Senate passes $55.9B state budget for FY24

The Senate last night approved a $55.9 billion state budget bill for fiscal 2024 that would increase discretionary local aid by 3.2% and provide $60 per student in minimum new Chapter 70 aid.

The budget passed by the Senate (S. 4) is very similar to the recommendation released by the Senate Ways and Means Committee on May 9, which proposed increases in Unrestricted General Government Aid, Chapter 70 education aid, and the Rural School Aid account. The Senate adopted the budget committee’s recommendations to strengthen the state program to help fund school building projects and to make a supplemental appropriation of $100 million for local road and bridge maintenance.

During three days of deliberation, senators considered more than 1,000 amendments, most of which were not included. One amendment adopted by the Senate would transfer $30 million to the Massachusetts Community Preservation Trust Fund before the fiscal 2023 surplus is sent to the state’s stabilization fund. The transfer would provide much-needed stability for the fund, which provides distributions to the 195 communities that have adopted the CPA.

Key local accounts
The Senate budget would increase Unrestricted General Government Aid by $39.3 million (3.2%), which is twice the projected rate of state revenue growth for fiscal 2024 (the “consensus revenue forecast”).

The Senate budget would increase Chapter 70 education aid by $603 million over the current year, for a total of $6.59 billion. This funding level would continue to fund the Student Opportunity Act on the intended schedule.

In recognition of the challenges faced by 119 school districts that receive only minimum new aid, the Senate bill — like the state budget bill approved by the House in April — would double the per-pupil minimum aid amount to $60 per student. (The budget filed by the governor on March 1 had proposed $30.)

The $100 million in additional funding for local roads and bridges in the Senate bill would be funded by the voter-approved surtax on annual incomes over $1 million (known as the Fair Share Amendment). Half of the $100 million appropriation would be allocated using the Chapter 90 formula, and half would be allocated using a formula based on road miles.

The Senate would also use $100 million in Fair Share funding to provide relief for districts that started school projects in recent years, in partnership with the Massachusetts School Building Authority, and whose project costs have far exceeded original estimates.

While the budget bill approved by the House (H. 3901) proposed authorizing an electronic Lottery (iLottery), the Senate budget did not include a similar outside section. The MMA will continue to advocate for any potential online Lottery proceeds to be used solely for the Lottery’s intended purpose, which is funding the Commonwealth’s revenue sharing through Unrestricted General Government Aid. The MMA maintains that this is consistent with the Lottery’s mission and necessary to protect a vital revenue stream that accounts for the overwhelming amount of discretionary local aid that cities, towns and taxpayers rely on to fund essential municipal and school services and balance local budgets.

The Division of Local Services will be posting preliminary Cherry Sheet numbers for cities, towns and regional school districts based on the Senate budget bill shortly.

In the coming weeks, the House and Senate are expected to appoint a six-member conference committee to work out differences between the two spending plans, with the goal of presenting a final legislative budget to the governor by the beginning of the fiscal year on July 1.