This alert this afternoon from the Massachusetts Municipal Association -
MMA Alert: Wednesday, January 22, 2014
Governor Files Disappointing FY 2015 State Budget
Unrestricted Municipal Aid Level Funded at $920 Million
Chapter 70 Receives 2.3% Increase of $99.5 Million
SPED Circuit-Breaker Underfunded by $10 Million
McKinney-Vento Reimbursements Underfunded
Charter School Reimbursements Underfunded
Payments-in-Lieu-of-Taxes (PILOT) Cut by $500K
Earlier this afternoon, Gov. Deval Patrick filed his fiscal 2015 state budget with the Legislature, a $36.4 billion plan that increases state spending by 4.9%, but level funds Unrestricted General Government Aid (UGGA), provides a tepid 2.3% Chapter 70 increase, and level-funds and underfunds most other municipal and education accounts.
With state tax revenues increasing by $1.14 billion, it was expected that Gov. Patrick would share at least some of those funds with cities and towns, especially in UGGA funding, because direct municipal aid was cut so deeply during the recession, and is nearly $400 million below fiscal 2008 levels.
The Governor’s budget is a significant disappointment. Cities and towns are struggling to rebuild their finances after several challenging years. The fiscal 2015 spending plan filed today would freeze unrestricted local aid, provide only minimum amounts for K-12 education, and would underfund almost all other key municipal and school programs.
Budget action now shifts to the Legislature, and it will be vitally important for local leaders to tell their Representatives and Senators that the Governor’s budget is inadequate, and would force cuts in essential municipal and school programs, trigger even higher reliance on the overburdened property tax, and prevent new investments in the basic services that build our economy.
UNRESTRICTED GENERAL GOVERNMENT AID (UGGA) LEVEL FUNDED
The Governor’s budget would level fund UGGA at $920 million. This is the main municipal aid account that communities rely on to fund police and fire protection, public works, libraries, parks, recreation programs, senior and youth programs, and public education. With the cost of these services increasing every year, level funding local aid would force cuts in these essential services, increase reliance on property taxes, or both. Cities and towns had asked the Governor to increase unrestricted local aid by the same rate that state revenues are increasing – 4.9 percent. Local aid should grow at the same pace as the Massachusetts economy, which would require a $45 million increase. Unfortunately, by level-funding local aid, the Governor’s budget would create a new modern record – cities and towns would be more reliant on the property tax than at any time since the implementation of Proposition 2½ thirty-three years ago.
Click Here to Link to the Governor’s Proposed Cherry Sheet Aid Amounts.
CHAPTER 70 SEES BELOW-INFLATION INCREASE
The Governor’s budget announcement states that Chapter 70 would reach record levels. However, the Administration is proposing an increase of $99.5 million, or 2.3 percent. Most cities, towns and school districts would receive a minimum aid increase of only $25 per student. 59 districts would receive foundation aid, and 94 districts would receive an increase to partially fund the 2007 “target share” provisions. At $99.5 million, this Chapter 70 increase would be one of the smallest since the passage of education reform in 1993, twenty years ago. Please tell your legislators that Chapter 70 must receive a higher increase to prevent cuts and distress in many school districts across the state.
Click Here to Link to DESE’s Chapter 70 Calculation Spreadsheets for Your Community.
SPECIAL EDUCATION CIRCUIT BREAKER UNDERFUNDED
The Governor’s budget would level-fund the Special Education Circuit Breaker program at $252.5 million. Because special education costs are expected to rise by approximately 5 percent or more, this means that the Governor’s budget would underfund reimbursements by $10 million to $15 million. This is a vital account that every city, town and school district relies on to fund state-mandated services. Please tell your legislators that you deeply appreciate their efforts to fully fund the program for the past two years. The Governor’s budget would translate into a significant cut for every community in the state.
McKINNEY-VENTO REIMBURSEMENTS UNDERFUNDED
The Governor’s budget would level-fund reimbursements for the transportation of homeless students at $7.4 million, which is at least $4 million below the full reimbursement called for under the state’s unfunded mandate law. Two years ago, the State Auditor ruled that the adoption of the federal McKinney-Vento law imposed an unfunded mandate on cities and towns. The program was funded at $11.3 million in fiscal 2013 and $7.4 million in fiscal 2014. By level-funding the program, the Governor’s budget would ignore the Auditor’s ruling and impose a significant burden on those cities and towns that are providing transportation services to homeless children who have been placed in communities by the state.
CHARTER SCHOOL REIMBURSEMENTS UNDERFUNDED
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, but is underfunding reimbursements by approximately $28 million this year. The Governor’s budget would level-fund charter school reimbursements at $75 million, which would guarantee a major shortfall in fiscal 2015. Please tell your legislators that underfunding the charter school reimbursement program causes major fiscal distress in every community that has a significant charter school presence. Only a small fraction of the public school students attend charter schools. Underfunding this program would force cutbacks for the vast majority of students who remain in the traditional school setting.
REGIONAL SCHOOL TRANSPORTATION REIMBURSEMENTS LEVEL FUNDED
The Governor’s budget would level-fund regional school transportation reimbursements at $51.5 million. This account is already underfunded, and freezing the appropriation would force communities to absorb the increased costs due to fuel and inflation. Please thank your legislators for increasing this program in recent years, and ask them to provide the funding necessary to prevent deeper budget woes in dozens of school districts.
PAYMENTS-IN-LIEU-OF-TAXES (PILOT) CUT BY $500K
The Governor’s budget would slice $500,000 from PILOT payments, cutting this already underfunded program from $26.77 million to $26.27 million. Communities use these funds to offset the expense of hosting and providing emergency response services to state-owned property within their borders. Please tell your legislators that funding this program is a matter of fairness, and underfunding the program harms a large number of small and rural communities.
SHANNON ANTI-GANG GRANTS WOULD RECEIVE $1 MILLION MORE
The Governor’s budget would increase funding for the Shannon Anti-Gang Grant program from $7 million to $8 million.
PLEASE CALL YOUR REPRESENTATIVES AND SENATORS TODAY – INFORM THEM THAT THE GOVERNOR’S BUDGET PROPOSAL FALLS FAR SHORT OF WHAT IS NECESSARY. FREEZING MUNICIPAL AID AND OFFERING MINIMUM EDUCATION FUNDING WILL FORCE HIGHER RELIANCE ON THE PROPERTY TAX, TRIGGER SERVICE REDUCTIONS IN CITIES AND TOWNS ACROSS THE STATE, AND PREVENT NEEDED INVESTMENTS IN KEY PROGRAMS THAT BUILD OUR ECONOMY.