SENATE WAYS AND MEANS BUDGET WOULD INCREASE KEY LOCAL AID ACCOUNTS IN FISCAL 2015

SENATE WAYS AND MEANS BUDGET WOULD INCREASE KEY LOCAL AID ACCOUNTS IN FISCAL 2015

Yesterday, the Senate Ways and Means Committee released a $36.25 billion state budget recommendation that will be debated by the full Senate next week. The SW&M budget local aid highlights include:

• INCREASE OF $25M FOR UNRESTRICTED GENERAL GOVERNMENT AID (UGGA) – the same increase passed by the House, and $25M more than recommended by the Governor

• INCREASE OF $99.5M FOR CHAPTER 70 – the same level of funding passed by the House and recommended by the Governor

• INCREASE OF $18.7M FOR REGIONAL SCHOOL TRANSPORTATION REIMBURSEMENTS – an impressive 36% boost that would fund this key reimbursement account at 90% of full funding, which is $16.7M more than the House budget, and $18.7M more than in the Governor’s budget

• INCREASE OF $7.9M FOR THE SPECIAL EDUCATION CIRCUIT-BREAKER PROGRAM TO ENSURE FULL FUNDING – the SW&M recommendation is $7.9M more than in the Governor’s budget, and the House budget increases funding with a slightly different number that is also intended to fully fund the program

• INCREASE OF $5M TO CHARTER SCHOOL REIMBURSEMENTS – the same increase passed by the House, which is $5M more than recommended by the Governor, but still approximately $33M below full funding

• INCREASE OF $3.2M FOR MUNICIPAL LIBRARIES – this is $2.8M more than in the House budget, and $3M more than requested by the Governor

• INCREASE OF $1M FOR PAYMENTS-IN-LIEU-OF-TAXES (PILOT) – this is $1M more than in the House budget, and $1.5 million above the Governor’s recommendation

• LEVEL-FUNDING FOR MCKINNEY-VENTO REIMBURSEMENTS AT $7.35M – the same amount passed by the House and recommended by the Governor, and still $7.5 million below full funding

• INCLUDES $3M FOR TRANSPORTATION REIMBURSEMENTS FOR OUT-OF-DISTRICT VOCATIONAL STUDENTS – this program was funded at $1.5 million by the House, and was not included in the Governor’s recommendation

• SW&M BUDGET INCLUDES IMPORTANT REFORMS TO PROVIDE NET SCHOOL SPENDING EQUITY TO ALLOW ALL COMMUNITIES TO COUNT RETIREE HEALTH COSTS – this is a key provision that is also in the House budget

As expected, the Senate Ways and Means Committee yesterday released its version of the fiscal 2015 state budget (S. 4), a $36.25 billion budget plan with a bottom line that is lower than the Governor’s recommended budget, yet provides more funding for targeted municipal and school aid programs.

The Senate plan would spend less than the amount recommended by the Governor in January, avoid the tax increases proposed in the Governor’s budget (H. 2), draw less from the rainy day fund, and increase municipal and school aid accounts used to balance local budgets by $64.1 million above the amount recommended in H. 2.

Cities and towns are facing serious fiscal challenges, and the MMA will be working to build on the Senate Ways and Means budget when the full membership begins debate on Wednesday, May 21. In the meantime, Senate members will have until 3:00 p.m. on Friday, May 16 to file budget amendments.

Click here to link to the Senate Ways & Means Committee’s budget site and see the entire budget: http://malegislature.gov/Budget/FY2015/Senate

PLEASE CONTACT YOUR SENATORS AND TELL THEM HOW THIS BUDGET IMPACTS YOUR COMMUNITY

THE FOLLOWING IS AN INITIAL ANALYSIS OF THE KEY LOCAL AID AND POLICY ITEMS INCLUDED IN THE FISCAL 2015 STATE BUDGET PROPOSED BY THE SENATE WAYS AND MEANS COMMITTEE:

$25 MILLION INCREASE IN UNRESTRICTED GENERAL GOVERNMENT AID

The SW&M budget plan funds the $25.5 million increase in Unrestricted General Government Aid that was announced in the local aid resolution in March and passed by the House in April, increasing UGGA funding from $920.23 million to $945.75 million. The Governor’s budget would have level-funded this vital source of local aid. The Legislature’s commitment to increase this vital source of local aid is deeply appreciated.

CHAPTER 70 INCREASE REMAINS AT $99.5 MILLION

The Senate leadership’s proposed budget also reflects the $99.5 million increase in Chapter 70 funding proposed by the Governor, passed in the Legislature’s local aid resolution, and included in the House budget passed in April, to fund Chapter 70 aid at $4.4 billion. The plan would bring all cities and towns up to foundation levels, phase in the target share funding provisions, and provide all communities with a minimum increase of $25 per student. Most cities, towns and regional school districts are slated to only receive the minimum aid increase of $25 per student, an amount that is inadequate to maintain existing program levels. Although the MMA will continue to call on legislators to provide a higher minimum aid increase when the full budget is debated next month, legislative leaders are insisting that the debate on Chapter 70 funding took place during the adoption of the local aid resolution last month.

