Senate budget plan offers key increases in municipal, education aid

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The Senate Ways and Means Committee today released a $40.3 billion fiscal 2018 state budget plan that would increase total state expenditures by 3.3 percent.
The budget proposal makes key investments in municipal and education aid priorities, including the $40 million increase in Unrestricted General Government Aid that the House and governor have proposed.
The Senate budget plan (S. 3) would increase Chapter 70 education aid by $37.4 million above the governor’s recommendation by increasing the minimum new aid amount from $20 per student to $30 per student, going further in implementing the recommendations of the Foundation Budget Review Commission, and adding $12 million to hold districts harmless in the new calculation of the number of low-income students. (The budget passed by the House last month also set minimum aid at $30 per student and includes the $12 million for low-income students.)
The Senate Ways and Means budget would provide $10 million more for Chapter 70 than the House plan does, primarily by joining the House in increasing the calculation of employee health insurance costs, and then expanding on that by increasing the calculation of special education-related costs.
The Senate plan would also add $16.5 million to fully fund the Special Education Circuit Breaker account, an important priority for communities.
The full Senate will begin debating the budget bill on Tuesday, May 23.
Link to Division of Local Services website to view local aid and preliminary Cherry Sheet numbers based on Senate Ways and Means budget bill
Unrestricted municipal aid
S. 3 would provide $1.06 billion for UGGA, with nearly all of the funding coming from $985 million in expected Lottery proceeds and $65 million from the Plainridge gaming facility. The full $40 million UGGA increase is a top priority for municipalities, as they are counting on these funds to balance their fiscal 2018 budgets – many of which have already been adopted – and maintain essential services for their residents.
Chapter 70
The Senate budget committee is proposing an increase of $128.8 million in Chapter 70 education aid ($37.4 million more than the increase in the governor’s proposal), joining the House in supporting a minimum new aid increase of at least $30 per student (compared to the $20 per student amount in the governor’s budget).
The Senate plan would continue to implement the target share provisions enacted in 2007. The plan would also build on the proposals by the House and governor to start addressing shortfalls in the foundation budget framework. In addition to increasing the cost factors for employee health insurance, the Senate budget committee plan would increase the cost factors for special education, which accounts for why the Chapter 70 proposal is $10 million higher than the House’s.
Both the Senate and House budgets would provide $12 million to hold school districts harmless from changes in the method of counting low-income students. This is similar to the Legislature’s handling of the problem in the fiscal 2017 budget.
In the context of a tight budget year, cities and towns see the Senate budget committee’s increase in Chapter 70 funding as welcome progress. The MMA continues to give top priority to full funding for the Foundation Budget Review Commission’s recommendations, and over the long-term will work to build on this increase.
Special Education Circuit Breaker
Senate leaders announced that they support full funding for the Special Education Circuit Breaker program. The Senate budget plan would provide $293.7 million, a $16.5 million increase from the above fiscal 2017 budget and the governor’s level-funding recommendation for fiscal 2018. (The House had added $4 million during its deliberations.) Every city, town and school district relies on the circuit-breaker program to fund state-mandated special education services.
Charter school reimbursements
The Senate Ways and Means budget would level-fund charter school reimbursements at $80.5 million, far below the amount necessary to fully fund the statutory formula that was originally established to offset a portion of the funding that communities are required to transfer to charter schools.
The fiscal 2017 funding level is $54.6 million below what is necessary to fund the reimbursement formula that is written into state law. If this program is level-funded, the shortfall will grow to an estimated $76.4 million in fiscal 2018, which, the MMA argues, would lead to the continued and growing diversion of Chapter 70 funds away from municipally operated school districts and place greater strain on the districts that serve 96 percent of public schoolchildren.
The MMA is continuing to urge legislators to solve the charter school funding problem during the budget debate.
Regional School Transportation and other accounts
Compared to fiscal 2017 appropriations, the Senate budget committee’s proposal would level-fund Regional School Transportation Reimbursements at $60.1 million, level-fund PILOT payments at $26.77 million, add $1.25 million to library grant programs, add $357,000 to METCO, and level-fund McKinney-Vento school transportation reimbursements at $8.35 million.
The proposal would reduce Shannon Anti-Gang Grants by $1 million, to $5 million.
Lodging taxes
The Senate budget committee’s plan would make several changes – supported by the MMA – to close loopholes in the collection of the local and state lodging excise taxes.
The budget bill proposes language to end the “internet reseller” loophole that allows Expedia and others to avoid payment of the full hotel-motel tax. The bill would also close the loophole for transient accommodations, including short-term seasonal rentals. Finally, the Senate plan would begin to close the Airbnb loophole.
The MMA maintains that these are important steps to bring parity and a level playing field to the collection of lodging excise payments.