Legislature’s FY16 state budget boosts local aid

After working through some challenging differences on state tax policy and MBTA reform, the House and Senate yesterday approved and sent to Gov. Charlie Baker a $38.1 billion fiscal 2016 state budget bill that increases funding for almost all major local aid accounts.
 
The governor is allowed 10 days to review the enacted budget bill after receiving it. It is not yet clear what line items he might veto or what provisions he might return with suggested amendments.
 
For cities and towns, the budget’s $980 million for the Cherry Sheet Unrestricted General Government Aid account, first recommended by the governor in February and ultimately adopted by the Legislature, marks a welcome but unofficial return to a revenue-sharing policy. The $34 million increase over fiscal 2015 is based on the main municipal aid account increasing in step with growth in the economy and state tax collections.
 
The governor’s UGGA recommendation was based on the account increasing at 75 percent of the growth rate of estimated state tax collections in fiscal 2016, which is 4.8 percent. The increase next year is expected to be pegged at the full estimated rate of growth.
 
Every city and town this year will see its UGGA funding increase by 3.6 percent to help balance local budgets and reduce overreliance on the property tax.
 
The legislative budget includes $4.51 billion for Chapter 70 education aid, an increase of $111 million over fiscal 2015, with a provision providing every city, town and school district an increase of at least $25 per student. Many districts are in the minimum aid category this year.
 
There may be some major changes to Chapter 70 formulas next year based on the work of the Foundation Budget Review Commission.
 
The Legislature also voted to fully fund the Special Education Circuit Breaker program at $272 million, level-fund the kindergarten grant program at $18.6 – to maintain funding for 177 school districts that use these funds – and provide $59 million for regional school transportation reimbursements.
 
The Legislature approved $80.5 million for reimbursements to cover a portion of local school aid losses attributable to charter school tuition payments, and $8.35 million for the mandated transportation of homeless students under the McKinney-Vento Act. These expensive state mandates remain well below the full reimbursement called for under state law.
 
Cherry Sheet METCO payments are funded at $20.1 million, the Shannon Anti-gang grant program receives $7 million, and reimbursements for transportation costs for vocational education students traveling out of local districts are funded at $1.75 million.
 
The Legislature’s budget dedicates up to $10 million of any fiscal 2015 year-end state budget surplus to supplement the fiscal 2016 Community Preservation Act state match. 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. Year-end state surplus amounts have been used over the past few years to supplement lagging deeds excise collections used to fund the match.