This alert this afternoon from the Massachusetts Municipal Association –

_{^{LEGISLATURE TO APPROVE $25M INCREASE FOR UGGA, BUT WOULD SET FISCAL 2015 CHAPTER 70 AT THE SAME LEVEL OFFERED IN THE GOVERNOR’S BUDGET}}

HOUSE VOTE EXPECTED TODAY (WED., MARCH 12) AND SENATE VOTE PLANNED FOR THURSDAY, MARCH 13

Legislative leaders in the House and Senate have agreed on a local aid resolution to set fiscal 2015 appropriation amounts for Unrestricted General Government Aid (UGGA) and Chapter 70 school aid in advance of the full budget debate. House leaders unveiled the local aid resolution at a noon caucus today (Wednesday, March 12), with plans to pass it in the afternoon. The Senate is expected to vote on the resolution tomorrow (Thursday, March 13).

HOUSE & SENATE LEADERS EMBRACE $25 MILLION MORE FOR UNRESTRICTED MUNICIPAL AID – A 2.7% INCREASE

Based on the resolution offered by the House and Senate Ways & Means Committees, and the Speaker and Senate President, Unrestricted General Government Aid will increase by $25 million in the fiscal 2015 budget, a 2.7 percent increase for every city and town, bringing that account up to $945 million. This is good news for cities and towns, because the budget filed by the Governor would have level-funded municipal aid, and now local officials can count on an increase in unrestricted aid for next year.

Click HERE to see the Fiscal 2015 Unrestricted General Government Aid amount for your community in the House-Senate Local Aid Resolution, as provided to the MMA by the House Clerk’s Office

HOUSE & SENATE LEADERS WOULD SET CHAPTER 70 AT SAME LEVELS FILED IN THE GOVERNOR’S BUDGET

However, the resolution would fund Chapter 70 education aid at the same amount filed in the Governor’s original fiscal 2015 state budget, a $99.5 million increase above fiscal 2014 levels to bring Chapter 70 up to $4.5 billion. The plan would bring all cities and towns up to foundation levels, phase in the target share funding, and provide all communities with a minimum increase of $25 per student. Most cities, towns and regional school districts would only receive the minimum aid increase of $25 per student. The MMA will be asking legislators to provide a higher minimum aid increase when the full budget is debated later this spring, as the Chapter 70 amounts are not adequate to support current school programs, although the resolution being adopted by the Legislature would make it difficult for lawmakers to offer amendments to increase Chapter 70 from the floor of the House or Senate during budget debate.

FUNDING LEVELS FOR MANY OTHER ESSENTIAL MUNICIPAL AND SCHOOL AID ACCOUNTS WILL BE CONSIDERED LATER THIS SPRING WHEN THE FULL FISCAL 2015 STATE BUDGET IS DEBATED

The local aid resolution does not include the remaining municipal and school aid reimbursement accounts, including the Special Education Circuit-Breaker, Charter School Reimbursements, Regional School Transportation, McKinney-Vento transportation of homeless students, Payments-in-Lieu-of-Taxes (PILOT), and Shannon Anti-Gang Grants. Funding for all of these essential programs will be debated during the traditional budget process, and the MMA will be pushing hard for significant increases and full funding for all of these key accounts.

PASSAGE OF A LOCAL AID RESOLUTION CLARIFIES LOCAL BUDGET PLANNING

Typically, the House debates the budget in April and the Senate passes its version in May, and both branches then reach final agreement on the entire budget in late June. Because this timing creates an extraordinary amount of uncertainty for cities and towns as local officials pass their own budgets, municipal leaders and the MMA have called on the Legislature to take early action to set minimum municipal aid and Chapter 70 levels in time to allow communities to make informed budget decisions. Passage of a local aid resolution makes it easier for communities to plan now instead of waiting until late summer.

PLEASE CALL YOUR REPRESENTATIVES AND SENATORS TODAY

The MMA urges all local leaders to contact their Representatives and Senators and tell them what the local aid resolution would mean for each city and town. Please discuss the need to provide a higher Chapter 70 minimum aid increase when the full budget is debated, and the importance of full funding for all of the other essential municipal and school accounts when the budget advances in each chamber, including Charter School Reimbursements, the Special Education Circuit-Breaker, Regional School Transportation, McKinney-Vento Reimbursements, PILOT, Shannon Anti-Gang Grants, and more.

Email from Mike Sullivan this afternoon –

Just received this from Denise Garlick. It’s both a house and senate resolution so it should have no problem being approved. The total increase for us is $99,255. Mike

From: “Garlick, Denise – Rep (HOU)”

Sent: Wednesday, March 12, 2014 2:21 PM
To: “msullivan

Subject: FY15 Local Aid Resolution

Governor’s Cherry Sheet proposed numbers for the Town of Medfield –

This article from the Massachusetts Department of Revenue’s Division of Local Services’ newsletter.  Medfield opted to not adopt the Community Preservation Act, and as a result we leave the state matching money on the table every year.    –

State Releases FY2014 Matching Funds for Community Preservation
Lisa Juszkiewicz – Director of the Municipal Databank

On November 15^th, the Division of Local Services (DLS) processed the annual distribution of state funds to the 148 communities that adopted the Community Preservation Act (CPA) statute and collected the local surcharges during FY2013. The state match totaled $54.9 million and was funded through the traditional Registry of Deeds revenue collections and a one-time infusion of $25 million in state surplus revenue. The combined revenue sources allowed for a first round match of 52.22 percent. This is the first time the first round state match has been over 50 percent since FY2010. Without the additional revenue added to the trust fund this year, cities and towns in the program would have received a first round match of less than 31 percent and total state funding of $32.7 million.

