House OK’s FY16 state budget bill with local aid increases

On April 29, House members unanimously approved a $38.1 billion state budget bill for next year that is largely in line with the plan filed by Gov. Charlie Baker in March when it comes to funding for municipal and school aid, though there are increases in a few key areas.
 
The House budget includes $979.8 million for Cherry Sheet Unrestricted General Government Aid, a $34 million increase over current funding, and the same increase proposed by the governor. This would be the largest increase in discretionary municipal aid in nearly a decade. Every city and town would see its UGGA funding increase by 3.6 percent.
 
Chapter 70 education aid would be funded at $4.5 billion, an increase of $108 million over the fiscal 2015 level and $2.9 million more than the governor proposed. The House calculated required local contribution and school aid amounts in the same way as the governor, but increased the new “minimum aid” amount from $20 per student to $25. During debate, the House did not adopt an MMA-supported amendment to raise minimum aid to $50 per student.
 
The House budget bill would increase overall state expenditures by less than 3 percent, as the state seeks to close a projected $1.8 billion structural budget deficit by restraining spending and eliminating 4,500 state jobs through an early retirement program.
 
The House supported full funding for the Special Education Circuit Breaker program. The budget bill would provide $261.7 million, an increase of $8.3 million above fiscal 2015, with the intention of fully funding the account.
 
The House added $5 million to regional school student transportation reimbursements over the governor’s recommendations, for a total of $56.5 million, and added $1 million to fiscal 2016 reimbursements for the transportation of homeless students, bringing it to $8.4 million.
 
The House restored $18.6 million to the Kindergarten Development Grant program. The governor’s budget would have eliminated all funding.
 
Both the governor and the House would level-fund at $76.8 million reimbursements due to cities and towns losing state education aid to charter schools, which would guarantee another major shortfall in fiscal 2016. Increasing this account is a top priority for municipalities and school districts, but House members rejected an MMA-supported amendment that would have raised funding to $130.5 million.
 
Under state law, cities and towns that host or send students to charter schools are entitled to be reimbursed for a portion of their lost Chapter 70 aid. The state fully funded the reimbursement program in fiscal 2013 and 2014, but is underfunding reimbursements by approximately $34 million this year.
 
The House budget would level-fund payments in lieu of taxes at $26.8 million, continue to fund library grant programs at $18.5 million, and restore funding for METCO to $20.14 million.
 
During debate, the House adopted an amendment to add $1 million to the Shannon anti-gang grant program, providing an appropriation of $6 million.
 
The House budget includes a number of proposed law changes, including a provision that would prevent the practice of “pay the patient” by insurance companies, which undermines the ability of cities and towns to fund and operate effective and efficient ambulance services that are at the core of emergency medical response in Massachusetts. “Pay the patient” forces communities to pursue their own residents to recoup thousands of dollars in ambulance expenses, a system that is inefficient and subject to abuse. The amendment would also clarify that municipalities are authorized to set a fair rate for ambulance services, preventing insurance companies from shifting costs to local property taxpayers through below-cost reimbursements.
 
House members voted to dedicate up to $10 million of any fiscal 2015 year-end state budget surplus to supplement the fiscal 2016 state match for the Community Preservation Act. During fiscal 2015, 156 cities and towns collected the local CPA surcharge and are eligible for state matching grants in fiscal 2016. The Division of Local Services estimates that the balance in the state trust fund will be sufficient to provide a first round match of only 18 percent of the surcharge levied by each city and town – the lowest state match in the program’s history.
 
State budget action now moves to the Senate. The Senate Ways & Means Committee is expected to release its proposed budget by mid-May, and the full Senate is expected to pass its version before the end of the month.