Governor signs $41.7B state budget for fiscal 2019

A week after he received it from the Legislature, Gov. Charlie Baker yesterday signed a state budget for fiscal 2019 that increases overall state spending by 3.2 percent.

The $41.7 billion budget boosts general municipal aid by 3.5 percent and provides nearly $5 billion for Chapter 70 K-12 education aid.

Gov. Baker vetoed just $49 million from the budget bill, cutting spending from 48 line items, including 293 legislative earmarks and some MassHealth spending that the administration said was already covered by approved rate increases.

The administration is also expecting to recover about $150 million in unspent funds from various agency budgets, money that will revert back to the general fund. The vetoes and reversions account for the $200 million difference between the $41.7 billion budget the governor signed and the bill that the Legislature had sent to him.

Massachusetts was the last state in the nation to have an approved state budget in place for fiscal 2019.

Funding levels for many municipal and school aid accounts were higher in the final budget (H. 4800) than they were in the recommendation filed by Gov. Charlie Baker in January, when prospects for state finances this year were less positive.

Unrestricted General Government Aid
The final budget appropriates $1.1 billion for the Unrestricted General Government Aid account, an increase of $37.2 million over the fiscal 2018 level of funding. The 3.5 percent increase reflects the policy of increasing general municipal aid at the same rate as the growth in state tax collections in the consensus tax forecast. This policy has been adopted by the governor, House and Senate since fiscal 2016.

Chapter 70
The budget appropriates $4.91 billion to fund the basic requirements of Chapter 70 education aid and provisions to continue to implement the recommendations of the Foundation Budget Review Commission, phase in target share funding for communities where the local contribution exceeds the target share amount, and fund minimum new aid at $30 per student.

The final budget provides a Chapter 70 increase of $57 million above the amount originally proposed by the governor in January. The Legislature’s final bill adopted a Senate plan to close 100 percent of the target share gap and establish an enhanced English Language Learner foundation budget factor.

The budget supplements Chapter 70 by providing $12.5 million for assistance to school districts affected by changes in how low-income students are counted. This amount is included in the appropriation item, but not in the Section 3 allocation.

Special Education Circuit Breaker
The Legislature’s final spending plan adopted a Senate proposal to fully fund the Special Education Circuit Breaker program at $319.3 million, through which the state provides a measure of support for services provided to high-cost special education students. This is critically important, and represents a $33.2 million increase above last year’s general appropriations act.

Charter school mitigation
The budget appropriates $90 million for charter school impact mitigation payments. This reflects an increase of $9.5 million above the original fiscal 2018 level of funding, which is a step forward. This account remains substantially underfunded, however, and full funding for this program remains a top priority for the MMA.

Regional school transportation
The budget appropriates $68.9 million to reimburse regional school districts for a portion of the cost of transporting students. This is a $7.4 million increase over fiscal 2018.

McKinney-Vento
The budget appropriates $9.1 million for the account to reimburse municipalities and school districts for a portion of the cost of transporting homeless students as required under state and federal rules. This is an increase of $1 million over the fiscal 2018 appropriation.

PILOT
The budget appropriates $28.5 million to pay a portion of the payment-in-lieu-of taxes amount due to cities and towns to offset the property tax exemption for state-owned land. This includes $1.7 million set aside to ensure that Cherry Sheet PILOT payments next year are not reduced below the fiscal 2018 level due to the revaluation of state-owned land that takes effect next year.

Shannon anti-gang grants
The budget provides $8 million for the effective Shannon anti-gang grant program, which has helped cities and towns respond to and suppress gang-related activities.

Reserve fund for municipal improvements
The budget includes $2.8 million for the District Local Technical Assistance Fund, which helps support local efforts to regionalize local government services, and $2 million to support the Community Compact Cabinet program to facilitate the adoption of municipal best practices in cities and towns.

Law changes
The final budget enacted by the Legislature dropped proposed law changes related to funding the Community Preservation Act and improving the accountability of charter school law.