According to the Community Preservation Act, there are three potential rounds for distributing the state match. 

• Round 1 distributes 80% of CPA trust fund balance to all CPA participants
• Round 2 equity distribution (only for those with 3% surcharge)
• Round 3 surplus distribution (only for those with 3% surcharge)

When there are sufficient available funds in the trust fund to match the net surcharge committed, the CPA statute requires the Division to provide a 100 percent match. For the first six years of the program, the revenue stream into the trust fund was enough to provide for a 100 percent match. In those years when the trust fund balance is not sufficient to provide for a 100 percent match, the Commissioner of Revenue has discretion as to whether all of the three rounds will be used. In FY2009, the first year that there was not enough money to provide a 100 percent match, the Commissioner chose to distribute matching funds using only the first and second rounds. By holding back the Round 3 surplus distribution, we were able to reserve a little additional funding for FY2010, decreasing the rapid reduction in the state match slightly. Since FY2010, DLS has calculated the state match using all three rounds.

In FY2013, 148 communities assessed the surcharge on property tax bills making them eligible for the state match in FY2014. Of the 148 communities eligible, 75 have adopted the CPA at 3 percent making them eligible for all three rounds. There are a number of communities that have adopted the surcharge at three percent and continue to receive a 100 percent state match. Of the 75 communities that adopted the maximum three percent surcharge, 23 are receiving a 100 percent state match. These communities collectively account for only $3.5 million of the total $92.5 million committed statewide by all communities that have adopted the surcharge. In addition to the 23 communities with a 100 percent match, there are five communities with a state match over 90 percent and another five communities receiving between 80 and 89 percent state matches.

The table below details the annual state match, the number of communities participating and the first round match for each year of the program:

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Funding for the state Community Preservation trust fund comes from fees imposed at the Registry of Deeds or in Land Court for recording various documents. These fees are deposited into the trust fund monthly and are used to calculate the state match for the local surcharge imposed on property tax bills. In the last several years, the transaction fees have decreased as a result of the downturn in the real estate market. The decrease in registry revenues, combined with the increased number of communities participating, has resulted in a significant drop in the percentage of the state match since FY2008, the last year the Commonwealth matched 100 percent of the net surcharge committed.

In an effort to restore funding to the CPA program, language contained in the FY2014 state budget (Section 145 of Chapter 38 of the Acts of 2013) provided for supplemental funding of up to $25 million. This funding was to come from the Commonwealth’s general fund surplus, provided that the state surplus was sufficient to accommodate this transfer. The State Comptroller’s office reported in early November that there were sufficient revenues in the state’s FY2013 surplus to allow the full $25 million to be transferred to the Community Preservation trust.

As the chart below illustrates, there has been a significant drop in the amount of the state matching funds in comparison to the amount of the surcharge cities and towns have committed. Without the additional revenue added to the trust fund this year, cities and towns in the program would have received less than a 31 percent state match. This slight increase reflects an uptick in the amount of fees collected at the Registry of Deeds and Land Court, which is consistent with reports of increased property sales.  Another factor is that with the distribution date changed from October 15^th to November 15^th, there was an additional month of collections included in the state fund for distribution month.

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As we have done in the past the Municipal Databank has posted the current state match on the Division’s website. An Excel file with the details by round can be downloaded from the following link:
http://www.mass.gov/dor/docs/dls/mdmstuf/cpa/fy14cpapayment.xls.

This file also includes the data used to create the tables and charts appearing above, as well as the historical state matching funds by community since the beginning of the program.

Email from Mike Sullivan, forwarding notification of the state approval of our tax rate set by the Board of Selectmen last night, and certified by each of us by means of electronic signatures at the DOR website after our meeting  –

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fy14 tax rate of $16.12 was approved this morning. I guess your electronic signatures did the trick. Happy Thanksgiving. Mike

Sent: Wednesday, November 27, 2013 10:43 AM
Subject: Tax Rate Approval Notification

Massachusetts Department of Revenue Division of Local Services
Amy Pitter, Commissioner
Robert G. Nunes, Deputy Commissioner & Director of Municipal Affairs

Medfield Assessors                Date: Wednesday, November 27, 2013

Dear Assessors:

The Fiscal Year 2014 tax rate has been certified by the Bureau of Accounts for Medfield.

The four pages of the tax rate recapitulation form and the levy limit worksheet (not
applicable to districts) are available on the Division of Local Services website:

Tax Rate Recapitulation Form

Levy Limit Worksheet

Page one of the tax rate recapitulation form includes the Director of Accounts’ electronic
signature and the date of approval. This letter is your notification of approval pursuant to
Massachusetts General Laws Chapter 59, section 23. Please forward copies of this notification
to other officials as you deem appropriate.

We wish to thank you for your cooperation and assistance in the tax rate setting process.

Sincerely,
Gerard D. Perry
Director of Accounts