MMA on state budget


This alert this AM from the Massachusetts Municipal Association on the state budget agreed upon by the Conference Committee, and scheduled for votes today in the legislature.   The highlights:

  • $34 million increase in state local aid funding over current funding.  This will be the largest increase in discretionary municipal aid in nearly a decade.
  • MBTA reforms get half a loaf, by creating a financial oversight board, but not giving it authority of the binding arbitration awards, which are the biggest cost driver. –

Wednesday, July 8, 2015

LEGISLATURE AGREES ON $38.1B FY 2016 STATE BUDGET THAT INCLUDES FUNDING FOR KEY MUNICIPAL AND SCHOOL AID PROGRAMS

STATE BUDGET CONFERENCE COMMITTEE REPORT SCHEDULED FOR VOTES IN HOUSE AND SENATE TODAY, HEADED TO GOVERNOR’S DESK

LEGISLATURE’S BUDGET INCREASES UGGA BY $34M, ADDS $18.1M TO FULLY FUND SPECIAL EDUCATION CIRCUIT BREAKER, RESTORES $7.5M TO REGIONAL SCHOOL TRANSPORTATION, FUNDS CH. 70 MINIMUM AID AT $25 PER STUDENT, PROTECTS $18.6M FOR KINDERGARTEN DEVELOPMENT GRANTS, ADDS $3.6M TO CHARTER SCHOOL REIMBURSEMENTS

Eight days into the new fiscal year, House and Senate budget negotiators have reached agreement on a $38.14 billion state budget, a fiscal 2016 budget plan that will be approved later this afternoon by votes in each branch. The Governor will have ten days to review, approve or veto hundreds of line item appropriations and outside sections. In the meantime, the state is maintaining operations through a temporary budget that runs through the end of July.

As proposed by the House-Senate budget conference committee, the Legislature’s fiscal 2016 state budget (H. 3650) would increase overall expenditures by approximately 3.5 percent, as the state seeks to close a projected $1.8 billion structural budget deficit by restraining spending and eliminating up to 5,000 state jobs through a hiring freeze, attrition and an early retirement program.

In terms of local aid, the Legislature’s budget provides strong progress on many important municipal priorities, including the significant victory in embracing the $34 million increase in Unrestricted General Government Aid as proposed by Gov. Baker and requested by the MMA. Beyond that, the Legislature has added more than $50 million to key municipal and education aid accounts and reimbursement programs above the amount recommended by the Governor in his March budget proposal. This is a major victory for cities and towns that was made possible by your strong advocacy.

The budget would expand the earned income tax credit for low-income workers by an estimated $71 million, and fund that expansion by eliminating a corporate tax break on recognized income. The Senate had proposed a freeze on the scheduled decrease in the state income tax rate, but that provision was not included in the budget.

The House and Senate compromised on MBTA reform language. In a win for Gov. Baker, the Legislature’s budget includes a three-year suspension of the Pacheco anti-outsourcing law for the MBTA, and provides for a Fiscal and Management Control Board to oversee the MBTA. The Governor had requested a strong control board with approval over binding arbitration decisions. The Legislature’s version provides for a separate MBTA control board, but does not grant the panel authority over binding arbitration awards.

Here is a summary and status of the key municipal and school funding issues in the Legislature’s fiscal 2016 state budget plan:

SENATE, HOUSE AND GOVERNOR ALL AGREE ON $34 MILLION INCREASE IN UNRESTRICTED MUNICIPAL AID
In a major win for cities and towns, the Senate, House and Governor’s budgets all supported $979.8 million for UGGA, a $34 million increase over current funding.  This will be the largest increase in discretionary municipal aid in nearly a decade.  Every city and town will see their UGGA funding increase by 3.6 percent.

LEGISLATURE EMBRACES $18.3 MILLION INCREASE TO FULLY FUND SPECIAL EDUCATION CIRCUIT BREAKER
In another victory for cities and towns, the Legislature’s budget would fully fund the Special Education Circuit Breaker program.  The House-Senate budget plan would provide $271.7 million, an $18.3 million increase above fiscal 2015.  The Governor’s original budget proposal would have level-funded the program at $253.4 million, but the MMA made full funding a top priority, and the Legislature responded.  This is a vital program that every city, town and school district relies on to fund state-mandated services.

LEGISLATURE’S BUDGET MAINTAINS KINDERGARTEN DEVELOPMENT GRANTS AT $18.6 MILLION
The Legislature’s budget would maintain funding for Kindergarten Development Grants at $18.6 million in fiscal 2016, which is a major victory for the 117 communities and school districts that depend on these funds. The Governor’s budget would have eliminated all funding.  This is an important account, because reducing or eliminating the $18.6 million would jeopardize expanded kindergarten programs all throughout the state.

