MMA asks Ways and Means committees to use surplus to supplement Ch. 90 and CPA funding

The Honorable Aaron Michlewitz, House Chair
The Honorable Michael J. Rodrigues, Senate Chair
The Honorable Ann-Margaret Ferrante, House Vice Chair
The Honorable Cindy F. Friedman, Senate Vice Chair
The Honorable Paul J. Donato, House Assistant Vice Chair
The Honorable Jason M. Lewis, Senate Assistant Vice Chair
The Honorable Todd M. Smola, Ranking House Minority Member
The Honorable Patrick M. O’Connor, Ranking Senate Minority Member
Joint Committee on Ways and Means
State House, Boston

Delivered Electronically

Dear Chair Michlewitz, Chair Rodrigues, and Distinguished Members of the House and Senate Committees on Ways and Means:

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association very much appreciates your support for local government. We look forward to working with you and your colleagues in the House and Senate as you finalize state spending for fiscal 2021 through a close-out supplemental budget, one that reflects your strong commitment to communities as they recover from the impacts of the COVID-19 pandemic.

During the close-out of fiscal 2021, we appreciate that one of the Legislature’s priorities will be to use a significant portion of surplus tax revenues to replenish the state’s stabilization account. This will be an important step to ensure the state’s long-term fiscal health and resilience going forward, an action made much easier by the infusion of new American Rescue Plan Act federal funds that will be available for a wide range of investments, including water, sewer, and broadband infrastructure. This is also a time to use the state’s envious fiscal position to make vital investments in areas not covered by ARPA, and as such, we ask you to prioritize supplemental funding for the Chapter 90 local road program in your final fiscal 2021 budget bill. Though supplemental funding has been included for Chapter 90 in recent fiscal years, H. 4078 does not include any additional funds for critical road and bridge infrastructure.

Chapter 90
As you know, municipal and state ARPA funds provided through the Coronavirus State and Local Fiscal Recovery Fund are largely not available for transportation-related investments.

There are only two ways a municipality can leverage ARPA funds for transportation-related costs, and neither provides significant funding for addressing municipalities’ infrastructure needs. While ARPA technically allows use of funds calculated as “revenue replacement” to be used for general government services, many municipalities will not realize a substantial amount of funds from this calculation. Further, the only road work covered under the water and sewer eligible expense category in ARPA is surface repaving for ARPA-eligible water and sewer projects – hardly the type of major road and bridge investments that municipalities desperately need.

On behalf of communities across the Commonwealth, we are respectfully and urgently asking for a supplemental $200 million cash appropriation for the Chapter 90 program, in addition to the recently passed Chapter 90 bond. This investment would address a vital long-term need that is essential to our recovery and growth.

As you know well, municipalities spend far less on road maintenance and repairs than the estimated annual expenditure of $600 million that is needed to get our municipal road infrastructure system to a state good repair. With a tightly capped property tax, and federal funds that cannot be adequately leveraged for roads and bridges, communities do not have the resources to close this massive $400 million gap.

Community Preservation Act Trust Fund
We support the recommendation in H. 4078 to allocate $10 million to the Community Preservation Act Trust Fund. When the Community Preservation Act was signed over 20 years ago, the intent was for participating communities to receive a 100% match as an incentive. As the number of participating municipalities grew, the state match percentage decreased among competing budget priorities.

As you know, in fiscal 2020, the state budget included an increase in recording fees at the registries of deeds in order to provide additional revenue for the statewide CPA Trust Fund, which was headed toward single-digit percentage matches at that time. According to estimates issued by the Department of Revenue on April 14, 2021, participating municipalities were advised to use 32.3% as the figure for budgeting the CPA match for fiscal 2022. The Community Preservation Coalition estimates that the additional $10 million proposed in H. 4078 could increase the fiscal year match percentage by 3-4 percentage points, a meaningful increase for municipalities investing in affordable housing, open space, outdoor recreation, and historic preservation.

Thank you for your continued support for cities and towns on so many issues. This is the time to make progress in our economic recovery, which will need to include local transportation funding needs and further strengthen state and local partnerships. If you have any questions regarding our comments or require additional information, please do not hesitate to contact MMA Legislative Analyst Jackie Lavender Bird at 617-426-7272, ext. 123, or jlavenderbird@mma.org at any time.

Sincerely,

Geoffrey C. Beckwith
MMA Executive Director & CEO