Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Her Excellency Maura Healey
Governor of the Commonwealth
State House, Boston
Dear Governor Healey,
On behalf of the cities and towns of the Commonwealth, we are writing with comments on H. 4800, the fiscal 2025 state budget on your desk for review and approval. The investments in cities and towns in this budget bill reflect a strong partnership with local government, as municipal and state leaders work together to deliver essential services to residents of the Commonwealth. Municipalities are deeply grateful for your leadership and partnership, as your budget proposal in January set the tone for a process that has prioritized key investments in local and school aid accounts. As you review the conference report enacted by the Legislature, we respectfully ask that you support the important investments in cities and towns highlighted in this letter. We also respectfully request your consideration of amendments that would provide essential protections for cities and towns, while preserving the intent of policy changes included in the legislation.
Unrestricted General Government Aid (UGGA)
H. 4800 includes $1.3 billion for Unrestricted General Government Aid (line item 1233-2350 and Section 3), an increase of $38.1 million, or 3%, over the fiscal 2024 level of funding. This is the same amount included in your H. 2 budget proposal filed in January, and we are grateful for your early indication of support for this critical municipal aid. With property taxes tightly capped by Proposition 2½, cities and towns rely on state revenue sharing to provide municipal and school services, ensure safe streets and neighborhoods, and maintain vital infrastructure. These services are fundamental to our state’s economic success and competitiveness. We respectfully ask you to support the UGGA funding level included in H. 4800. This is a top priority for municipalities throughout the state, as these funds will be devoted to maintaining the local programs and services that residents rely on every day.
Chapter 70
H. 4800 would fund Chapter 70 aid at $6.8 billion, with an additional supplemental appropriation of $37 million to address additional per-student support for minimum aid districts (items 7061-0008 and 7061-0009, respectively). This reflects an impressive commitment to fund the Student Opportunity Act (SOA) according to the original intended schedule. In addition to keeping the commitment to fund the SOA, and in recognition of the challenges facing “minimum aid” districts that would have received only a $30 per student increase over the previous year, item 7061-0009 increases minimum aid to $104 per student. We respectfully ask you to support these critically needed appropriation levels for school districts across the Commonwealth.
Special Education Circuit Breaker
We strongly support the $492 million included in H. 4800 for Special Education Circuit Breaker (7061-0012), which reimburses school districts for the high cost of educating students with disabilities. We respectfully urge you to support the funding level in H. 4800.
Charter School Mitigation Payments
We strongly support the $199 million in H. 4800 for charter school mitigation payments (7061-9010), which fully funds the state’s statutory obligation for charter school mitigation payments as outlined in the Student Opportunity Act. We respectfully urge you to support the funding level in H. 4800.
School Transportation
H. 4800 level funds regional school transportation (7035-0006) at $99.4 million, representing a reimbursement rate of 84% of DESE’s estimated costs for fiscal 2025. H. 4800 funds the McKinney-Vento account for transportation of homeless students (7035-0008) at $28.6 million, and funds out-of-district vocational transportation (7035-0007) at $1 million. While these transportation accounts do not meet the required funding according to DESE, we ask you to support the appropriations that are currently before you in H. 4800.
PILOT Funding
We strongly support the increased funding for Payments-in-Lieu-of-Taxes (PILOT) for state-owned land included in H. 4800 (1233-2400), bringing the line item to $53 million. This has been a key priority for many years and this amount holds communities harmless from recent property valuation changes. We respectfully urge you to support the funding level in H. 4800.
Rural School Aid
We urge you to support funding Rural School Aid (7061-9813) at $16 million in H. 4800, providing rural school assistance to eligible towns and regional school districts. These grants will help schools facing the challenge of declining enrollment identify ways to form regional school districts or regionalize certain school services to create efficiencies. We respectfully ask you to support the $16 million amount, which is meaningful progress toward the goal set forth in the Commission on the Fiscal Health of Rural School Districts report, “A Sustainable Future for Rural Schools,” released in July 2022. We respectfully urge you to support the funding level in H. 4800.
Surtax Revenue
The voter-approved surtax offers exciting opportunities for dedicated funding to support the significant education and transportation needs of the Commonwealth in fiscal 2025 and beyond. We are grateful for the inclusion of several programs in H. 4800 that would directly benefit municipalities and the residents they serve. To that end, we respectfully ask you to support several surtax investments outlined in the conference report:
• $45 Million for Local Roads and Bridges
H. 4800 includes $45 million in supplemental aid supporting the construction and maintenance of municipal roadways(1596-2428). There are more than 30,000 miles of roads under municipal control, which represents nearly 90% of all road miles statewide. This funding is urgently needed, and 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.
• $10 Million for Green School Works
H. 4800 includes $10 million (1596-2424) for theGreen School Works grant program to provide financial support to K-12 districts to install or maintain clean energy infrastructure. In its second year of funding, the Green School Works program would further invest in our schools while helping to support local climate action and promote energy efficiency.
• $170 Million for Universal School Meals
H. 4800 includes $170 million of surtax funding (1596-2422) to help codify the universal school meals program, allowing all Massachusetts students to eat for free at school, regardless of household income.
Outside Sections
In addition to the appropriations made in H. 4800, the Legislature also included a number of outside sections in the budget bill. We urge you to give careful consideration to the impacts of these policy sections on cities and towns and appreciate the opportunity to give further context on these issues. It is our hope that you will use the power of your office to make recommendations back to the Legislature through the use of amendments to improve upon the bill before you.
