Category Archives: Budgets

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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This alert this afternoon from the Massachusetts Municipal Association about municipal issues pending before the House Senate Conference Committee that needs to reconcile the two differing versions of the state budget enacted by each for the next fiscal year, which begins 7/1/13 –

Tuesday, June 4, 2013

HOUSE-SENATE CONFERENCE COMMITTEE WORKING ON FISCAL 2014 STATE BUDGET

Call Your Legislators and Urge Their Support for Guaranteed Municipal Aid Increase of $21 Million

Ask Your Reps and Sens to Weigh in With Conferees on $21 Million for UGGA and Other Key Issues

With fiscal 2014 just a few weeks away, the House and Senate have both approved state spending plans for the year that would increase funding for local government, but the bills have important differences that will be resolved by a conference committee before a final budget can be sent to the governor.

Now is the time to contact your Representatives and Senators and ask for their commitment to call on the conference committee to support key local government accounts and issues.  The goal for legislators is to deliver a budget to the Governor’s desk 10 days before the start of the fiscal year on July 1, which means that key decisions will be made between now and Friday, June 21.  Legislators must hear from you during this time!

PLEASE CLICK HERE TO DOWNLOAD A COPY OF THE MMA’S LETTER TO THE HOUSE-SENATE BUDGET CONFERENCE COMMITTEE

HERE ARE THE MAJOR ISSUES TO DISCUSS WITH YOUR REPRESENTATIVES AND SENATORS:

ASK YOUR LEGISLATORS TO SUPPORT THE HOUSE PROVISION TO GUARANTEE A $21 MILLION INCREASE IN UNRESTRICTED GENERAL GOVERNMENT AID:  The House and Senate both voted to increase funding for the Cherry Sheet Unrestricted General Government Aid account by $21 million, to $920 million, but the Senate would make the funds contingent on surplus revenues from the state’s fiscal 2013 budget, and if those funds are available, they would not be certified or available until October or November.  The House would guarantee the increase by including the $21 million appropriation in the municipal aid base for fiscal 2014.

ASK YOUR LEGISLATORS TO SUPPORT THE SENATE FUNDING LEVEL FOR CHAPTER 70 SCHOOL AID: The Senate budget would increase the fiscal 2014 level of funding to $4.30 billion, an increase of $130 million, $15 million more than the House.  This appropriation would ensure that all districts are able to reach the “foundation” level of spending, continue the scheduled “target share” reforms to set a fair framework for state and local contributions, and guarantee that all districts receive at least $25 per student in new aid next year.  Also, please ask your legislators to strongly support the language in section 3 of the Senate bill that would begin a limited four-year phase-in to include the health care costs of retired teachers in “net school spending” under Chapter 70 in districts where it is not already included.  This is a very important change that would more accurately and consistently count school spending and bring greater integrity to the state’s system of school finance.

ASK YOUR LEGISLATORS TO SUPPORT THE SENATE’S APPROPRIATION TO FULLY FUND THE SPECIAL EDUCATION CIRCUIT BREAKER:  The Senate budget would cover the estimated full state share of the special education circuit breaker program at $253 million, an increase of $10 million over the current fiscal 2013 level of funding, and $14 million more than the House would provide.  The circuit breaker was an important part of the landmark special education reform law of 2000 and helps all municipal and regional school districts afford quality care for students with the greatest needs.  Full funding was a signature achievement of the Legislature’s last year, and the $253 million appropriation is necessary to maintain the same level of commitment to the program.  These funds benefit citizens in every city, town and school district in the state.

