Gov. Healey files FY25 state budget proposal

Gov. Maura Healey today filed her $58.1 billion state budget plan for fiscal 2025, which includes funding for local accounts that she announced last week at the MMA’s Annual Meeting.

Healey’s budget bill, known as House 2, would increase the main discretionary local aid account by 3% over fiscal 2024, while increasing Chapter 70 school aid by $263 million, which would honor state commitments made in the 2019 Student Opportunity Act.

The governor also proposed $100 million for supplemental local road and bridge funding — as was done in the budget for the current fiscal year — as well as $24 million for rural roads.

The Division of Local Services has posted preliminary fiscal 2025 Cherry Sheet aid amounts, based on House 2, for individual cities and towns and for regional school districts.

“As we head into a year that is expected to see slower growth in state tax collections, Gov. Healey and Lt. Gov. Driscoll have created a fiscal blueprint that recognizes many of the challenges facing cities and towns,” said MMA Executive Director and CEO Adam Chapdelaine. “Local officials look forward to working with the Healey-Driscoll administration and the Legislature to build on this proposal to secure vital investments in our schools and essential municipal services, and continue a strong state-local partnership.”

As companion legislation, the governor on Monday filed her Municipal Empowerment Act, a reform and resources package intended to improve efficiencies for municipalities.

The governor’s state budget proposal is the first step in a months-long process. The House and Senate Ways and Means committees are expected to host a budget hearing in mid-March on municipal and school aid for fiscal 2025, and the House will debate its budget bill in April, with the Senate deliberating its own bill in May. The Legislature will work to get a final budget bill to the governor by the beginning of the fiscal year on July 1.

Unrestricted General Government Aid
Healey is proposing an increase of $38.1 million (3%) in the Unrestricted General Government Aid account, which is higher than the 2% consensus forecast for state tax revenue growth that was announced in January. The MMA will be working closely with lawmakers to advocate for an adequate funding level for UGGA to maintain essential municipal services.

Chapter 70
House 2 would continue implementation of the funding schedules in the Student Opportunity Act, bringing Chapter 70 school aid up to $6.86 billion.

An initial examination of the Chapter 70 proposal indicates that 211 of 318 operating districts (66%) would receive only the minimum $30 per-student increase in the Student Opportunity Act. The Legislature set minimum aid at $60 per student in the fiscal 2023 and 2024 state budgets, and the MMA will continue to strongly advocate for minimum aid of $100 per student to ensure that all districts can at least keep pace with inflation and maintain their school services.

• See the Department of Elementary and Secondary Education’s calculation of fiscal 2025 Chapter 70 aid and net school spending requirements for individual cities, towns and regional school districts based on House 2 (including preliminary fiscal 2025 charter school assessments and reimbursements)

Charter school reimbursements
House 2 would fund charter school reimbursements at $199 million, intended to meet the state’s statutory obligation to mitigate Chapter 70 losses to charter schools as outlined in the Student Opportunity Act.
While the proposed budget meets the state’s obligation, the MMA continues to highlight the serious flaws in the overall charter school finance system.

Special education circuit breaker
House 2 would fund the Special Education Circuit Breaker program at $492.2 million. The administration intends to leverage $75 million in special education funding from the fiscal 2023 closeout supplemental budget to provide a total of $567 million for the Special Education Circuit Breaker.

Rural school aid
House 2 would level-fund Rural School Aid for eligible towns and regional school districts at $15 million. The grant program helps districts facing the challenge of declining enrollment to identify ways to form regional school districts or regionalize certain school services to create efficiencies.

The MMA will continue to advocate to bring this account closer to the $60 million recommended by the Commission on the Fiscal Health of Rural School Districts in its 2022 report, “A Sustainable Future for Rural Schools.”

Regional school transportation
House 2 would increase funding for regional transportation reimbursements from $97 million in the current fiscal year to $99.4 million. The administration says its proposed funding level would reimburse districts for approximately 80% of local costs.

Out-of-district vocational school transportation
Reimbursements for the transportation of out-of-district vocational students would be level-funded at $1 million. This account has been underfunded for years, and represented reimbursement of only 17% of anticipated claims this year as calculated by the Department of Elementary and Secondary Education.

McKinney-Vento
House 2 would fund reimbursements for the transportation of homeless students under the federal McKinney-Vento Act at $28.6 million for fiscal 2025. The administration says this represents 93% of anticipated claims. The impact of this funding level would vary from community to community, depending on the number of homeless families that are sheltered in local hotels and motels.

PILOT
House 2 would fund payments-in-lieu-of-taxes at $51.8 million, an increase of $335,000. This amount is intended to ensure that no municipality sees a decrease in its overall PILOT payments due to recent valuation changes.

Local road and bridges supplemental aid
In House 2, the governor recommends using $124 million of surtax revenue from the Fair Share amendment for supplemental local road and bridge funding. This amount would be in addition to the annual Chapter 90 bond authorization. The budget would dedicate $24 million for rural communities, and the remaining $100 million would be distributed based on a formula factoring population, road miles and employment.

iLottery
The governor’s budget includes an outside section that would allow the Massachusetts Lottery to create an online, or iLottery, platform. The mission of the Lottery for more than 50 years has been to provide funding to cities and towns, so the MMA will watch this development closely to ensure that any proceeds from an iLottery do not undercut the traditional Lottery proceeds. The governor’s proposal simply allows for the creation of the platform; it does not specify how proceeds would be allocated.

Disaster Relief Fund
Another outside section in the governor’s budget would establish a state disaster relief fund, intended to provide relief to municipalities impacted by extreme weather events.