promised 100 percent reimbursement as an incentive for towns and cities to regionalize, and the consistent underfunding of this account has presented serious budget challenges for these districts, taking valuable dollars from the classroom. Full funding next year would require $84 million, according to DESE. The Senate Ways and Means budget proposes level-funding regional school transportation reimbursements at $59 million, which is less than the House budget and the same as the Governor’s recommendation.

Please Support Amendment #174 filed by Sen. Gobi and others that would increase funding for regional school transportation to $67 million, which would be significantly closer to full funding, and Amendment #121 filed by Sen. Tarr to bring funding up to $63 million. 

KEY BUDGET AMENDMENTS ON MUNICIPAL AID ACCOUNTS AND MUNICIPAL MANAGEMENT POLICY

• Please Protect Municipal Decision-Making Authority on Health Insurance by REJECTING Amendment #91

On behalf of the cities and towns across the state, we Strongly Oppose Amendment #91, which would interfere with local officials’ decision-making authority to act on behalf of their taxpayers on the basic issue of contribution levels for retiree health insurance. Amendment 91 would penalize all cities and towns that have used the 2011 municipal health insurance reform law to reduce the cost and financial burden of health insurance for employees, retiree and taxpayers.

Specifically, Amendment 91 would strip these cities and towns of their legal authority to decide whether to adjust contribution percentages for retiree health insurance by unilaterally extending a freeze in contribution ratios. There was a 3-year freeze in the original consensus reform law, but, unfortunately, two years ago the freeze was extended to 5 years. Now, Amendment 91 would seek to extend the freeze to 7 years – an unacceptable imposition on local authority that would have the state interfere with responsible health insurance policy decisions in each community.   

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. In 2014, the temporary freeze was extended for two more years, until July 1, 2016, for any municipality that adopted or was planning on adopting provisions of the 2011 municipal health insurance reform law.

Amendment 91 would reverse planned contribution changes in some cities and towns, and would delay the ability to take action on retiree contribution percentages in many others. Simply put, Amendment 91 would impose significant budget problems in many communities and interfere with sound fiscal planning. The original short-term temporary freeze was part of the compromise brokered by Senate leaders in 2011 that led to the enactment of the landmark municipal health insurance reform bill. Repeated extensions of the freeze runs counter to that agreement and would clearly undermine the ability of cities and towns to control health insurance costs and save municipal jobs. Please vote NO on Amendment 91.

• Please Support a Municipal Seat on the State Retiree Benefits Trust Fund 

Please Support Amendment #341 filed by Sen. Creem, which would add a municipal seat to the State Retiree Benefits Trust Fund (SRBTF). The SRBTF is the body that oversees the investment of Other Post Employment Benefits (OPEB) funds. The fund was originally created to invest money for the state’s OPEB liability, but legislation in 2011 granted municipalities and other government entities the authority to invest their funds via the SRBTF. The Board must approve a city or town’s application to join, and requires an initial investment of at least $250,000. To date, over 50 municipalities and other government entities are investing through the SRBTF, with much more expressing interest. 

The SRBTF Board currently has seven members, including designees of the comptroller of the Commonwealth, the Group Insurance Commission, the treasurer, and the Public Employee Retirement Administration Commission. Municipalities do not have a voice on the Board. Municipal entrants have a unique set of needs and requirements when investing their funds with the SRBTF, and therefore it would be advantageous for municipalities to have representation.

• Please Support Funding for the Shannon Anti-Gang Grant Program

Please Support Amendment #1045 filed by Sen. Donoghue and others to increase funding for the Shannon anti-gang grant program that has helped cities and towns respond to and suppress gang-related activities. The budget before you would reduce spending by $2 million below current levels, and the amendment would restore important funding.   

• Please Support Funding for the Safe and Successful Youth Initiative

Please Support Amendment #189 filed by Sen. Lewis and others to add $500,000 to the Safe and Supportive Youth Initiative. The program seeks to reduce youth violence through wraparound services for those most likely to be victims or perpetrators, and is vital to violence prevention efforts in dozens of communities.

