Category Archives: Budgets

This alert this morning from the Massachusetts Municipal Association –

July 31, 2013

GOVERNOR RELEASES $50 MILLION MORE FOR CHAPTER 90, WITHHOLDING $100 MILLION FROM CITIES AND TOWNS

Yesterday evening, the Patrick Administration announced via Twitter that it would be releasing an additional $50 million in Chapter 90 funding for local roads in fiscal 2014, bringing the total released so far to $200 million, in spite of the fact that the Legislature has enacted a new transportation finance law that will raise more than enough funds to provide the full $300 million for Chapter 90 that is due to cities and towns.  The Administration is now level-funding the Chapter 90 authorization at $200 million, even though the Legislature voted unanimously to increase the program to $300 million, and has enacted a transportation finance law that provides the funding to support the full authorization.

The MMA has called on the Governor to release the full $300 million authorization, saying that “The Massachusetts Municipal Association respectfully and urgently requests that you direct your Administration to release the entire $300 million in local Chapter 90 funds due to cities and towns… To put it plainly, we strongly disagree with the decision to level-fund Chapter 90 distributions at $200 million, as this would unfairly deny cities and towns access to the new tax revenues that will be available for transportation maintenance and improvements.  Communities need a true partnership with the state that shares tax dollars with local residents to support local road and infrastructure projects.  Simply put, withholding Chapter 90 funds from municipalities will shortchange cities and towns, stall important local road maintenance and repair initiatives, and undermine the local-state partnership that is necessary to move the Commonwealth forward.”

PLEASE CLICK HERE TO DOWNLOAD A COPY OF THE MMA’S JULY 31th LETTER TO THE GOVERNOR CALLING FOR THE RELEASE OF THE FULL $300 MILLION FOR CHAPTER 90

PLEASE CONTACT THE GOVERNOR’S OFFICE (617-725-4000) AND YOUR REPRESENTATIVES AND SENATORS AS SOON AS POSSIBLE AND ASK THE GOVERNOR TO COMMIT TO RELEASE THE FULL $300 MILLION AUTHORIZATION.  SHORTCHANGING CHAPTER 90 WILL DELAY IMPORTANT LOCAL PROJECTS, SHORTEN THE CONSTRUCTION SEASON, AND INCREASE COSTS FOR CITIES AND TOWNS.

WHEN YOU SPEAK WITH THE GOVERNOR’S OFFICE AND YOUR LEGISLATORS, PLEASE MAKE THE FOLLOWING POINTS:

• Cities and towns are responsible for maintaining, repairing and rebuilding nearly 90 percent of the roadways in Massachusetts – adequate funding for Chapter 90 is necessary to ensure that these local transportation needs are met.

• Cities and towns use their Chapter 90 funds to provide safe roads that are essential for economic growth, commerce and everyday living – unfortunately, the Administration’s announcement would level fund Chapter 90 at $200 million instead of funding the $100 million increase that the Legislature and local officials know is necessary.

• Chapter 90 improves the quality and safety of our roads – full funding is needed to bring local roads up to a state of good repair, the standard for ensuring well-maintained roads in good condition.

• Chapter 90 sends new tax dollars back home where they belong – citizens and businesses will be paying higher taxes to fund transportation improvements, and Chapter 90 is the one program that will provide taxpayers in every single community with a share of their investment.

• Chapter 90 is affordable – the Legislature has enacted a comprehensive transportation revenue package that clearly provides enough new tax revenue to support $300 million for Chapter 90, and it is the Legislature’s clear intent for this to happen.

• Chapter 90 ensures regional equity – the Chapter 90 program is the most effective and efficient way to ensure regional equity and access to increased transportation tax revenues because cities and towns receive their funds through a tried-and-true formula that shares revenues in a fair way in every corner of the Commonwealth.

• Chapter 90 protects communities and local taxpayers –under Proposition 2½, cities and towns can’t increase local funding to repair roads unless they cut other important services such as public safety and local schools, or pass a tax override, which increases local reliance on the already overburdened property tax.

