MMA asks House members to support and build on investments in FY25 state budget bill

Dear Representative,

We are writing to express our deep appreciation for the many provisions in the House Ways and Means Committee budget proposal (H. 4600) that benefit and support cities and towns across the Commonwealth, and we welcome the opportunity to offer insights on proposed amendments that will be before you next week, during your deliberations on the fiscal 2025 state budget.

We are grateful to Speaker Mariano, Chair Michlewitz, and the members of the House Ways and Means Committee for their commitment to cities and towns by increasing several key local accounts, including funding year four of six of the landmark Student Opportunity Act, and increasing Chapter 70 minimum aid to $104 per pupil. This increase to Chapter 70 minimum aid is a top priority for cities and towns, and this investment would have a tremendous impact on schools across the Commonwealth. Under the House 2 proposal, 228 school districts, out of 318 statewide, would have received new Chapter 70 aid of less than $104 per student. The House Ways and Means Committee proposal makes a strong statement by lifting up these districts.

The House Ways and Means Committee proposal fully funds the state’s statutory requirement for Charter School Mitigation payments and the Special Education Circuit Breaker program. In addition, the proposal includes continued support for universal school meals, which has had a tremendous impact on student nutrition and success across the Commonwealth. The House Ways and Means proposal also creates a Disaster Relief and Resiliency Fund, to aid municipalities negatively impacted by extreme weather events. These are all critically important investments, and demonstrate leadership and a powerful commitment to municipalities and school districts.

Please Support the Following Key Municipal and Education Amendments

In this letter, we are respectfully asking you to support appropriation amendments to build on the progress included in the House Ways and Means proposal:

Amendment #1347 (Local Aid) – Please increase Unrestricted General Government Aid (UGGA) in fiscal 2025. As you know, cities and towns are struggling with increased costs, inflationary pressures, and local revenues that are capped by Proposition 2½. Communities are facing extremely tight budgets and very difficult and painful choices. Because of this, a primary focus this year is increasing Unrestricted General Government Aid (1233-2350), which represents the critical revenue-sharing partnership between state and local government. As this is the sole account that provides discretionary aid to municipalities, we urge consideration of increasing this account to provide an increase to UGGA of at least 3% over the current fiscal year.

To that end, we offer our enthusiastic support for Amendment #1347, filed by Rep. Fiola. This amendment would help address key municipal needs by raising the UGGA account from a 1% increase to 3%, which would match the increase in the Governor’s House 2 proposal. This is similar to the Legislature’s very welcome action on UGGA last year, where the final budget provided an UGGA increase of 3.2% over the previous year, providing much-needed relief to communities across the state.

Amendment #390 (Regional School Transportation) – Please support Amendment #390, filed by Rep. Scarsdale, to fund the regional school transportation account (7035-0006) at $121 million. This amount reflects full funding of the reimbursement rate of fiscal 2025 for estimated claims from the Department of Elementary and Secondary Education.

Amendment #1052 (Rural School Aid) – Please support Amendment #1052, filed by Rep. Blais, to bring the Rural School Aid account to $15 million, which would level-fund this important account (7061-9813).

Amendment #772 (Vocational School Transportation) – Please support Amendment #772, filed by Rep. Ferguson, to fund the out-of-district vocational transportation account (7035-0007) at $1.5 million. This amount reflects an increase of $500,000 over fiscal 2024, and a reimbursement rate of approximately 26% of the fiscal 2025 estimated claims from the Department of Elementary and Secondary Education.

Amendment #1031 (Chapter 90 Roads and Bridges Supplemental Aid) – Please support Amendment #1031, filed by Rep. Ciccolo, to increase funding for local roads and bridges (1596-2428) by $75 million. This supplemental funding for municipalities to repair local roads and bridges is critically important, and we appreciate the House Ways and Means Committee for including $25 million in the H.4600 proposal. With the adoption of this amendment, this account would be level-funded from fiscal 2024.

Amendment #1067 (JLMC Municipal Police and Fire) – Please support Amendment #1067, filed by Rep. Cahill, to increase support for the important operation of the Joint Labor-Management Committee for Municipal Police and Fire.

Amendment #63 (Local and Regional Public Health Excellence Grants) – Please support a further $5.8 million increase to the Local and Regional Public Health Excellence Grants account (4512-2022), filed by Rep. Kane.

Amendment #1401 (Shannon Grant) – Please support Amendment #1401, filed by Rep. Madaro, to increase funding for the Shannon Grant program (8100-0111) by $500,000. This anti-gang grant program helps cities and towns respond to and suppress gang-related activities.

Amendments #98, 144, 145 (Related to Chapter 70 Required Local Contributions) – While the investments made by the Legislature from the Student Opportunity Act to the Chapter 70 program remain extraordinary, the historic investment in K-12 education aid is causing some additional stress on municipal budgets through the required local contribution. As a result of the rapid growth of the statewide foundation budget, many municipalities are finding it challenging to meet their required local contributions. To that end, we ask you to consider Amendment #98, filed by Rep. Donato, and Amendments #144 and 145, filed by Rep. Ultrino, which would study and address issues of hardship related to municipal contributions.

Strengthening Municipal Finances in Fiscal 2025 and Beyond

Preserving the Lottery as the Foundation of Unrestricted Local Aid
As we discuss the need for a strong state-local fiscal partnership, the conversation also involves the largest revenue source that the state uses to fund local aid: the Massachusetts State Lottery. Over 50 years ago, the Lottery was established for the sole purpose of supporting cities and towns. According to the State Lottery Commission, in the most recently completed fiscal year (fiscal 2023) the Lottery generated $1.193 billion in net proceeds to the state, supporting approximately 97% of the Commonwealth’s annual appropriation for Unrestricted General Government Aid.

An outside section of the House Ways and Means proposal would authorize an online Lottery (iLottery). We greatly appreciate the interest in expanding Lottery operations to compete in a rapidly changing market. But due to the overwhelming needs of local government, the MMA strongly urges against the use of iLottery proceeds for programs outside of local aid, even for incredibly laudable causes. The MMA is concerned that an expansion to online platforms could adversely affect revenue raised by the Lottery’s traditional in-person products.

For this reason, as this measure moves through the Legislative process, the MMA respectfully urges that online Lottery proceeds be exclusively used for the Lottery’s intended focus, which is to support Unrestricted General Government Aid. This is consistent with the Lottery’s mission to serve cities and towns, and necessary to protect a vital revenue stream that accounts for the overwhelming amount of discretionary local aid that cities, towns, and taxpayers rely on to fund essential municipal and school services and balance local budgets.

Summary
Again, we would like to express our gratitude to Speaker Mariano, Chair Michlewitz, and the members of the House Ways and Means Committee for presenting a fiscal blueprint that makes important and timely investments in cities and towns across the state. Local governments are excited to build on their partnership with state leaders to tackle the critical issues facing the Commonwealth right now — from economic challenges and housing, to climate change mitigation, transportation, and public health. In order to be full partners in advancing these vital priorities, communities need fiscal stability at the local level. The investments made in the House Ways and Means proposal, combined with the priority issues outlined above, will strengthen local governments and give them the capacity to advance these shared goals.

If you have any questions, please do not hesitate to have your office contact me, MMA Senior Executive and Legislative Director Dave Koffman at dkoffman@mma.org, or Deputy Legislative Director Jackie Lavender Bird at jlavenderbird@mma.org at any time.

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