• Please Support Funding for Summer Jobs for At-Risk Youth

Please Support Amendment #795 filed by Sen. Dorcena-Forry, which would increase funding by $2 million for youth summer jobs. This funding is critical to providing employment opportunities for at-risk teenagers in our cities and towns, especially with youth unemployment rates climbing.

• Please Support Protection of Municipal Emergency Medical Services

Please Support Amendment #415 filed by Sen. Donnelly and Amendment #533 filed by Sen. O’Connor that would prevent the practice of “pay the patient,” by insurance companies, which undermines the ability of cities and towns to fund and operate responsive and efficient ambulance services that are at the core of emergency medical services in Massachusetts. “Pay the patient” would force communities to pursue their own residents to recoup thousands of dollars in ambulance expenses; it is inefficient and subject to abuse.

Amendments 415 and 533 would also clarify that municipalities are authorized to set a fair rate for ambulance services. Cities and towns set fees and charges for a wide variety of municipal services, and are very strictly limited by state law to the cost of providing the service. This is the same rule that would apply to rate setting for emergency ambulance services, ensuring that rates are reasonable and preventing insurance companies from shifting costs to local property taxpayers through below-cost reimbursements.

• Please Support Funding for Chapter 40S Payments

We support full funding of the Commonwealth’s commitment to make payments to cities and towns that approve “smart growth” zoning districts under Chapter 40R and are due school cost payments under Chapter 40S. The MMA has been a strong supporter of Chapters 40R and 40S as important tools to facilitate locally guided zoning initiatives to increase the supply of affordable and market-rate housing. This program may be small, but it is seen as a reflection of the state’s commitment to joint state-local efforts to develop affordable housing. Chapter 40S reimbursements are funded at $250,000 this year.
 
Please Support Amendment #93 filed by Sen. Rodrigues, and Amendment #264, filed by Sen. Flanagan, to fund the program at $500,000. 

KEY BUDGET AMENDMENTS ON CAPITAL SPENDING PRIORITIES

• Please Support Brownfields Redevelopment Funds

Please Support Amendment #855 filed by Sen. Donoghue to increase available funding for Brownfields redevelopment projects. This funding is critical to the successful redevelopment of former industrial sites and will enhance local economic development efforts across the state, and improve the environment. Amendment 855 would appropriate $2.5 million for the Brownfield Redevelopment Fund.

• Please Support Double Poles Enforcement

Please Support Amendment #80 filed by Sen. Lewis, which would allow cities and towns that pass a local ordinance to enforce the statutory prohibition on keeping double poles up after ninety days. Authorized penalties would be limited to a ceiling of $1,000 per occurrence, and the amendment would only apply to non-commercial and non-industrial approved construction projects. This is a narrower version of the broader legislation that would address this issue in a more comprehensive manner.

• Please Support Community Preservation Act Funding

Please Support Amendment #58 filed by Sen. Creem and others, Amendment #1 filed by Sen. Tarr, and Amendment #809 filed by Sen. O’Connor, that would dedicate a portion of any fiscal 2016 year-end state budget surplus, up to $25 million, to supplement the fiscal 2016 state match to municipal revenue raised by local adoption of the Community Preservation Act (CPA). The Division of Local Services (DLS) estimates that, without these amendments, the balance in the state trust fund will provide a first round match of only 19 percent, far below expectations or past, state support.

SUMMARY

Again, we would like to express our appreciation to President Rosenberg, Senator Spilka, and the Senate Ways and Means Committee, and we respectfully ask you to build on the many favorable local aid investments in S. 4 by supporting the key budget amendments detailed above, and opposing Amendment 91. This is a critical time for our economy, and for cities, towns and local taxpayers. Massachusetts is starting to find some new vigor in its economy, 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 contact us at any time if you have any questions or need additional information by having your office reach out to me or MMA Legislative Director John Robertson at 617-426-7272 ext. 122 or jrobertson@mma.org.

Thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.

Sincerely,

Geoffrey C. Beckwith
MMA Executive Director and CEO