• Chapter 90 strengthens the Massachusetts economy – all experts and stakeholders agree that investing in transportation is essential for our state’s economic growth and competitiveness, and Chapter 90 builds economic progress in every community, which is good for every resident, taxpayer, and business owner in the state.

• Chapter 90 creates construction jobs now – cities and towns face such a backlog of need that every new dollar for Chapter 90 will immediately result in visible and necessary repair projects on local roads all across Massachusetts, creating high-quality construction jobs for the middle class.

• Chapter 90 saves taxpayers money ­– investing more in Chapter 90 funding to improve the quality of local roads will actually save taxpayers millions of dollars a year because, according to the U.S. Department of Transportation, once a local road is in a state of good repair, every dollar invested for maintenance will save 6 to 10 dollars in avoided repair costs that become necessary to rebuild the road when it fails due to a lack of maintenance.

• PLEASE ASK THE GOVERNOR to commit to releasing all $300 million for Chapter 90 now.  Chapter 90 is a necessary, affordable and money-saving program to improve the quality and safety of our roads, build our economy, create jobs, protect local taxpayers, ensure equity across the state, and return new tax dollars to every single community.

PLEASE CONTACT GOV. PATRICK’S OFFICE TODAY AND ASK HIM TO COMMIT TO ALL $300 MILLION FOR CHAPTER 90, NOT JUST THE $200 MILLION HE HAS RELEASED SO FAR

AND

PLEASE ASK YOUR LEGISLATORS TO CONTACT THE GOVERNOR AND CALL FOR THE RELEASE OF $300 MILLION FOR CHAPTER 90

Thank You Very Much.

DOR issued the final FY2014 Cherry Sheets today –

This alert just now from the Massachusetts Municipal Association –

July 24, 2013

House & Senate Override Gov’s Local Aid Veto

Lawmakers Restore $177 Million by Unanimous Vote

Moments ago, the members of the House of Representatives and state Senate voted unanimously to override the Governor’s veto of $177 million in unrestricted municipal aid, restoring local aid to the funding level established by the Legislature in the fiscal 2014 state budget approved earlier this month.

Thanks to the Legislature’s vote, cities and towns will receive $920 million in Unrestricted General Government Aid, a $21 million increase over fiscal 2013.   The vote by lawmakers finalizes the fiscal 2014 Cherry Sheets and ends the uncertainty over local aid levels that was triggered when the Governor issued his local aid veto.

On July 12, the Governor vetoed $177 million from the local aid distribution, which would have slashed aid to every city and town by 19 percent.  Legislative leaders immediately announced that they would protect localities and work to override the veto.  All of the other local aid accounts had been untouched by the Governor when he signed the budget, securing a $130 million increase for Chapter 70, full funding of the Special Education Circuit Breaker program, as well as increases for regional and vocational school transportation accounts.

The vote to restore local aid occurred this afternoon, moments after the Legislature overrode the Governor’s veto of the transportation finance package by wide margins, ending months of debate and enacting $500 million in new taxes as part of a comprehensive $800 million framework to invest in transportation to rebuild and maintain our state’s road and transit systems.

The MMA thanks the members of the House and Senate for their strong support for protecting and restoring local aid, and voting to finalize fiscal 2014 Cherry Sheets.  The leaders and members of the Legislature have worked hard to deliver a strong budget for cities and towns.

The Commonwealth of Massachusetts’ Dept. of Revenue, Division of Local Services publishes all sorts of advice for towns on how to do things, and this was an article from its latest newsletter, on the amounts of reserves a town should have.  DLS says reserves should be 5-7%, and I recall Mike Sullivan saying the rating agencies (such as Moody’s) saying they wanted us to have 10%.  Our free cash has been about 2-3%, and I do not know what stabilization funds they would include.

Ask DLS
City and Town Editorial Board

Is there a best practice target a community should have for the amount in a stabilization fund?

At DLS, we have historically recommended that cities and towns set aside a combined free cash and stabilization fund balance of between five to seven percent of the total annual budget. However, we recognize that current economic circumstances, financial management constraints and political obstacles can make building and retaining reserve levels within this range unrealistic.

