Senate OK’s FY25 state budget that would increase key local accounts

The Senate has approved a $57.9 billion state spending plan for fiscal 2025 that would make several significant investments in schools and municipalities.

The Senate’s bill would increase the main discretionary local aid account by 3% over the current fiscal year, and lift Chapter 70 minimum new aid from $30 per pupil to $110.

The Senate budget would also provide $125 million in supplemental funding for local roads and bridges, $15 million for bridges and culverts, and a $1.5 million increase for payments-in-lieu-of-taxes for state-owned land.

The Senate spent three days on its budget debate, considering 1,100 amendments. The Senate vote took place just after midnight this morning.

UGGA
The Senate adopted the recommendation of the Senate Committee on Ways and Means for a 3% increase in Unrestricted General Government Aid, which would increase the account by $38.1 million over fiscal 2024. The MMA and local officials have been advocating for a 3% increase in the UGGA account, which provides essential funding for vital municipal and school services to residents and businesses.

Chapter 70
The Senate budget would increase Chapter 70 education aid by $311 million over the current fiscal year, for a total of $6.9 billion. The Senate budget would continue to fund the Student Opportunity Act on its intended schedule.

In recognition of the challenges faced by minimum-aid-only school districts, the Senate budget would provide $40 million to raise the minimum new aid amount from $30 per student to $110, which would benefit 230 of the state’s 318 public school districts. This much-appreciated minimum aid increase is a top priority for cities and towns, and would have a tremendous impact on schools across the Commonwealth.

Charter schools
The Senate included $199 million for charter school mitigation payments, which would cover 100% of the state’s statutory obligation as outlined in the Student Opportunity Act.

Special education
The Senate budget includes $492 million for the Special Education Circuit Breaker account, matching the governor’s budget proposal. While this would be a slight decrease from fiscal 2024, both budget plans look to leverage $75 million included in a fiscal 2023 closeout supplemental budget to fully fund the state’s obligation.

Rural schools
The Senate adopted an amendment to increase Rural School Aid by $2.5 million over the current fiscal year, funding the account at $17.5 million for eligible towns and regional school districts. The rural schools grant program helps districts that are facing declining enrollments to identify ways to form regional school districts or regionalize certain school services to create efficiencies.

School transportation
The Senate budget would fund regional school transportation aid at $99.7 million, an increase of $2 million over the current year. This amount represents approximately 84% of anticipated claims, according to the most recent estimates from the Department of Elementary and Secondary Education.

The budget would level-fund the account for transportation of homeless students under the federal McKinney-Vento program at $28.6 million, representing approximately 71% of estimated claims.
The Senate budget level funds out-of-district vocational transportation, at $1 million, for fiscal 2025.

PILOT
The Senate budget would increase payments-in-lieu-of-taxes (PILOT) for state-owned land by $1.5 million. This account is critical for cities and towns with large amounts of state-owned lands.

Outside sections
The Senate adopted several amendments as outside sections in its budget:

• Chapter 70 working group: In recognition of local school funding challenges, the Senate budget would create a Chapter 70 Task Force, including a designee from the MMA, to study and make recommendations on various aspects of the Chapter 70 formula, including issues related to required local contribution calculations, impacts on minimum aid districts, and issues of low and declining student enrollment.

• MSBA special commission: The Senate budget would establish a special commission, including a designee from the MMA, tasked with studying and making recommendations regarding the Massachusetts School Building Authority’s capacity to meet the needs of current and future school facility projects.

• Tax title: The Senate adopted an amendment related to the tax title foreclosure process, which would impact liens on properties due to nonpayment of property taxes. The MMA will be advocating for a legislative solution that appropriately adheres to a U.S. Supreme Court decision last year while protecting taxpayers and municipalities.

Next steps
In the coming weeks, the House and Senate are expected to appoint a six-member conference committee to work out differences between their two state spending plans, with the goal of presenting a final legislative budget to the governor by the beginning of the fiscal year on July 1.