Proposed Resolution Ensuring a Strong and Enduring Fiscal Partnership Between Cities and Towns and State Government in Fiscal 2019 and Beyond (2018)

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Whereas, the well-being and success of the residents and businesses of the Commonwealth depends on the fiscal health of cities and towns and the ability of local government to provide efficient and progressive public services and adequately invest in modern public infrastructure; and
 
Whereas, the continuing fiscal strength of local government in Massachusetts will rely on adequate, sustainable and predictable revenues to support local services and capital programs; and
 
Whereas, cities and towns are highly reliant on the tightly capped property tax to fund local budgets, and this heavy reliance on the property tax has limited the ability of cities and towns to respond to new challenges and opportunities; and
 
Whereas, the state’s landmark school finance law, Chapter 70, is outdated and no longer provides an adequate minimum spending standard, and the local government share of the cost of schools and public education has grown to a 10-year high; and
 
Whereas, rapid growth in state-imposed assessments on local governments to fund charter schools has resulted in significant budget shortfalls in communities across the state, particularly where there is a large concentration of charters, and this has forced cities and towns to scale back spending and programs that serve the vast majority of students who remain in the local K-12 school system, and has also forced cutbacks in municipal services; and
 
Whereas, to avoid becoming overly reliant on the property tax and to ensure that municipalities have the fiscal capacity to deliver the high-quality municipal and school services that are essential to support local economies and families in every corner of the Commonwealth, it is imperative that cities and towns receive an adequate share of state revenues, have an effective and fair municipal tax system, and have the tools necessary to plan for and fund long-term liabilities and make investments in people and capital;
 
Therefore it is hereby resolved that the members of the Massachusetts Municipal Association support the following essential policy positions to ensure a strong partnership between cities and towns and the Commonwealth in fiscal 2019 and beyond:
 
In the Area of Municipal and School Aid
 
• In fiscal 2019, unrestricted municipal aid should grow at least at the same rate as the growth in state tax collections, and be distributed without earmarks, conditions or restrictions to all cities and towns, so that local officials and residents can adequately fund public safety, public works, and all basic municipal and school services while avoiding overreliance on the property tax;
 
• The full share of Lottery and gaming revenue dedicated to help pay for municipal services should be used to help fund unrestricted municipal aid;
 
• Chapter 70 school aid revenue sharing should be increased in fiscal 2019 consistent with the Commonwealth’s constitutional obligation to ensure adequate funding for all schools, including the “foundation budget” adequacy standard, as updated through the recommendations of the Foundation Budget Review Commission, the “target share” equity standard, and a reasonable amount of new minimum per student aid;
 
• The governor and the Legislature should review the calculation of the required local contribution under Chapter 70, including the “municipal revenue growth factor,” and adopt changes to mitigate the rising reliance on the property tax to fund local schools, particularly in cities, towns and districts that educate a significant share of high-need students;
 
• Full funding of the Commonwealth’s obligations and commitments, as provided by state law, to reimburse cities and towns for the transitional costs of a student leaving the local school district to attend a charter school should be included in the fiscal 2019 budget;
 
• Full funding of the Commonwealth’s obligations and commitments to the Special Education Circuit Breaker Program, as provided by state law, should be appropriated;
 
• Full funding of the Commonwealth’s obligations and commitments to the program for payments in lieu of taxes for state-owned land, as provided by state law, should be included in the fiscal 2019 budget;
 
• Full funding of the Commonwealth’s obligations and commitments to reimburse the costs of regional school transportation, regular school transportation, out-of-district vocational education and the transportation of homeless students under the McKinney-Vento unfunded mandate should be included in the fiscal 2019 budget;
 
• Full funding of the Commonwealth’s obligations and commitments to Chapter 40S “smart growth” reimbursements, regional and municipal libraries, anti-gang grants, innovation and regionalization grants, and other effective municipal and school aid programs should be included in the fiscal 2019 budget; and
 
In the Area of Timely Notice of Local Aid for Good Planning and Implementation
 
• To ensure orderly and efficient financial planning at the local level and implementation of balanced and adequate local operating and capital budgets, the governor and the Legislature should reach early agreement on unrestricted municipal aid and Chapter 70 school aid and local contribution amounts so that a consensus local aid resolution can be approved and reliable Cherry Sheets can be released by March 1; and
 
In the Area of Local Taxing Authority and Other Revenues
 
• Cities and towns should be granted new local-option flexibility to adopt local taxes and other revenues to help pay for municipal and school services and the construction and maintenance of local capital projects;
 
• The state should enact legislation to close loopholes and allow for the equitable collection of the room occupancy excise in the case of seasonal rentals and in transactions involving internet resellers, and also close the telecommunications equipment tax loophole;
 
• Legislation should be enacted to provide cities and towns with local-option authority to develop local rules for payments-in-lieu-of-taxes by owners of tax-exempt property; and
 
In the Area of Long-Term Liabilities and Sustainability
 
• The governor and the Legislature should undertake a comprehensive reform of the laws and practices governing post-employment benefits for public employees, with an immediate focus on Other Post-Employment Benefits (OPEB) liabilities related to health insurance for retired public employees in order to help cities and towns manage current costs and ensure fiscal sustainability over the long term; and
 
In the Area of Capital Budgeting
 
• The governor and the Legislature should work together early in 2018 to ensure enactment of a multi-year transportation bond bill that provides at least $300 million annually for local road projects, including notice of allocations for fiscal 2019 by April 1, 2018, and include adequate allocations for the Complete Streets and small municipal bridges programs;
 
• The governor should include in the fiscal 2019 capital plan funding for the MassWorks program to help pay for local economic development projects, including housing, development and road safety programs;
 
• The governor and the Legislature should support the financing of road, rail and transit projects across the Commonwealth that are critical to economic development and public safety and convenience, and should explore new and alternative ways to finance projects;
 
• The governor and the Legislature should continue to make the installation of high-speed internet access in unserved and underserved cities and towns a high priority; and
 
It is further resolved that a copy of this resolution shall be provided to the governor and members of the General Court of the Commonwealth.