Monthly Archives: November 2014

Gov. Patrick has proposed cuts to the current year spending in order to balance the state budget, which include about a 2% reduction in state aid to municipalities.  This is the Massachusetts Municipal Association’s response  –

Wednesday, November 19, 2014

GOV. PATRICK IMPOSES SWEEPING MID-YEAR BUDGET CUTS, TARGETS LOCAL AID AND SCHOOL ACCOUNTS

• Gov. Says State Must Close $329M Fiscal 2015 Budget Gap
  • Gov. Uses His Budget Powers to Slash Education & Municipal Accounts by $40M
  • Gov. Files Bill With Legislature to Cut Unrestricted Local Aid by $25.5M

Two days after the November 4^th state election, in the waning days of his tenure, Governor Patrick disclosed a $329 million deficit in the state’s fiscal 2015 budget, a shortfall caused mostly by state budget administrative and management issues, and not by declining tax revenues. Earlier today, the Governor released his plan to close the budget gap by slashing state and local funding by $65 million mid-year. He announced that he is using his budget powers to implement approximately $200 million in immediate cuts to state-funded programs in executive agencies under his control, including $40.3 million in cuts to important municipal and school reimbursement and grant programs.

In addition to the $40.3 million in immediate cuts, the Governor has proposed legislation to slash $25.5 million from Unrestricted General Government Aid, a measure which must be approved by the Legislature to take effect. This would translate into a 2.7 percent cut in UGGA funding for every city and town. His plan relies exclusively on budget cuts and does not draw on the state’s $1.2 billion rainy day fund.

While the Administration has said they are not proposing any cuts to Chapter 70 school aid, the reality is clear: the unilateral budget cuts will impose serious mid-year reductions in many important K-12 education accounts, and will be harmful to schools. In addition, his proposal to cut Unrestricted General Government Aid (UGGA) would further hit local schools, because cities and towns use their municipal aid to fund local education budgets.

Click here to link to the A&F website that contains the list of emergency budget cuts: http://www.mass.gov/anf/budget-taxes-and-procurement/state-budget/fy15-budget-info/fy15-budget-cut-information/

The MMA has issued a statement opposing the Governor’s cuts to cities, towns and school districts, and is calling on the Legislature to reject his proposal to slash UGGA funding.

A copy of the MMA’s statement can be downloaded by clicking here.

A copy of the MMA’s letter to the Legislature can be downloaded by clicking here.

GOVERNOR IMPLEMENTS $40.3 MILLION IN IMMEDIATE MID-YEAR CUTS TO KEY SCHOOL AND MUNICIPAL PROGRAMS

Using his statutory authority to reduce executive branch spending, the Governor has unilaterally reduced funding for state budget accounts under his control by approximately $200 million, including $40.3 million in painful mid-year cuts to accounts that provide direct funding to cities, towns and school districts. The MMA has identified the local government accounts impacted the most, listed in order of size:

• $18.7 million from Regional School Transportation (a 27% cut)
  • $7.1 million from the Regionalization and Efficiencies Reserve (a 49% cut)
  • $3.86 million from Special Education Reimbursements (a 15% cut)
  • $2.88 million from the Chapter 70 “Pothole” account (an 85% cut)
  • $2.24 million from Vocational School Transportation (a 100% cut)
  • $1.3 million from Public School Military Mitigation Grants (a 100% cut)
  • $1.2 million from Charter School Reimbursements (a 1.5% cut)
  • $1.1 million from Sewer Rate Relief (a 100% cut)
  • $1 million from Extended Learning Time Grants (a 6.8% cut)
  • $359 thousand from Kindergarten Expansion Grants (a 1.5% cut)
  • $287 thousand from METCO (a 1.5% cut)
  • $283 thousand from Library Aid (a 1.5% cut)

Every city, town and school district will be hit with one or more of these cuts. In most cases, the cuts will feel much deeper because the reductions are being implemented five months into the fiscal year. For example, with only seven months left in fiscal year 2015, a 10% cut in an account will translate into a 17% cut from now to the end of the year, and a 50% cut in a program will translate into an 85% reduction in remaining reimbursements due to cities and towns.

PLEASE ASK YOUR LEGISLATORS TO OPPOSE THE GOVERNOR’S LEGISLATION TO IMPOSE A $25.5 MILLION MID-YEAR CUT TO UNRESTRICTED GENERAL GOVERNMENT AID

In a move that surprised the Legislature and local officials, the Governor has also filed legislation requesting $25.5 million or 2.7% cut in Unrestricted General Government Aid (UGGA) for every city and town. The MMA will strongly oppose any cut to unrestricted municipal aid, because that would destabilize local budgets in the middle of the fiscal year, and force reductions in community services. Unrestricted municipal aid is already $400 million below original fiscal 2009 levels, and any additional cuts will be painful for cities and towns across the state.

Please call your legislators today and explain that cities and towns should not be hit with mid-year cuts, especially since the shortfall is in no way related to local government or the overall performance of the economy, and is primarily due to state spending decisions and the administration of state government. At this point in the year, cuts in municipal or school funding accounts would be extremely painful at the local level.