Even so, municipal rating agencies in recent years have advocated for reserve levels closer to ten percent in order to provide adequate resources during times of fiscal stress and to generally mitigate risks. Using the state-wide average as a benchmark, communities across Massachusetts have averaged almost six percent in combined reserves over the last ten years, and just over 6.7 percent in FY2012.

Dollar amounts also come into play when a municipality commits to increasing its reserves.  Reaching and sustaining a five to seven percent reserve balance may involve setting aside additional millions of dollars. This may not be a realistic goal. Decision makers must then carefully consider whether the potential need for reserves can be satisfied by a healthy dollar balance, which may not necessarily meet percentage targets.

In any case, we encourage cities and town to adopt formal policies that define adequate reserve levels based on a community’s particular needs and circumstances. For more information on stabilization funds, free cash and other municipal finance topics, visit our best practices webpage. Also, many municipalities post reserve policies that can provide useful guidance.

This from the Massachusetts Municipal Association –

July 12, 2013

GOV VETOES $177M FROM LOCAL AID

Gov. Patrick Signs FY14 State Budget, But Slashes $177M from Unrestricted General Government Aid (UGGA), Citing Lack of Revenues From Trans. Tax Package

Speaker DeLeo Immediately Pledges that Lawmakers “Will Protect the Cities and Towns of Massachusetts”

Please Contact Your Legislators Immediately and Ask the House and Senate to Override the Local Aid Veto and Restore the $177 Million for Cities and Towns

Governor Patrick today signed the state’s $34 billion fiscal 2014 budget into law, but imposed a massive $177 million veto in Unrestricted General Government Aid (UGGA), as well as $240 million in transportation-related vetoes.  The Governor said he made these cuts because the budget on his desk relies on approximately $450 million in new tax revenue from the transportation finance package, and those funds are not yet guaranteed.

The Governor’s veto would slash unrestricted municipal aid down to 1986 levels and create widespread fiscal distress in nearly every city and town.  The veto would reduce direct local aid from the $920 million passed by the Legislature down to $743 million, a 19 percent cut that would also result in the diversion of $110 million in local Lottery funds away from cities and towns, and use those dollars to balance the state budget instead of funding local services, as originally intended in state law.  If this veto is allowed to stand, communities will face an unexpected, undeserved and devastating fiscal crisis.

In general, other local aid accounts were approved as passed by the Legislature, including a $130 million increase in funding for Chapter 70, $10 million more for the Special Education Circuit Breaker, and a $6 million increase for regional school transportation.

The MMA has issued a statement opposing the Governor’s local aid veto and calling on the Legislature to immediately override the $177 million cut.  Click here to read a copy of the MMA’s statement.

Before the ink was dry on the Governor’s veto message, House Speaker Robert DeLeo issued a statement pledging to restore the local aid cut.  The Speaker said “the House of Representatives will protect the cities and towns of Massachusetts.  We passed a budget that addresses key transportation needs, provides funding to our municipalities and makes key investments in higher education and community colleges, and we will again vote next week to maintain that commitment.”

All observers expect that the transportation tax package will eventually become law, with or without the Governor’s signature, and it is also expected that the Legislature will vote to override the $177 million local aid veto.  However, the Governor’s veto has created significant uncertainty and budget disruption.

Two weeks ago, the Governor returned the transportation tax bill to the Legislature, asserting that $135 million in MassPike toll revenues might not be available in 2017 (an issue that was not addressed or raised in any of the plans originally offered by the House, Senate or Governor).  The Governor attached an amendment to automatically increase the gas tax by $135 million a year if the Weston-to-Springfield tolls come down in four years, and sent the bill back to the Legislature for a vote, even though legislative leaders announced that they would oppose the further tax increases in the amendment.  By returning the tax bill to the Legislature, the $450 million in new revenue was delayed until after the deadline for signing the state budget, and the Governor chose to veto over $400 million from the state budget to “bring it into balance.”

Legislative leaders are now scheduling formal sessions to override the Governor’s tax amendment and expected veto of the final tax bill, as well as voting to override any related budget vetoes, including the local aid veto.

THE NEXT TWO WEEKS ARE CRITICAL:

The Legislature is already planning on debating and likely rejecting the Governor’s tax amendment on Wednesday (July 17) and Thursday (July 18) of next week.  After that, the Governor will have ten days to decide whether to sign or veto the final tax package.  The Legislature is expected to override the tax package veto and then turn to consider overriding any related budget vetoes.