$18.7 MILLION MORE FOR REGIONAL SCHOOL TRANSPORTATION REIMBURSEMENTS

The Governor’s budget would have level-funded regional school transportation reimbursements at $51.5 million, and the House budget would add $2 million for fiscal 2015. Senator Brewer, the Chair of the Senate Ways and Means Committee, has been a strong supporter of increased funding for this key account for small and medium-sized communities, and has proposed a 36% increase of $18.7 million to bring funding up to $70.25 million. This would bring reimbursement funding up to 90%, the highest percentage in a generation.

$7.9 MILLION MORE FOR SPED CIRCUIT BREAKER TO FULLY FUND THE PROGRAM

The Senate Ways and Means budget would fund the Special Education Circuit Breaker program at $260.4 million, a $7.9 million increase intended to fully fund this essential reimbursement program. The Governor had proposed level-funding, which would have generated a shortfall due to rising costs. House members also intend to fully fund the program with a slightly lower $5 million increase. The good news is that Senate and House leaders are committed to full funding for this vital account.

CHARTER SCHOOL REIMBURSEMENTS RECEIVE $5M INCREASE, STILL UNDERFUNDED

Under state law, cities and towns that host or send students to charter schools are entitled to be reimbursed for a portion of their lost Chapter 70 aid. The state fully funded the reimbursement program in fiscal 2013, but so far is underfunding reimbursements by $27.6 million this year (the good news is that the House is acting on a supplemental budget to fully fund the program in fiscal 2014). The Governor’s fiscal 2015 budget would level-fund charter school reimbursements at $75 million, which would set the stage for a shortfall of $38 million in fiscal 2015. The SW&M budget would increase reimbursements by $5 million, to a total of $80 million, the same amount in the House-passed budget. This represents progress, but the program would still be underfunded by $33 million next year. Underfunding the charter school reimbursement program causes major fiscal distress in every community that has a significant charter school presence. Only a small fraction of the public school students attend charter schools. Underfunding this program would force cutbacks for the vast majority of students who remain in the traditional school setting.

INCREASE OF $3.2M FOR MUNICIPAL LIBRARIES

Aid to municipal libraries is funded at $6.8 million this year, and the Governor recommended a $200K increase for fiscal 2015. The House budget would increase the program to $7.2 million and the SW&M recommendation is to fund this account at $9.99 million, a $3.2 million increase over fiscal 2014.

$1 MILLION INCREASE FOR PAYMENTS-IN-LIEU-OF-TAXES (PILOT)

The Governor’s budget would have cut $500,000 from PILOT payments, reducing the program to $26.27 million. The House budget would restore this funding, and keep the account at the fiscal 2014 level of $26.77 million. The SW&M budget would increase funding by an additional $1 million, bringing the program up to $27.77 million in fiscal 2015.

McKINNEY-VENTO REIMBURSEMENTS UNDERFUNDED

The HW&M and Governor’s budgets would level-fund reimbursements for the transportation of homeless students at $7.4 million, which is at least $7 million below the full reimbursement called for under the state’s unfunded mandate law. Two years ago, the State Auditor ruled that the adoption of the federal McKinney-Vento law imposed an unfunded mandate on cities and towns. The program was funded at $11.3 million in fiscal 2013 and $7.4 million in fiscal 2014. Level-funding the program would continue to impose a significant burden on those cities and towns that are providing transportation services to homeless children who have been placed in their communities by the state.

$3M FOR VOCATIONAL EDUCATION REIMBURSEMENTS

Last year the Legislature established a $3 million program to reimburse cities, towns and school districts for the costs of transporting students to out-of-district vocational schools. The Governor did not include any funding for the program in fiscal 2015, and the House restored $1.5 million. The SW&M budget would fully restore funding to $3 million.

$6.5 MILLION FOR SHANNON ANTI-GANG GRANTS

The SW&M budget would fund Shannon Anti-Gang grants at $6.5 million in fiscal 2015. The House budget would provide $6 million, and the Governor recommended $8 million. Current funding is $7 million this year.

NET SCHOOL SPENDING EQUITY REFORMS INCLUDED IN SW&M BUDGET

The SW&M budget includes important law changes to establish equity in calculating net school spending under Chapter 70 to allow all communities to count health insurance costs for retired school employees in fiscal years 2016 and beyond, phased in over 4 years, and allow DESE to waive penalties in the meantime. This critically needed language was also adopted in the House budget.

THE SENATE WILL BEGIN DEBATE ON THE BUDGET ON WEDNESDAY, MAY 21.

PLEASE CALL YOUR SENATORS TODAY AND URGE THEM TO BUILD ON THE PROGRESS CONTAINED IN THE SENATE BUDGET COMMITTEE’S RECOMMENDATIONS