Resolution Supporting an Enduring Fiscal Partnership Between Cities and Towns and the Commonwealth in Fiscal 2021 and Beyond (2020)

Whereas, the well-being and success of the residents and businesses of the Commonwealth depends 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;

Whereas, cities and towns are highly reliant on the tightly capped property tax to fund local budgets and capital programs, and this heavy reliance on the property tax has limited the ability of cities and towns to respond to new challenges and opportunities;

Whereas, adequate and sustained state support for local public schools is essential to student success and the health of the Massachusetts economy;

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 2021 and beyond:

In the Area of Municipal and School Aid
• In fiscal 2021, 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 2021 consistent with the Commonwealth’s constitutional obligation to ensure adequate funding in all schools and the updated spending standard in the 2019 Student Opportunity Act;
• The governor and the Legislature should review the calculation of the required local contribution under Chapter 70, including the “target local share,” and adopt changes to mitigate reliance on the property tax to fund local schools, and should review and address fiscal challenges facing rural schools;
• The governor and the Legislature should amend charter school finance law, consistent with MMA legislation, to bring transparency and accountability to the law by limiting charter school tuition assessments placed on local government and providing a means for direct state appropriation of additional tuition payments to charter schools, funded in the state budget;
• Pending passage of charter school finance reform legislation, the full amount of the schedule in the Student Opportunity Act to fund charter school mitigation payments should be appropriated for fiscal 2021;
• Full funding of the Commonwealth’s commitments to the Special Education Circuit Breaker Program, as provided by state law, should be appropriated, including student transportation costs made eligible through the Student Opportunity Act;
• Full funding of the Commonwealth’s obligations to the program for payments in lieu of taxes for state-owned land, as provided by state law and including a hold-harmless provision, should be included in the fiscal 2021 budget;
• Full funding of the Commonwealth’s obligations 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 2021 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 2021 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; and

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 Legislature, the governor and state agencies should determine, report and review the actuarial liability of post-employment benefits for public employees and undertake a comprehensive reform of the laws and practices related to 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. Reform should include ways to manage liabilities and finance benefits, and should not impose any new unfunded mandates or preempt any existing decision-making authority that cities and towns currently use to manage their OPEB liability;
• The governor and the Legislature should determine and report the long-term cost to cities and towns as part of the evaluation of all legislative proposals to amend public employee benefit programs, and no legislation to expand benefits should be acted upon until this cost analysis is complete and made public; and

In the Area of Capital Budgeting
• The governor and the Legislature should work together early in 2020 to ensure enactment of a multiyear transportation bond bill that provides at least $300 million annually for local road projects, including notice of allocations for fiscal 2021 by March 1, 2020, and includes separate allocations for the Complete Streets and small municipal bridge programs;
• The state’s fiscal 2021 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 state’s fiscal 2021 capital plan should include additional funding for water infrastructure projects, including basic drinking water capital and water contamination mitigation (PFAS), wastewater capital and Combined Sewer Overflow mitigation, and stormwater management;
• The governor and the Legislature should support programs in the fiscal 2021 state budget and capital plan to help cities and towns assess and respond to challenges related to climate change, including the Municipal Vulnerability Preparedness program, Coastal Resilience Grant Program, Green Communities Program, GreenWorks 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.