After the new tax package becomes law (with or without the Governor’s amendment or signature), the Legislature will then move to vote on whether to override the local aid veto.  Depending on several factors, this could occur during the final days of July, according to the latest schedule of formal sessions announced by legislative leaders.

PLEASE CONTACT YOUR REPRESENTATIVES AND SENATORS AND CALL ON THEM TO IMMEDIATELY OVERRIDE THE $177 MILLION LOCAL AID VETO. 

Please tell your legislators that cities and towns cannot afford any cuts to local aid:

• Communities have set their budgets based on the local aid levels in the Legislature’s budget, and this veto will translate into fiscal distress for cities and towns;

• If this cut is actually imposed, communities will be forced to implement sweeping reductions in vital services, including police and fire protection, education, public works, libraries and much more.  Cities and towns would lay off thousands of municipal and school employees, and increase their reliance on regressive property taxes; and

• The Governor’s local aid veto would reduce direct local aid from the $920 million passed by the Legislature down to $743 million, a 19 percent cut that would also result in the diversion of $110 million in local Lottery funds away from cities and towns, and use those dollars to balance the state budget instead of funding local services, as originally intended in state law.

Please Contact Your Legislators Immediately and Ask the House and Senate to Override the Local Aid Veto and Restore the $177 Million for Cities and Towns

This from the Massachusetts Municipal Association on the state budget passed by the legislature this week –

Monday, July 1, 2013

HOUSE-SENATE CONFEREES AGREE ON $34B FY ’14 STATE BUDGET AND FY ’13 SUPPLEMENTAL BUDGET

APPROVAL BY LEGISLATURE EXPECTED TODAY

KEY LOCAL AID ACCOUNTS WIN INCREASES:

• Unrestricted General Government Aid (UGGA) Increased by $21.25M Above FY ’13

• Chapter 70 Education Aid Increased by $130M Above FY ’13 Level

• All Cities, Towns & Districts Receive $25 Per Student Minimum Aid

• Budget Phases-In Target Share Aid as Proposed in Senate Ch. 70 Numbers

• Special Education Circuit Breaker Increased by $10.5M Above FY ’13 to $252.5M

• Regional School Transportation Increased by $6M Above FY ’13 to $51.5M

• Budget Includes Provision Tying Public Safety Residency to Collective Bargaining

• FY ’13 Supp. Budget Preserves Local Authority on Ambulance Fees

• FY ’13 Supp. Budget Provides $8M More for Charter School Reimbursements

• FY ’13 Supp. Budget Adds $8.3M to Reimburse Localities for U.S. Senate Election

CLICK HERE TO DOWNLOAD A COPY OF THE CONFERENCE COMMITTEE’S FISCAL 2014 STATE BUDGET, INCLUDING YOUR UNRESTRICTED GENERAL GOVERNMENT AID AND CHAPTER 70 NUMBERS, WHICH CAN BE FOUND IN SECTION 3 (PAGE 211)

Details of the House-Senate Conference Committee’s FY 2014 State Budget and FY 2013 Supplemental Budget, to be Voted on Monday, July 1^st:

• $21M  MUNICIPAL AID INCREASE: The Conference Committee budget provides a $21.25 million increase in Unrestricted General Government Aid (UGGA), guaranteeing that cities and towns will receive all of their Lottery revenues.  This increase is in the base local aid distribution of $920M as proposed by the House, and is NOT contingent on any surplus revenues.  The community-by-community distribution matches the House numbers approved in April.  This is a major win for cities and towns.

• $130M CHAPTER 70 INCREASE: The Conference Committee budget adds $130 million to Chapter 70, matching the distribution amounts approved in the Senate’s version of the budget in May.  The distribution guarantees $25 per student minimum aid for all cities, towns and school districts, and funds the existing schedule to implement the Chapter 70 formula, including the phase-in of target share aid as proposed by the Senate.  The distribution reflects a significant win for many districts.

