Category Archives: Budgets

This came today in my e-newletter from the Division of Local Services (DLS) at the Massachusetts Department of Revenue to explain what the Gov’s administration thinks are the highlights of her first budget.

Partnering with our Cities and Towns – FY24 Funding Updates Secretary Matthew J. Gorzkowicz – Executive Office for Administration & Finance FY24 Budget On Wednesday, August 9, Governor Healey signed the FY24 budget, representing $55.98 billion in historic investments in schools, child care, workforce development, public transit, housing, climate resiliency and other key areas that will help make Massachusetts more affordable, competitive, and equitable. In collaboration with our partners in the Legislature, the budget includes hallmark proposals from Governor Healey, including making community college free for students aged 25 and older through MassReconnect, expanding Commonwealth Cares for Children (C3) grants for early education and care providers, increasing funding for Early College, Innovation Career Pathways, apprenticeships and other workforce development programs, and dedicating 1 percent of the budget to energy and the environment for the first time. Through the FY24 budget, the Healey-Driscoll Administration is reaffirming our commitment to the state’s partnership with cities and towns, making historic investments in Chapter 70 school aid, unrestricted government aid, and student transportation. This spending plan fully funds another year of the Student Opportunity Act and dedicates resources to help cities and towns redevelop and revitalize their downtowns. In total, cherry sheet aid to municipalities across the Commonwealth is increasing $648 million, or 8.4%, over FY23, totaling $8.37 billion. With this being the administration’s first budget, we are excited to share some of the details on our support for cities and towns. Unrestricted General Government Aid (UGGA) A cornerstone of the administration’s commitment to partnering with municipalities is the expansion of Unrestricted General Government Aid, supporting essential local government services, including public safety, public works, and economic development. In FY24, UGGA is increasing by $39 million, or 3.2%, over FY23, totaling $1.27 billion. Education: Fully Funding the Student Opportunity Act The administration is focused on ensuring that all students have access to a high-quality public education. In FY24, Chapter 70 aid is increasing by $594 million, or 9.9%, over FY23, totaling $6.59 billion. This represents full funding of the Student Opportunity Act, the largest nominal increase in the history of the program, and the largest percentage increase in more than two decades. The budget also funds major increases in school transportation reimbursement ($21.3 million, 20%) and rural school aid ($9.5 million, 173%). It includes full funding for Special Education Circuit Breaker. FY24 also includes funding to make universal school meals permanent, ensuring every student across the Commonwealth has access to healthy nutrition during the school day. For school buildings, the FY24 budget includes $50 million for the new Green School Works program, providing grants to school districts for clean energy infrastructure, $100 million in supplemental grants to mitigate cost increases at school construction projects previously funded by the MSBA and an increase in the MSBA’s statutory cap to $1.2 billion. Municipal Partnerships The FY24 budget also includes funding for critical partnership programs between municipalities and the state. Some examples include: Increasing payments in lieu of taxes (PILOT) for state-owned land by $6.5 M (14%).   Increasing funding for public libraries by $3.8 million (12%).   $100 million in supplemental aid for municipal road and bridges, funded by Fair Share surtax revenues.   $16.3 million in funding for the Municipal Regionalization and Efficiencies Incentive Reserve, which funds programs including the Community Compact’s Best Practice ($2.1 million) and Efficiency and Regionalization Grant ($600,000) programs.   $600,000 for the Massachusetts Downtown Initiative for municipalities looking to revitalize their downtowns. FY24-FY28 Capital Investment Plan On June 22, the Healey-Driscoll Administration released its first five-year Capital Investment Plan (CIP), outlining more than $14 billion in investments over five years to build a more affordable, competitive, and equitable future for Massachusetts. The investments in the FY24-FY28 CIP complement and build on the funding proposed in the administration’s inaugural operating budget, with a particular emphasis on advancing climate, economic development, and housing goals – including the creation of a new $97 million HousingWorks program. For municipalities, the CIP includes significant funding for transportation, economic development, climate initiatives, technology infrastructure, and more. Transportation FY24 investments in transportation infrastructure across our cities and towns include: $200 million for Chapter 90 local transportation projects   $25 million for the Municipal Pavement Program   $15 million for the Municipal Small Bridge Program   $15 million for the Complete Streets Program   $8.5 million for the Shared Streets and Spaces Program   $6 million for the Local Bottleneck Reduction Program Economic Development The Healey-Driscoll Administration is committed to working with local leaders to build vibrant communities, revitalize downtowns, and create economic opportunity for all Massachusetts residents. In FY24, investments through the CIP include: $96 million for MassWorks infrastructure grants   $16.6 million for Revitalizing Underutilized Properties   $5 million for the Rural and Small Town Development Fund Climate Withstanding the climate crisis and protecting our environment requires a strong partnership between the state and local communities. The FY24 CIP continues investments in EEA’s programs that support communities as they plan for the future, including: $41.2 million for the Clean Water Trust Revolving Fund   $23.7 million for the Municipal