ASK YOUR LEGISLATORS TO OPPOSE SECTION 37 OF THE SENATE BUDGET, WHICH WOULD ELIMINATE THE 10-MILE RESIDENCY REQUIREMENT FOR FIREFIGHTERS AND POLICE OFFICERS AND INCLUDE THIS IN COLLECTIVE BARGAINING:  Section 37 of the Senate bill would eliminate the statutory 10-mile residency requirement for police officers and firefighters and provide that residency is a subject of collective bargaining.  There is no similar provision in the House bill.  Currently, the law requires that police officers and firefighters reside no more than 10 miles from the communities in which they work.  Section 37 would undermine the management rights of cities and towns.  Currently, management may decide to seek a shorter limit, or may be willing to provide some flexibility, but that decision is entirely up to the municipal chief executive, who is held accountable by the voters on matters of public safety and security.  By statutorily stating that the residency limit would be a subject of collective bargaining, section 37 would strip the executive of this prerogative, and the residency law would be determined by the outcome of a bargaining agreement, exposing communities to serious management and logistical issues.  By making the residency limit an explicit subject of collective bargaining, section 37 would, for the first time, make the residency requirement subject to binding decisions by either the Joint Labor Management Committee or other entities, whereby an unaccountable arbitrator unfamiliar with the needs in a given municipality could unilaterally extend the residency limit beyond 10 miles, over the objections of the mayor, board of selectmen, manager or police chief.  This would be a major infringement on management rights, and would raise serious public safety concerns in affected municipalities.

ASK YOUR LEGISLATORS TO OPPOSE SECTION 92 OF THE SENATE BUDGET, WHICH WOULD STRIP CITIES AND TOWNS OF THE ABILITY TO SET FEES FOR EMERGENCY MEDICAL SERVICES (AMBULANCES):  Outside Section 92 of the Senate budget would make a detrimental change to 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.  There is no similar provision in the House bill.  Currently, cities and towns set fees and charges for a wide range of municipal services strictly limited by state law to the cost of providing that service. This is the same rule that applies to local charges for emergency medical services and ensures that rates are reasonable, and prevents insurance companies from shifting costs to local property taxpayers through below-cost reimbursements. The Legislature approved legislation last session that clarified this authority, but the bill was vetoed by the Governor. We do not believe that allowing the Commissioner of Insurance to set local fees and charges through regulation is the appropriate course of action, as this would undermine a local process that is currently fair and working well across the Commonwealth, and could seriously disrupt municipal finances if the state bureaucracy sets fees that are inadequate. While Section 92 would address the increasingly problematic “pay the patient” tactic used by insurance companies, it would take a step back by allowing the commissioner of insurance to set local rates through regulation, and would undermine a local process that is currently fair and working well across the Commonwealth.

ASK YOUR LEGISLATORS TO SUPPORT THE SENATE FUNDING LEVEL FOR CHARTER SCHOOL REIMBURSEMENTS:  The diversion of Chapter 70 school aid away from public schools to charter schools as tuition payments is a growing financial burden on local government as more charters are granted and existing schools expand.  The Department of Elementary and Secondary Education (DESE) estimates that in fiscal 2014 it will require $103 million to fully fund the state’s obligation to cover a portion of the loss of Chapter 70 school aid as required in the 2010 education reform law reimbursement formula.  This account is seriously underfunded in both the House and Senate budgets.  For fiscal 2014, we support the Senate appropriation to provide $76 million, which is $6 million more than the House number, and thus falls short of full funding by a smaller margin.

ASK YOUR LEGISLATORS TO SUPPORT THE SENATE BUDGET FOR MCKINNEY-VENTO FUNDING:  The Senate appropriation would provide $7.4 million to pay for the unfunded state mandate to provide transportation services to homeless students to schools outside the local school district, which is $1.3 million more than the House.  This is a very important account to the cities and towns across the state obligated to provide costly transportation services through the state’s acceptance of the federal McKinney-Vento grant.  The Legislature fully funded the account at $11.3 million this year.

ASK YOUR LEGISLATORS TO SUPPORT THE SENATE BUDGET FOR REGIONAL SCHOOL TRANSPORTATION:  The Senate would appropriate $51.5 million to fund reimbursements to school districts to help pay for a portion of the costs of transporting students, $5.5 million more than the House.  The additional funding would help all cities and towns in regional school districts.  DESE estimates that it would require $78 million to cover the state’s full share of this program.  In addition, the Senate would provide $3 million to reimburse cities and towns for the cost of transporting students to out-of-district vocational education programs.

ASK YOUR LEGISLATORS TO SUPPORT SENATE FUNDING FOR THE SHANNON GRANT PROGRAM:  The Senate appropriation would increase funding for the Shannon Anti-Gang Grant Program to $7 million, which is $2.5 million more than the House. This program is crucial to assist those communities dealing with very challenging public safety and gang-related issues.

