This from the Massachusetts Municipal Association this afternoon on the state budget issued today by the House Ways & Means Committee –
Wednesday April 9, 2014
HOUSE W&M BUDGET TRIMS STATE SPENDING AND INCLUDES TARGETED LOCAL AID INCREASES
HW&M Budget Funds the Promised Increase of $25M for UGGA and $99.5M for Chapter 70, as Passed in the Local Aid Resolution
HW&M Budget Adds $5M to Special Education Circuit Breaker, with the Intention of Fully Funding the Program
HW&M Budget Adds $5M to Charter School Reimbursements, which is Progress But Still Falls Short of Full Funding
HW&M Budget Adds $2M to Regional Sch. Trans. and $920K for Libraries
HW&M Budget Level Funds McKinney-Vento and PILOT Accounts
Outside Section 32 Would Extend Freeze on Retiree Health Insurance Contributions for 2 More Years for Communities that have Implemented Muni Health Reform Law
As expected, the House Ways and Means Committee today released its version of the fiscal 2015 state budget, a $36 billion budget plan with a bottom line that is $191 million lower than the Governor’s recommended budget, yet provides more funding for targeted municipal and school aid programs.
The House plan would spend less than the amount recommended by the Governor in January, avoid the tax increases proposed in the Governor’s budget, draw less from the rainy day fund, and increase municipal and school aid accounts used to balance local budgets by nearly $40 million above the amount recommended in the Governor’s budget.
Cities and towns are facing serious fiscal challenges, and the MMA will be working hard to build on the House Ways and Means budget when the full membership begins debate on Monday, April 28. In the meantime, House members will have until 5:00 p.m. on Friday, April 11 to file budget amendments.
Please contact your Representatives and tell them how this budget impacts your community.
THE FOLLOWING IS AN INITIAL ANALYSIS OF THE KEY LOCAL AID AND POLICY ITEMS INCLUDED IN THE FISCAL 2015 STATE BUDGET PROPOSED BY THE HOUSE WAYS AND MEANS COMMITTEE:
$25 MILLION INCREASE IN UNRESTRICTED GENERAL GOVERNMENT AID
The HW&M budget plan funds the $25.5 million increase in Unrestricted General Government Aid that was announced in the local aid resolution passed by the Legislature last month, increasing UGGA funding from $920.23 million to $945.75 million. The Governor’s budget would have level-funded this vital source of local aid.
CHAPTER 70 INCREASE REMAINS AT $99.5 MILLION
The House leadership’s proposed budget also reflects the $99.5 million increase in Chapter 70 funding proposed by the Governor and passed in the Legislature’s local aid resolution, which would bring total Chapter 70 aid up to $4.4 billion. The plan would bring all cities and towns up to foundation levels, phase in the target share funding provisions, and provide all communities with a minimum increase of $25 per student. Most cities, towns and regional school districts are slated to only receive the minimum aid increase of $25 per student, an amount that is inadequate to maintain existing program levels. Although the MMA will continue to call on legislators to provide a higher minimum aid increase when the full budget is debated later this month, amendments to increase Chapter 70 funding will not be allowed under a budget order passed by the House this week, with the majority of the House deciding that the debate on Chapter 70 funding took place during the adoption of the local aid resolution last month.
HW&M BUDGET ADDS $5 MILLION TO SPED CIRCUIT BREAKER, INTENDING TO FULLY FUND THE PROGRAM
The House Ways and Means budget would fund the Special Education Circuit Breaker program at $257.5 million, a $5 million increase intended to fully fund this essential reimbursement program. The Governor had proposed level-funding, which would have generated a shortfall due to rising costs, and the House’s commitment to increased funding is very much appreciated.
CHARTER SCHOOL REIMBURSEMENTS RECEIVE $5M BOOST, STILL 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 shortfall of $29 million in fiscal 2015. The HW&M budget would increase reimbursements by $5 million, to a total of $80 million. This represents progress, but the program would still be underfunded by $24 million. 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.
$2M MORE FOR REGIONAL SCHOOL TRANSPORTATION REIMBURSEMENTS
The Governor’s budget would have level-funded regional school transportation reimbursements at $51.5 million, and the HW&M budget would add $2 million for fiscal 2015. This account remains underfunded, yet the $2 million increase will help communities deal with rising costs due to fuel and inflation.
$500K RESTORED TO PAYMENTS-IN-LIEU-OF-TAXES (PILOT)
The Governor’s budget would have cut $500,000 from PILOT payments, reducing the program to $26.27 million. The proposed House budget would restore this funding, and keep the account at the fiscal 2014 level of $26.77 million.
McKINNEY-VENTO REIMBURSEMENTS UNDERFUNDED
The HW&M and Governor’s budgets would level-fund reimbursements for the transportation of homeless students at $7.4 million, which is at least $7 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. Level-funding the program would continue to impose a significant burden on those cities and towns that are providing transportation services to homeless children who have been placed in their communities by the state.
SHANNON ANTI-GANG GRANTS WOULD SEE REDUCTION
The HW&M budget would fund Shannon Anti-Gang grants at $4 million in fiscal 2015. Current funding is $7 million this year.
OUTSIDE SECTION 32 WOULD EXTEND FREEZE ON RETIREE HEALTH INSURANCE CONTRIBUTIONS FOR 2 MORE YEARS FOR COMMUNITIES THAT HAVE IMPLEMENTED THE 2011 MUNICIPAL HEALTH INSURANCE REFORM LAW
The MMA will be strongly opposing Outside Section 32 of the proposed House budget, which would extend a 3-year freeze on changing retiree health insurance contribution percentages by an additional 2 years. Under existing law, any community that used sections 22 or 23 of Chapter 32B (the new municipal health insurance reform law) to implement plan design changes or join the GIC is prohibited from changing retiree health insurance contribution percentages until July 1, 2014. This outside section would extend that freeze for 2 more years, until July 1, 2016 for any community that has adopted or is planning on adopting provisions of the 2011 municipal health insurance reform law. This proposed change would reverse planned contribution changes that have already been adopted by some communities, and would delay the ability to take action on retiree contribution percentages in many others.
THE HOUSE WILL BEGIN DEBATE ON THE BUDGET ON MONDAY, APRIL 28. PLEASE CALL YOUR REPRESENTATIVES TODAY AND URGE THEM TO BUILD ON THE LOCAL AID INCREASES IN THE PROPOSED HOUSE BUDGET.
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