Vulnerability Program (MVP)   $21 million for Community Investment Grants   $12 million for Inland Dams and Seawalls   $10 million for MassTrails grants to municipalities Technology Ensuring that all municipalities have the necessary technological infrastructure is critical for growth throughout Massachusetts. The FY24 CIP invests: $6.5 million for the Broadband Middle Mile Program   $5 million for the Community Compact Municipal Fiber Grant Program   $5 million for Community Compact Information Technology Grants   $1 million for the Broadband Last Mile Program Other Municipal Funding $25 million for Library Construction Grants   $10 million for Cultural Facilities Fund Grants   $4 million for Municipal ADA Improvement Grants   $1.6 million for Historic Preservation Grants We remain committed to working with our municipal partners in support of your efforts to make our Commonwealth stronger for all. Thank you for your dedication and hard work! For more information on the FY24 budget, please visit www.mass.gov/gaa. For more information on the FY24-FY28 Capital Investment Plan, please visit www.mass.gov/capital.   Register Today for the 2023 “What’s New in Municipal Law” Seminars The Division of Local Services Municipal Finance Law Bureau will offer its annual “What’s New in Municipal Law” seminars for local officials on Thursday, September 21, 2023 at the Bentley University Conference Center in Waltham and Thursday, September 28, 2023 at the Log Cabin Banquet & Meeting House in Holyoke. The seminars will be held in-person and run from 9am to 3pm. The registration fee is $100. Payment must be received by Friday, September 15th. Event check-in opens at 8:15am. Lunch will be provided. To view the registration form, please click here. Any questions regarding the seminars should be directed to dlsregistration@dor.state.ma.us.   Highly Recommended: Formal Financial Policies The DLS Financial Management Resource Bureau (FMRB) provides tailored consultative services to municipalities across the state. Articles in this series highlight a particular financial management best practice that we frequently recommend. The adoption of formal financial policies is a best practice that serves many important purposes. Among the most crucial of these is the directive guidance that fiscally prudent policies provide for achieving sound, long-term budgeting practices. Along with a capital improvement plan and long-range forecast, financial policies constitute one of the three key tools that DLS encourages all communities to employ to shape the development of annual budgets that are balanced and sustainable into the future. At a basic level, a policy constitutes a high-level plan for achieving certain goals within a defined topic area. In municipal government, financial policies can be divided into two broad categories. Fiscal planning policies present a roadmap to guide short- and long-term budget decisions. When they are well-reasoned, such policies help mitigate the risk of developing any structural imbalances while also providing a framework for sustaining and enhancing services. As the other category, financial operations policies promote accountability and enhanced coordination of services by defining procedural objectives and the related responsibilities assigned to applicable municipal officials and employees. Financial policies should be understood as a foundational component of the government’s larger system of internal controls and are themselves a form of internal control of the directive variety. It is because of this vital function that credit rating agencies such as Moody’s and Standard & Poor’s look favorably upon the presence of strong formalized policies when determining a community’s bond rating, which has a significant impact on the cost of borrowing. The effort to research, discuss, write, review, and finally adopt policies can seem a daunting task. As a result, many communities, especially smaller towns, have only informal and often unwritten guidelines that might only be passed along in an ad hoc fashion as local officeholders enter and leave municipal service. Such municipalities have a more tenuous hold on institutional knowledge and are also liable to be relatively myopic or disjointed in the pursuit of their goals. Hence, a prime objective for adopting formal, written policies is to serve as an educational tool that can foster long-term consistency and continuity in operational and budgeting practices. Furthermore, enhanced transparency in fiscal governance can be achieved through policy adoption, and we encourage cities and towns to incorporate fiscal policy text into their budget documents and presentations. While remaining more flexible and easier to modify than bylaws and ordinances, policies should provide instructive guidance to steer officials and employees toward objectives. To assure effectiveness, city and town officials must be thoughtful and proactive in promoting policy awareness within the organization. We also recommend communities to periodically review and revise their policies to address evolving goals and circumstances. From the financial management reviews and other municipal project work that FMRB has done over the years, the bureau has identified a minimum set of core policies we believe every city or town should adopt to manage the most significant areas of budgetary and operational risk. These are listed in the table below. FMRB has drafted 30+ policy manuals for cities and towns, each of which incorporates the above topics, as well as others desired by the client community. Any municipality that is conducting research to create or revise a policy manual may access them here.

Revised cherry sheet figures today on the Town of Medfield state aid:

The state budget was finally agreed upon by the legislature this week (a month into the fiscal year and long after the town had to set its own budgets at the annual town meeting (ATM) at the beginning of May).

The following are the Town of Medfield state aid amounts for FY24 that were just released – our state aid is $8,550,556, up $166,430 over FY23 (the last fiscal year):