ASK YOUR LEGISLATORS TO SUPPORT SENATE FUNDING FOR PAYMENTS-IN-LIEU-OF-TAXES (PILOT):  The Senate would provide $27.27 million in reimbursements due under the law to cities and towns that host and provide municipal services to state facilities, while the House would level fund the program at $26.27 million. PILOT payments are vitally important for those cities and towns that host state facilities, and the program has been underfunded for many years.

Call Your Legislators Today and Urge Their Support for Cities and Towns in the Fiscal 2014 State Budget

Thank You!

A Massachusetts Municipal Association alert this morning (copy below) indicates that the Senate passed its version of the state budget last night, and since the Senate voted more monies that the House, it goes to a conference committee now –

Friday, May 24, 2013

SENATE FINISHES DEBATE ON FY 2014 BUDGET

Senators Add Funding to Several Key Accounts

Senate Would Tie UGGA Increase to FY 2013 Surplus

State Budget Now Goes to Conference

Late last night, on Thursday, May 23, the Massachusetts Senate concluded debate on its $34 billion version of the fiscal 2014 state budget.

The full Senate embraced the Senate Ways and Means Committee recommendation to increase the appropriation for Chapter 70 school aid by $130 million over the fiscal 2013 level of funding, $15 million more than voted by the House last month, and included language in section 3 that would begin a limited four-year phase-in to include the health care cost of retired teachers as “net school spending” under Chapter 70.  This is an important change that would more accurately count school spending and bring greater integrity to the state’s system of school finance.

Senators also appropriated $253 million to fund the estimated full state share of the special education “circuit breaker” program, an increase of $10 million over the final fiscal 2013 level of funding, now that the Governor has reversed the earlier 9C reduction.   The Senate budget also includes a $3 million appropriation to reimburse cities and towns for the cost of transporting students to out-of-district vocational education programs.

Senate members considered 725 amendments, including many that the MMA promoted to add funding to key municipal and education accounts, and others that would impact the administration of local government.

The next step in the process will be for the House and Senate to appoint members of a special conference committee to iron out the differences and present a consensus budget to legislators prior to the beginning of the new fiscal year on July 1.

Here is a summary of Senate action on the key amendments and issues highlighted in the MMA’s budget Action Alert sent on Tuesday, May 21:

SENATE ADOPTS AMENDMENT TO PROVIDE A $21 MILLION INCREASE IN UNRESTRICTED GENERAL GOVERNMENT AID, CONTINGENT ON USING SURPLUS REVENUES FROM FISCAL 2013

The budget proposed by the Senate Ways and Means Committee did not include the $21 million increase for unrestricted municipal aid (the UGGA account) that the House embraced in its version of the fiscal 2014 budget.

The Senate Ways and Means budget would have level-funded UGGA at $899 million, in contrast with the House budget, which would increase the UGGA distribution by $21 million, bringing municipal aid up to $920 million for fiscal 2014.  The House budget reflects expected growth in Lottery revenues next year, which is now the main revenue source for UGGA distributions, and provides communities with a 2.3 percent increase, which is very modest when compared to the 4.4 percent growth in state spending that is contemplated in the Legislature’s fiscal 2014 budget framework.

The Senate adopted an amendment to use $21 million from a possible fiscal 2013 year-end surplus to bring UGGA distributions to cities and towns up to $920 million in fiscal 2014.  This approach is similar to the $65 million UGGA allocation that cities and towns received in November of 2011 during fiscal 2012, funded with surplus revenues from fiscal 2011.  The benefit is that cities and towns would likely receive the $21 million increase during fiscal 2014, but the disadvantage is that these funds are not guaranteed, and cannot really be budgeted for ongoing operations.  The MMA will be calling on the Conference Committee to adopt the House approach, which would guarantee the $21 million increase in your local aid base.

