Senate’s FY25 state budget bill would boost key local accounts

The Senate Ways and Means Committee today released a $57.9 billion state spending plan for fiscal 2025 that would make several important investments in schools and municipalities, despite state revenue expectations that are more modest than in recent years.

The Senate bill (S. 4) would increase Unrestricted General Government Aid by 3% over the current fiscal year and lift Chapter 70 minimum new aid from $30 per pupil to $104.

S. 4 would also provide $125 million in supplemental funding for local roads and bridges, $15 million for bridges and culverts, and a $1.5 million increase for payments-in-lieu-of-taxes for state-owned land.

“Municipal leaders throughout the Commonwealth deeply appreciate the Senate Ways and Means Committee’s impressive budget proposal, which supports essential local accounts and a strong state-local partnership,” said MMA Executive Director Adam Chapdelaine. “The Senate’s proposed increase in the main discretionary local aid account (UGGA) is critical for municipalities to continue to provide essential services to residents. And its minimum new education aid proposal would make a meaningful difference for nearly 72% of public school districts. The Senate’s proposed use of Fair Share surtax revenue to support local road and bridge maintenance will go to great use in every community across the Commonwealth.”

Later this week, the Division of Local Services will be updating preliminary Cherry Sheets to reflect the Senate Ways and Means proposal.

UGGA
The Senate bill would increase the Unrestricted General Government Aid account by $38.1 million (3%) over the current year. Notably, this is above the consensus forecast for state revenue growth of 2% for fiscal 2025. UGGA helps cities and towns deliver vital services, and the proposed increase would ensure that the municipal overreliance on the property tax does not deepen.

Chapter 70
The Senate bill would continue implementation of the funding schedules set in the 2019 Student Opportunity Act. The Senate bill would also increase per-pupil spending for minimum aid districts from $30 to $104 per student. This funding level matches the proposal approved last month by the House, and would benefit the 228 out of 318 districts that were set to receive an increase of less than $104 per student for fiscal 2025.

Charter schools
The Senate bill would fund the charter school reimbursement account at $199 million, intended to meet the commitment to fund the state’s statutory obligation to mitigate Chapter 70 losses to charter schools.

Rural schools
The Senate bill would fund Rural School Aid at $15 million for eligible towns and regional school districts. This grant program helps districts facing the challenge of declining enrollment to identify ways to form regional school districts or regionalize certain school services to create efficiencies.

Special education
The Senate bill would fund the Special Education Circuit Breaker program at $492 million. By leveraging $75 million from a recently passed fiscal 2023 supplemental budget, total funding in fiscal 2025 would be $567 million.

Regional school transportation
The Senate bill would fund regional transportation reimbursements at $99.4 million for fiscal 2025. According to updated cost projections from the Department of Elementary and Secondary Education, this represents 84% reimbursement of anticipated claims.

McKinney-Vento
The Senate bill would fund reimbursements for the transportation of homeless students under the federal McKinney-Vento law at $28.6 million for fiscal 2025. The impact on a particular community will depend on the number of homeless families that remain sheltered in local hotels and motels. According to updated cost projections from DESE, the Senate proposal represents 71% of anticipated claims for fiscal 2025.

Vocational transportation
The Senate bill would level-fund reimbursements for out-of-district vocational school transportation at $1 million.

PILOT
The Senate bill would fund payments-in-lieu-of-taxes at $53 million, an increase of $1.5 million over the current fiscal year. This is of great benefit to cities and towns with large amounts of state-owned land. Previous budget proposals had essentially level-funded this account. PILOT remains a key local aid priority.

Surtax investments
Fiscal 2025 is the second year that revenue from the Fair Share amendment will be allocated. The Senate bill proposes $1.3 billion in Fair Share investments in education and transportation needs, including the following of note to municipalities:
• Local roads and bridges: The Senate bill proposes an additional $125 million for supplemental local road and bridge funding, separate from the annual Chapter 90 bond authorization. Half of the proposed supplemental funding would be distributed using the Chapter 90 formula, and half would use a formula based on each municipality’s share of road mileage. The funding would be put to use immediately by cities and towns to repair crumbling local roads, advance critically needed projects, and improve safety on our neighborhood roadways.
• Bridges and culverts: The Senate bill includes $15 million to fund a local bridges and culverts program. Funding would be used to upgrade municipally owned small bridges and culverts in order to protect public safety, improve climate change resiliency, and restore ecosystem connectivity.

Online Lottery
The Senate bill does not include an outside section to authorize an online Massachusetts State Lottery platform. The MMA has been advocating for the protection of local aid should any new platform be added to the Lottery.

Next steps
Members of the Senate have until 2 p.m. on Friday to file budget amendments. The Senate will begin its fiscal 2025 state budget debate on May 21 and is expected to vote on its budget bill shortly thereafter.

During the budget debate and the remainder of the legislative session, the MMA will work to build on this important progress and advocate for further increases to key accounts.