Resolution Supporting an Enduring Fiscal Partnership Between Cities and Towns and State Government in Fiscal 2020 and Beyond (2019)

Whereas, the well-being and success of the residents and businesses of the Commonwealth depend 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 reliable and resilient 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Whereas, the state’s landmark school finance law, Chapter 70, is outdated and no longer provides an adequate minimum spending standard, and the local government share of the cost of schools and public education has grown to a 10-year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, the state’s charter school finance statute imposes significant financial and program challenges for public school districts, particularly in regions where there is a large concentration of charters; 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 2020 and beyond:

In the Area of Municipal and School Aid
• In fiscal 2020, unrestricted municipal aid should grow by at least 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 should be increased in fiscal 2020 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 amend Chapter 70 to codify in state law changes to the foundation budget related to spending for special education, employee benefits (mainly health insurance) and the cost of services for low-income and other high-need students;
• 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;
• Beginning in fiscal 2020, the governor and the Legislature should amend the charter school finance law, consistent with MMA-sponsored legislation to limit the charter school tuition assessments placed on local government, and should provide a means for direct state appropriation of additional tuition payments to charter schools, funded in the state 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 2020 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 2020 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 2020 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, including MMA-sponsored legislation related to new or additional local taxes on motor fuels, alcoholic beverages and meals;
• The Legislature should enact and the governor sign legislation, consistent with the room occupancy bill enacted by the Legislature in 2018, to allow for the equitable collection of the room occupancy excise in the case of short-term rentals, including provisions to address the internet-reseller loophole, and legislation should be enacted to review and eliminate loopholes and other unwarranted exemptions related to personal property taxes on telecommunications and other utility property;

In the Area of Long-Term Liabilities and Sustainability
• In order to allow cities and towns to manage current costs and ensure fiscal sustainability over the long term, the governor and the Legislature should undertake a comprehensive reform of the laws and practices governing labor relations and post-employment benefits for public employees, with an immediate focus on Other Post-Employment Benefit (OPEB) liabilities related to health insurance for retired public employees;

In the Area of Capital Budgeting
• The governor and the Legislature should work together early in 2019 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 2020 by April 1, 2019, and include adequate allocations for the Complete Streets and small municipal bridge programs;
• The state’s fiscal 2020 capital plan should include 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 new revenues to help finance state, regional and local transportation projects for road, rail and transit projects across the Commonwealth that are critical to economic development and public safety and convenience, and that cities and towns are players in policy development and implementation;
• The governor and the Legislature should support programs in the fiscal 2020 state budget and capital plan to help cities and towns assess and respond to challenges related to climate change, including the Municipal Vulnerability Preparedness (MVP) program, Coastal Resilience Grant Program, Green Communities Program and others;
• The governor and the Legislature should continue to make the installation of high-speed internet access in unserved and under-served cities and towns a high priority; and

It is further resolved that a copy of these resolutions shall be provided to the governor and members of the General Court of the Commonwealth.