• SPED CIRCUIT-BREAKER SEES BIG INCREASE: The Conference Committee budget increases the Special Education Circuit-Breaker account to $252.5 million, $22 million above the Governor’s proposed budget, and $10.5M above the FY ’13 appropriation, coming close to full funding.  This funding level is a major victory and will benefit every city, town and school district.

• REGIONAL SCHOOL TRANSPORTATION FUNDED: The Conference Committee Budget increases the Regional School Transportation account to $51.5 million, $7 million above the Governor’s proposed budget, and $6 million above the FY ’13 appropriation.  This is a 15.4 percent increase, representing major progress.

• McKINNEY-VENTO: The Conference Committee budget funds McKinney-Vento at $7.35 million, $1.3 million above the Governor’s proposed budget, but $4 million below final FY ’13 levels after the restoration of the December 9C cut.

•  CHARTER SCHOOL REIMBURSEMENTS: The Charter School Reimbursement account would be funded at $75 million in the Conference Committee’s FY ’14 appropriation, which is $28 million below full funding.  However, the Conference Committee’s FY ’13 supplemental budget would provide an $8 million supplemental increase for this account, which will provide a measure of relief for impacted communities.  The FY ’14 shortfall will be a major challenge for many cities, towns and school districts, and this issue must be addressed during the year ahead.

•  SHANNON ANTI-GANG GRANTS FUNDED AT $7M:  The Conference Committee budget would increase funding for Shannon Grants by $750,000, to $7M in FY ’14.

•  PILOT PAYMENTS UP BY $500K TO $26.77M: The Conference Committee budget would appropriate $26.77 million for Payments-In-Lieu-Of-Taxes (PILOT), a key account for cities and towns that host state property.  This is $500K more than the FY ’13 budgeted level.

•  LEGISLATURE FUNDS $8.3M TO REIMBURSE CITIES AND TOWNS FOR COST OF SPECIAL U.S. SENATE ELECTION: The FY ’13 supplemental budget approved by the Conference Committee contains $8.3 million for the Secretary of State’s office to reimburse cities and towns for the cost of the April primary and June general election to replace retired U.S. Senator John Kerry.  This important item provides the funding necessary to comply with a ruling by the State Auditor’s office that the special election law would otherwise be an unfunded mandate on cities and towns.

•  PUBLIC SAFETY RESIDENCY LIMIT LINKED TO COLLECTIVE BARGAINING: Sections 50 and 110 of the Conference Committee’s FY ’14 state budget would allow cities and towns to exceed the statutory 10-mile residency requirement for police officers and firefighters through collective bargaining.  This provision was in the Senate budget.  Currently, the law requires that police officers and firefighters reside no more than 10 miles from the communities in which they work, however, these sections of the budget would amend state law, stating that “cities and towns may increase the 10 mile residency limit under a collective bargaining agreement negotiated under Chapter 150E.”  The MMA is concerned about this language, and will be analyzing its potential impact.

•  LEGISLATURE’S BUDGET REAFFIRMS THE ABILITY OF CITIES AND TOWNS TO REGULATE LOCAL AMBULANCE FEES: The Conference Committee rejected a proposal that would have changed how cities and towns set fees for emergency medical services by giving this power to the Commissioner of Insurance instead of allowing communities to set fees locally.  Instead, Section 23 of the Conference Committee’s FY ’13 supplemental budget states that “payment to an ambulance service provider … shall be at a rate equal to the rate established by the municipality where the patient was transported from,” language that reaffirms local rate-setting authority.  The overall provision would ban the “pay-the-patient” practice for emergency ambulance service.  The MMA applauds the Conference Committee for embracing this provision.  It is important to note that the Governor has rejected similar language in previous budgets, so the matter is far from settled as the budget moves to the Governor’s Desk.  The MMA will be advocating for approval of the Conference Committee’s language.

Please Call Your Legislators Today and Thank Them for the Increases in Key Municipal and Education Programs

Thank You!