Tax Title Foreclosure Process
As part of the fiscal 2025 budget, the Legislature included provisions aimed at addressing the Tax Title foreclosure process. In 2023, the U.S. Supreme Court ruled that municipalities would no longer be able to automatically keep excess equity from a tax foreclosure. The case, Tyler vs. Hennepin County, prompted the Legislature to propose changes to the tax title process in order to adhere to the new law.
Since the Tyler decision, the MMA has been working closely with the Legislature to find a legislative solution that would put Massachusetts in compliance with the federal ruling, while also not overburdening municipalities with cumbersome and unnecessary regulations. The MMA supported standalone legislation to this effect (H. 4801), which passed the House in late June.
Unfortunately, as part of the fiscal 2025 budget conference committee report, outside sections were adopted that go well beyond adhering to the Tyler decision, and would negatively impact cities and towns. There are several areas that will be problematic for municipalities, including:
• “Look back” two years prior to the Tyler decision: A retroactive date of May 2021, allowing individuals to pursue claims against municipalities for excess equity, creating an unexpected financial liability, since the Tyler decision did not occur until May 2023. Despite having followed existing law at that time, cities and towns would be financially liable for excess equity claims. As you know, cities and towns across the Commonwealth are facing financial hardship, due to a number of factors, including an overreliance on property taxes and rising costs. Increased financial exposure to excess equity claims would come at the expense of property taxpayers in good-standing. With tight municipal budgets in virtually every municipality, this type of financial exposure would likely translate into reductions in programs and services, reductions in staff, and/or increases in property taxes.
• Reduction of interest rate: H. 4800 reduces the interest rate in tax title from 16% to 8%. Given that a municipality receives an interest rate of 14% for unpaid non-tax title taxes, this change would do little to incentivize a tax delinquent property owner from seeking alternative financing in order to resolve the delinquency. Municipal officials have strong concerns about this lower interest rate exacerbating the issue of unpaid property taxes. As the language in H. 4800 includes the creation of a special commission to study this issue further, we ask that the interest rate be tabled until such a commission could determine potential impacts.
• Public posting: H. 4800 requires municipalities to post notice on a delinquent property by a constable or sheriff due to trespass laws, creating major financial and logistical challenges. Other sections of this bill adequately address notification requirements.
• Requirement of real estate broker: H. 4800 requires municipalities who choose to sell a property to enlist a real estate agent for at least one year before being able to sell the property at public auction. Municipal employees simply do not have the time or the expertise to be operating as real estate brokers for properties that could have gone on the market prior to the tax foreclosure process. We strongly urge removing this section in favor of an auction-only sales process. Moving these properties off the market and into a better use as quickly as possible is in the best interest of the municipality and the public at large.
• Disposition to unclaimed property: In the absence of claimants of excess equity, H. 4800 requires the municipality to turn over any funding to the state’s unclaimed property division at the end of this lengthy process. This prevents unclaimed funding from being reinvested into the community and leveraged for public good.
We respectfully request you to return these sections with an amendment to the Legislature to reach a better compromise on this incredibly important topic. None of the changes that we are requesting would weaken the intent of this legislation, but would provide critically important protections for municipalities and property taxpayers.
iLottery
For over 50 years, the Massachusetts State Lottery has provided financial assistance to cities and towns across the Commonwealth. This key revenue source is essential to the state’s revenue sharing framework. H. 4800 authorizes the Lottery to create an online lottery, or iLottery platform, with revenue from the new platform being directed to early education and care. While state lottery officials have repeatedly stressed that a new lottery platform will not detract from the traditional lottery profits, we remain concerned about any potential impacts, especially without sufficient comparable data from other states. With Unrestricted General Government Aid still below 2008 levels without adjusting for inflation, any threat to properly funding this account is of top concern to local officials. We respectfully ask you to consider adding a “hold harmless” provision as an amendment to protect local aid, while allowing the iLottery platform to be developed.
Disaster Relief and Resiliency Fund
The Legislature’s budget establishes a permanent Disaster Relief and Resiliency Fund (Section 2HHHHHH) to assist municipalities impacted by extreme weather events. An additional section (Section 229) would also direct the state’s comptroller to transfer $14 million from any consolidated net budget surplus for fiscal year 2025 to the Disaster Relief and Resiliency Fund. The MMA has strongly advocated for the creation of the fund and we were grateful to see inclusion of such a fund in your H.2 budget proposal in January. We respectfully request your support for the creation of this fund and this revenue source, which would support rapid-response efforts by cities and towns as they incur emergency response costs due to extreme weather.
Summary
This is a critical time for cities and towns, as inflationary pressures and the constraints of Proposition 2½ have squeezed local operating budgets and impacted key municipal and school services. We are grateful for your support of municipal finances, as well as for your attention to issues that could cause unintended harm to municipal operations.
If you have any questions or need additional information regarding any of the municipal priorities highlighted above, please do not hesitate to have your office contact me or MMA Deputy Legislative Director Jackie Lavender Bird at 617-426-7272 ext. 123, or jlavenderbird@mma.org at any time. We thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.
Sincerely,
Adam Chapdelaine
MMA Executive Director and CEO
cc:
The Honorable Kimberley Driscoll, Lieutenant Governor of the Commonwealth
Secretary Matthew Gorzkowicz , Executive Office of Administration and Finance
Senior Deputy Commissioner Sean Cronin, Division of Local Services