The Massachusetts Municipal Association sent out this email today on its analysis of the Governor’s budget proposal:

GOV. BAKER FILES $42.7 BILLION FY 2020 BUDGET PROPOSAL

• UNRESTRICTED MUNICIPAL AID WOULD INCREASE BY $29.7M (2.7%)

• GOV’S CH. 70 PLAN WOULD INCREASE FY 2020 SCHOOL AID BY $200M (4.3%)

• BUT MANY DISTRICTS STUCK AT $20-PER-STUDENT MINIMUM AID

• CHARTER SCHOOL & SPECIAL ED REIMBURSEMENTS UNDERFUNDED

• MOST OTHER MUNICIPAL AND SCHOOL ACCOUNTS LEVEL-FUNDED

January 23, 2019

Dear Osler Peterson,

Earlier this afternoon, Gov. Charlie Baker submitted a $42.7 billion fiscal 2020 state budget plan with the Legislature, proposing a spending blueprint that would increase overall state expenditures by 1.5 percent, as the Administration deals with slow revenue growth by restraining most spending across the board and placing an estimated $297 million into the state’s rainy day fund. The budget relies on “significant” one-time revenues of at least $200 million from a “sales tax modernization proposal.”

UNRESTRICTED MUNICIPAL AID INCREASED BY $30 MILLION

As Gov. Baker pledged to local officials on Jan. 18 at the MMA’s Annual Meeting, his budget includes a $29.7 million increase in Unrestricted General Government Aid, tracking the expected 2.7% increase in state tax revenues.

Click here to see the Division of Local Services preliminary fiscal 2020 Cherry Sheet aid amounts for your community

OVERALL CHAPTER 70 SCHOOL AID WOULD GO UP BY $200 MILLION, YET A LARGE PERCENTAGE OF DISTRICTS WOULD REMAIN AT MINIMUM AID ONLY

The Governor filed separate legislation to amend the Chapter 70 school finance law, and provided a $200 million increase in school aid in his fiscal 2020 budget recommendation to fund the first year of what the Administration says is a seven-year plan to implement a number of changes to the current law, primarily in the areas recommended by the Foundation Budget Review Commission. An initial look at House 1 indicates that a large percentage of cities, towns and school districts would not benefit from the formula changes in fiscal 2020, and would remain minimum-aid-only. The budget plan sets the minimum aid increase at only $20-per-student, which would present large challenges for all of these communities. MMA members from across Massachusetts unanimously adopted a resolution calling for at least $100-per-student minimum aid at last week’s Annual Meeting.

Click here to see DESE’s calculation of fiscal 2020 Chapter 70 aid and Net School Spending requirements for your city, town, or regional school district, based on the Governor’s proposed budget and legislation

CHARTER SCHOOL REIMBURSEMENTS REMAIN SIGNIFICANTLY UNDERFUNDED; FIXING THE CHARTER SCHOOL FINANCE SYSTEM MUST BE PART OF ANY CHAPTER 70 REFORM PLAN

Further, the Administration is proposing a few changes to the Charter School Reimbursement Program, but this does not come close to achieving the permanent fix that is needed to repair the flawed charter school finance system. Current reimbursements this year are set at $90 million, $72 million below the full funding level of $162 million. The Governor’s budget would increase charter school reimbursements to $106 million, and would change the 6-year funding schedule of 100-25-25-25-25-25 to a new 3-year 100-60-40 schedule, phased in over 3 years, however the plan would also increase the facilities assessment payments to charter schools, and make other changes.

The MMA’s immediate analysis is that charter school reimbursements would continue to fall far short, and this restructuring would not fix the charter school finance system. This would continue to divert Chapter 70 funds away from municipally operated school districts, and place greater strain on the districts that serve 96% of public school children. No matter what changes are made to the Chapter 70 formula, major problems will continue unless a true resolution of the charter school funding problem is integrated into any reform or update of the school finance system.

SPECIAL EDUCATION CIRCUIT BREAKER UNDERFUNDED

The Governor’s budget would add $4.5 million to fund the Special Education Circuit Breaker program at $323.9 million, an increase of only 1.4%. Because special education costs are expected to rise in fiscal 2020, this means that the Governor’s budget substantially underfunds reimbursements. Today DESE officials said the House 1 appropriation would result in a 70% reimbursement, rather than the statutory 75%. This is a vital account that every city, town and school district relies on to fund state-mandated services. The MMA will again be asking lawmakers to ensure full funding in fiscal 2020.

REGIONAL SCHOOL TRANSPORTATION REIMBURSEMENTS LEVEL FUNDED

Gov. Baker’s budget submission would level-fund regional transportation reimbursements at the $68.9 million amount. This will be a hardship for virtually all communities in regional districts. Reimbursements for transportation of out-of-district vocational students remains significantly underfunded at $250K. Increasing these accounts is a priority for cities and towns.

McKINNEY-VENTO REIMBURSEMENTS LEVEL FUNDED

The Governor’s budget would level-fund reimbursements for the transportation of homeless students at $9.1 million. The impact of this funding level will vary from community-to-community depending on the number of homeless families that remain sheltered in local hotels and motels. The Administration has been successful in reducing the number of homeless students who are dislocated from their original district, but those communities that continue to provide transportation to many students may continue to see shortfalls.

PAYMENTS-IN-LIEU-OF-TAXES (PILOT), SHANNON GRANTS AND LIBRARY AID LEVEL FUNDED

The Governor’s budget would level fund PILOT payments at $28.48 million, Shannon anti-gang grants at $8 million, and fund library grant programs at $19.8 million.

PLEASE CONTACT YOUR LEGISLATORS TODAY AND CALL ON THEM

TO COMMIT TO COMPREHENSIVE REFORM OF OUR SCHOOL FINANCE LAWS TO BENEFIT ALL COMMUNITIES, INCLUDING FIXING THE FLAWS IN CHARTER SCHOOL FUNDING, AND FULLY FUNDING KEY MUNICIPAL AND SCHOOL PROGRAMS

THANK YOU!