THE SENATE DID NOT INCREASE REIMBURSEMENTS FOR SCHOOL AID DEDUCTIONS FOR CHARTER SCHOOL TUITION

DESE estimates that it would require $103 million to fully fund the state’s obligation to reimburse cities and towns for a portion of the Chapter 70 aid lost to charter schools, as required in the 2010 education reform statute.  H. 1 included an appropriation of $80.3 million, but the Senate budget would fund the account at only $76.4 million.

The Senate rejected an amendment to fully fund the state’s share next year at $103 million. This remains a very important priority for those communities that host charter schools – without full funding, programs for students in the traditional public school system will be harmed.

THE SENATE ADOPTED AN AMENDMENT MAKING THE PUBLIC SAFETY RESIDENCY LIMIT A SUBJECT OF LOCAL COLLECTIVE BARGAINING

Police officers and firefighters are required by law to live within 10 miles of the community in which they work.  Many cities and towns have included more restrictive residency provisions in their collective bargaining contracts, and the Senate adopted an amendment to allow collective bargaining to decide whether to exceed the 10-mile limit.  The MMA is gravely concerned that this amendment would make a critical management right, the determination of whether to exceed the 10-mile limit, subject to bargaining and arbitration.  The MMA will be working to strike this amendment from the final version of the budget.

THE SENATE ADDED $1.25 MILLION TO THE McKINNEY-VENTO MANDATE REIMBURSEMENT, BRINGING THE ACCOUNT UP TO $7.35 MILLION

Senators voted to add $1.25 million to the original appropriation to pay for the unfunded state mandate to provide transportation services to homeless students to schools outside the local school district. The Senate now stands at $7.35 million, compared to the House appropriation of $6.1 million.  The fiscal 2013 appropriation is $11.3 million, now that the Governor has rescinded his earlier 9C reduction.

SHANNON ANTI-GANG GRANT PROGRAM

Senators adopted an amendment to fund the Shannon Anti-Gang Grant Program at $7 million, which is $2.5 million more than the House budget, and $750,000 more than this year’s funding level.  This program is crucial to assist those communities dealing with very challenging public safety and gang-related issues, which is why the Senate funding level deserves to prevail.

SENATE ADDS $2 MILLION MORE TO REGIONAL SCHOOL TRANSPORTATION REIMBURSEMENTS, BRINGING THE ACCOUNT UP TO $51.5 MILLION

The Senate approved an amendment to add $2 million more to reimbursements to school districts to help pay for a portion of the costs of transporting students, increasing the Senate funding for the account to $51.5 million.  The House voted to fund the account at $46 million, and the current funding level is $45.5 million.  DESE estimates that it would require $78 million to cover the state’s full share of this program, which demonstrates how far the Commonwealth is from meeting its commitment.  The MMA will be advocating for the Senate number.

$1 MILLION ADDED TO THE PAYMENT-IN-LIEU-OF-TAXES FOR STATE-OWNED LAND ACCOUNT, BRINGING THE SENATE UP TO $27.3 MILLION

The Senate voted to increase the PILOT program from its current funding level of $26.3 million up to $27.3 million.  The Governor and House budgets would level fund the account.  PILOT payments are vitally important for those cities and towns that host state facilities, and the program has been underfunded for many years.

SENATE BUDGET INCLUDES PROBLEMATIC PROVISION ON EMERGENCY MEDICAL SERVICES PAYMENTS

Section 92 of the Senate budget would make a detrimental change to how cities and towns set fees for emergency medical services.  Cities and towns set fees and charges for a wide variety of municipal services strictly limited by state law to the cost of providing the service.  This is the same rule that applies to local rate setting for emergency ambulance services and ensures that rates are reasonable and prevents insurance companies from shifting costs to local property taxpayers through below-cost reimbursements.  The Senate approved legislation last session that clarified this authority, but that important measure was vetoed by the Governor.  While Section 92 would block the increasingly problematic “pay the patient” tactic used by insurance companies, it would take a step back by allowing the commissioner of insurance to set local rates through regulation, and would undermine a local process that is currently fair and working well across the Commonwealth.  The MMA will be working to improve or strike the provision from the final fiscal 2014 budget.

PLEASE CHECK THE MMA WEBSITE (WWW.MMA.ORG) FOR FURTHER UPDATES AS ANALYSIS OF THE SENATE BUDGET CONTINUES.