PLEASE CALL YOUR REPRESENTATIVES AND SENATORS TODAY AND ASK THEM TO OPPOSE THE GOVERNOR’S PROPOSED $25.5 MILLION MID-YEAR CUT TO UNRESTRICTED MUNICIPAL AID

This from the Massachusetts Municipal Association –

Thursday, November 13, 2014

GOVERNOR’S OFFICE REVEALS $325M STATE BUDGET DEFICIT IN FY 2015

• Gov. Patrick Plans to Announce $325M in Budget Cuts Next Week
• Municipal and Education Accounts Could be Targeted for Mid-Year Cuts

$325M State Budget Shortfall Announced – Last week, Gov. Patrick’s Secretary for Administration & Finance announced that the state is facing a $325 million shortfall in its fiscal 2015 budget, and said that the Administration would be unveiling plans to close the budget gap at some point during the week of November 17th.  He said that the plan would not draw from the state’s $1.2 billion stabilization fund, but instead would rely exclusively on mid-year spending cuts.

          The MMA has Called on the Patrick Administration to Avoid any Mid-Year Cuts Targeted at Cities and Towns – In a face-to-face meeting with A&F Secretary Glen Shor and top Administration officials at the November 12 meeting of the Local Government Advisory Commission meeting, the MMA and local leaders presented a strong case that cities and towns should not be hit with mid-year cuts, especially since the shortfall is in no way related to local government or the overall performance of the economy, and is primarily due to state spending decisions and the administration of state government.  At this point in the year, cuts in municipal or school funding accounts would be extremely painful at the local level.  However, Administration officials responded that they appreciated the “input,” but did not take local funding off the table.

State Budget Gap Caused by Shortfall in “Non-Tax” Revenues, Spending in the New Economic Development Act, and a Cut in the Income Tax Rate –A&F Secretary Glen Shor stated that the $325 million shortfall is caused by several factors.  First, although state tax revenues are still expected to meet expected levels, the state income tax rate will be automatically reduced from 5.2 percent to 5.15 percent, effective on January 1, a cut that will be triggered by existing law.  This will reduce the state’s fiscal 2015 tax revenues by $70 million.  Second, lawmakers and the Governor approved an $80 million economic development bill late last summer, and state revenues are not growing fast enough to offset the cost.  Finally, and most importantly, the Patrick Administration is now reporting a $175 million shortfall in non-tax revenues and agency fees.  While the Administration is providing no specific explanation of the non-tax shortfall, independent budget analysts expect that a significant cause is the breakdown in the state’s health insurance exchange website, which forced state officials to enroll thousands of residents in temporary Medicaid plans, for which the state will not receive full federal reimbursement.

          Governor Can Impose Mid-Year Cuts on Spending in State Agencies Under His Control, and Ask Legislature for Authority to Cut Local Aid, the Judiciary and Others – Facing a $325 million budget shortfall, the Governor has the authority to unilaterally cut spending in executive branch agencies under his control.  In addition, the Governor can ask the Legislature to grant him expanded budget-cutting authority over other accounts outside of the executive branch, such as Unrestricted General Government Aid, Chapter 70 school aid, constitutional officers, the judiciary and independent agencies, a step he has taken in the past.  With the Legislature in informal session and only able to pass items with unanimous consent, it is unlikely that legislators would grant Gov. Patrick expanded budget reduction powers targeting local aid, but if that is one of the Governor’s proposals, local officials will need to contact their Representatives and Senators immediately.

          Important Municipal and School Aid Accounts May be Targeted for Mid-Year Cuts – The last time Gov. Patrick faced a mid-year budget deficit was in December 2013, when state was projecting a $540 million deficit.  The Governor used his budget powers to impose $28.75 million in mid-year cuts to important municipal and school aid accounts, which left cities and towns reeling from unexpected revenue losses.  In 2013, the mid-year reductions included a 5% cut to the Special Education Circuit Breaker program, a 47% cut to the McKinney-Vento homeless student transportation account, a 70% cut to the Chapter 70 pothole account, a 3% cut in Veterans’ Benefits reimbursements, a 1% cut in regional school transportation funding, a 1.4% cut to charter school reimbursements, and other important accounts.  In addition, the Governor asked the Legislature to cut $9 million from Unrestricted General Government Aid, a request that lawmakers rejected.

          PLEASE ASK YOUR LEGISLATORS TO OPPOSE ANY PROPOSAL TO IMPOSE MID-YEAR CUTS TO UNRESTRICTED GENERAL GOVERNMENT AID OR CHAPTER 70 EDUCATION AID – The MMA will strongly oppose any cut to unrestricted municipal aid or Chapter 70, because that would destabilize local budgets in the middle of the fiscal year, and force reductions in community services.  Unrestricted municipal aid has already nearly $400 million below original fiscal 2009 levels, and any additional cuts would be painful for cities and towns across the state.  In addition, please tell your legislators that you are very worried about potential cuts to important municipal and school accounts in the state budget, including the Special Education Circuit Breaker, McKinney-Vento funding, charter school and regional school transportation accounts, and other programs.

Please Call Your Representatives and Senators Today and Ask Them to Oppose Any Proposals to Cut Municipal or Education Aid, and Share Your Concerns About the Impact of Mid-Year Cuts to Local Programs and Services