As budget moves to House, MMA outlines municipal needs

Following six weeks of hearings on a $40.9 billion state budget bill filed by Gov. Charlie Baker in January, the House is on track to approve a fiscal 2019 spending plan this month.
 
The House Ways and Means Committee is expected to release a budget plan by mid-April, with a final House budget expected to be approved by May 1. The Senate should wrap up its version of the budget by the end of May, with a target of sending a final legislative bill to the governor by the start of the new fiscal year on July 1.
 
At a March 19 public hearing in Peabody held jointly by the House and Senate Ways and Means committees on municipal and school aid, a panel of MMA members and municipal officials told legislators that local officials strongly support the governor’s recommendation of a 3.5 percent increase in the main municipal aid account, known as Unrestricted General Government Aid.
 
The MMA panel, and the association’s written testimony, supported the $37 million UGGA increase for fiscal 2019, which is tied to the 3.5 percent growth forecast for state tax revenues included in the “consensus” revenue estimate agreed to by the governor and House and Senate Ways and Means committees. This was noted as a top priority for cities and towns across the state.
 
The MMA panel also urged lawmakers to do better than the governor’s recommendation for the main education aid accounts, including Chapter 70, charter school mitigation payments, and the Special Education Circuit Breaker program.
 
The MMA panel was led by MMA President and Gardner Mayor Mark Hawke, MMA Vice President and Norwell Selectman Ellen Allen, and Athol Town Manager Shaun Suhoski, representing the Small Town Administrators of Massachusetts. The panel was joined by the host for the hearing, Peabody Mayor Ted Bettencourt.
 
Chapter 70
The MMA panel called for additional funding for Chapter 70 school aid to provide an adequate amount of minimum additional aid next year, which the MMA said should be at least $100 per student. A significant majority of school districts receive only minimum aid.
 
Under the governor’s recommendation, 201 school districts (63 percent of all operating districts) would receive a Chapter 70 increase of only $20 per student. It was noted that for many districts, this would represent another in a long series of years of receiving only minimum aid, which has forced a growing reliance on the property tax to fund schools – a situation that is not sustainable.
 
The MMA also supported stepping up implementation of the recommendations of the Foundation Budget Review Commission to update the Chapter 70 “foundation budget” minimum spending standards for special education and health insurance costs for school employees. The MMA also called for adding to the spending standard a measure of recognition for the cost of services for low-income, English Language Learner and other students who would benefit from more intensive services beyond the first steps taken this year and in the governor’s recommendation for fiscal 2019.
 
Special Education Circuit Breaker
The MMA and local officials asked for full funding of the Special Education Circuit Breaker program, through which the state provides a measure of support for services provided to high-cost special education students. The preliminary estimate used by the MMA shows that the governor’s $291 million recommendation would underfund reimbursements by approximately $28 million.
 
The MMA also noted that reimbursements are underfunded for fiscal 2018 by an estimated $25 million. The MMA has asked the governor and the House and Senate Ways and Means committees to include full funding in a supplemental budget bill.
 
Charter school reimbursements
The MMA panel told legislators that the diversion of Chapter 70 school aid from local public schools to pay tuition to charter schools has imposed a major and growing financial burden on cities and towns. This problem has been made more acute as the state grants more charters and existing charter schools expand.
 
MMA testimony supported full funding of the Commonwealth’s statutory commitment to reimburse school districts for the loss of a portion of their Chapter 70 aid that is used to fund charter schools. In fiscal 2019, it is expected that assessments on cities and towns to support charter schools will increase by $66 million (about 11 percent) to $663 million. The governor’s proposed level-funding of the mitigation account at $80.5 million would result in a shortfall of $90 million, based on current estimates.
 
Student transportation reimbursements
Another important budget priority included in MMA testimony was additional funding to help cities, towns and school districts with the cost of transporting schoolchildren, including the main regional school district reimbursement program, the homeless student transportation program (McKinney-Vento) – which the state auditor has ruled is an unfunded mandate on cities and towns – and reimbursements for a portion of the mandatory cost of transporting students to out-of-district placements in vocational schools.
 
Payments in lieu of taxes (PILOT)
The MMA also supported full funding of the Commonwealth’s obligations to the program for payments in lieu of taxes for state-owned land (PILOT), which is particularly important for cities and towns that host and provide municipal services to state facilities that are exempt from the local property tax.