LEGISLATURE ADDS $7.5 MILLION FOR REGIONAL SCHOOL TRANSPORTATION REIMBURSEMENTS
The Legislature’s budget would restore $7.5 million to regional school transportation funding, providing a total of $59 million for the upcoming year.  Last November, former Gov. Patrick used his 9C budget powers to reduce this important program down to $51.5 million, and Gov. Baker’s fiscal 2016 budget proposal would have kept funding at that level.  The Legislature’s final proposal is a major step forward for communities with regional school districts.

LEGISLATURE BACKS CHAPTER 70 MINIMUM AID OF $25 PER STUDENT
The Legislature’s budget is proposing a $111.2 million increase in Chapter 70 education aid, with a provision providing every city, town and school district an increase of at least $25 per student, an improvement over the $20 per student amount originally proposed in March.  The Legislature’s appropriation is $5.9 million more than the recommendation in the Governor’s budget submission, and the increase would be used to ensure the $25 per student minimum aid level and to slightly accelerate the implementation of the target share provisions enacted in 2007

LEGISLATURE WOULD INCREASE CHARTER SCHOOL REIMBURSEMENTS BY $3.64 MILLION, ACCOUNT REMAINS 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 and 2014, but is underfunding reimbursements by approximately $34 million this year (fiscal 2015).  The Governor’s proposed fiscal 2016 budget would have level-funded charter school reimbursements at $76.8 million, which would guarantee another major shortfall in fiscal 2016, and result in cutbacks for the majority of students who remain in the traditional school setting.  The Legislature is proposing a $3.64 million increase up to $80.5 million.  The lawmakers’ action to increase funding is appreciated, yet it is important to remember that the account is still significantly underfunded.

LEGISLATURE ADDS $1 MILLION TO McKINNEY-VENTO REIMBURSEMENTS
The Legislature’s budget would add $1 million to increase fiscal 2016 reimbursements for the transportation of homeless students to $8.35 million, the same funding level proposed by the Governor.  While the account remains below the full reimbursement called for under the state’s unfunded mandate law, this would be the first increase since fiscal 2013.

PAYMENTS-IN-LIEU-OF-TAXES (PILOT), LIBRARY AID ACCOUNTS, METCO, AND SHANNON ANTI-GANG GRANTS, VOKE ED TRANSPORTATION
PILOT PAYMENTS: The Legislature’s budget would level-fund PILOT payments at $26.77 million.
LIBRARY AID: The Legislature would fund library grant programs at $19 million, a $500 thousand increase above fiscal 2015 post-9C levels.
METCO: The Legislature would fund METCO at $20.14 million, a $2.23 million increase above fiscal 2015 post-9C levels.
SHANNON GRANTS: The Legislature is proposing $7 million, the same amount proposed by Gov. Baker in March.
VOCATIONAL EDUCATION TRANSPORTATION: Last year, Gov. Patrick wiped out all fiscal 2015 funding using his 9C powers, and the Legislature’s budget would restore $1.75 million for fiscal 2016.

LEGISLATURE PROVIDES UP TO $10M FOR COMMUNITY PRESERVATION ACT FUNDING
During fiscal 2015, 156 cities and towns collected the local Community Preservation Act (CPA) surcharge and are eligible for state matching grants in fiscal 2016.  The Division of Local Services (DLS) 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.  This would be the lowest state match in the program’s history.  Knowing this, the Legislature’s budget would devote up to $10 million of any fiscal 2015 year-end state budget surplus to supplement the fiscal 2016 state match, a significant boost for all CPA communities.  Gov. Baker did not include a matching provision in his proposed budget.

MUNICIPAL EMERGENCY MEDICAL SERVICES NOT INCLUDED IN BUDGET
Although the House and Senate budgets each included differently worded provisions prohibiting “pay the patient” practices by insurance companies for ambulance services, the Legislature’s final budget does not include any language addressing this problem.  “Pay the patient” 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 and 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 House had adopted an amendment to ban “pay the patient” practices, with language stating that municipalities would be authorized to set a fair rate for ambulance services, preventing insurance companies from shifting costs to local property taxpayers through below-cost reimbursements.  The Senate budget would have given ultimate rate-setting authority to the Secretary of Health and Human Services, which the MMA opposed because removal of local control over ambulance rates would have created large budget problems for cities and towns.  The Governor’s budget did not address the issue.  Because this issue has not been resolved, the MMA will continue its efforts to ban “pay the patient” practices by insurance companies.

Please Call Your Legislators Today and Thank Them for a Strong Fiscal 2016 State Budget that Makes Progress on Key Municipal and Education Aid Priorities


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