The Statehouse News is reporting that (NB new tax on software)  –

CONFEREES AGREE TO $500 MIL TAX BILL THAT DEVOTES $800 MIL TO TRANSPORTATION

STATE HOUSE, BOSTON, JUNE 25, 2013….House and Senate leaders struck a deal on Tuesday night to raise taxes by $500 million to fund short and long-term investments in the state’s aging highway and transit system, directing enough new revenue to the MBTA to forestall immediate fare increases and providing what lawmakers consider to be enough new funding to facilitate future expansion projects.

The House and Senate could vote on the bill as early as Wednesday when both branches will be in session.

The conference committee proposal, which is not be subject to amendment from lawmakers, would raise the gas tax by 3 cents a gallon and tie future increases to inflation. The per-pack tax on cigarettes would increase by $1, and lawmakers hope to collect $161 million by applying the state’s 6.25 percent sales tax to computer system design services, and $83 million from changes to the utility classification and sales sourcing for tax reporting.

The bill would require the Massachusetts Department of Transportation to come up with plans to toll additional roads, including border tolls, and appropriate $100,000 for an advisory council to help MassDOT develop a statewide asset management system.

Legislative leaders believe the plan will provide enough additional financial support to shore up the MBTA and MassDOT operations in the near-term, while also allowing for projects like the Green Line extension to Medford and South Coast rail to move forward.

Though the tax on software services was included in both the House and Senate bills and not subject to the most recent negotiations, Massachusetts Taxpayers Foundation President Michael Widmer blasted its inclusion in the bill, suggesting lawmakers have failed to grasp it full impact.

“State leaders could hardly have chosen a more perfect tax to undercut the future of the Massachusetts economy. This is the most sweeping computer and software services tax in the nation. It strikes at the heart of the state’s innovation economy and will stifle job creation for years to come,” Widmer told the News Service.

He estimated software design businesses will pay as much as $500 million in new taxes under the deal, far more than the $160 million lawmakers are expecting.

House Ways and Means Chair Brian Dempsey and Senate Ways and Means Chair Stephen Brewer were not available to comment on the accord, but the contours of the plan mirror those presented by House Speaker Robert DeLeo and Senate President Therese Murray in April, according to a summary obtained by the News Service.

The six-member conference committee – tasked with negotiating a compromise between the previously passed House and Senate versions of the bill – also accepted Senate-backed provisions that would direct up to $805 million in additional state spending to transportation needs by 2018. The concession from the House could help mitigate a threat from Gov. Deval Patrick to veto the bill if it insufficiently funded transportation.

To reach the higher new spending level on transportation, the House agreed to Senate-approved measures to sweep the underground storage tank removal fund of surplus revenues collected through a 2.5 cent per gallon surcharge on gas, and to require utilities to pay the state the fair market value for the use of rights-of-way on highways where they own infrastructure, such as poles.

The bill was filed in time Tuesday night to allow consideration of the bill on Wednesday without suspending legislative rules aimed at fostering transparency and time for lawmakers to review bills before voting on them. Dempsey, Brewer, Sen. Thomas McGee and Rep. William Straus all signed off on the agreement, while the Republican conferees Sen. Robert Hedlund and Rep. Steven Howitt did not sign the bill.

Gov. Patrick called the House bill a “pretend fix” to the state’s infrastructure problems when it passed in April and threatened to veto the measure if it got to his desk. He softened to the Senate’s version, however, and said last week on the radio he expects to be able to sign a law that approached $800 million in new transportation spending.

Patrick is in California visiting his daughter and new grandson, and his office did not have an immediate comment on the compromise.
The House and Senate tax bills (H 3415/S 1770) were sent to conference committee on April 22 after the House tax bill passed 97-55. The Senate bill was approved 30-5.

The conference committee bill would also close the budget gap at the T in fiscal 2014, avoiding the need for a second year of fare increases and service cuts, and envisions moving all MassDOT employees off the capital budget over three years.

Regional transit authorities would be forward funded starting in 2014 under the proposal. MassDOT and the MBTA would be required to generate their own new revenue sources and savings over the life of the five-year plan to meet spending expectations.

The Patrick administration, which proposed as much as a $1 billion in new transportation revenue and spending in its budget, has questioned whether multiple major transportation funding goals can be accomplished with less new revenue, and has even held up $150 million in local road funding as it waits to review the compromise bill.

-END-
06/25/2013

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