Cities and towns in local aid limbo
Photo | Courtesy of Commonwealth of Massachusetts
Massachusetts State House
Cities and towns will likely need to wait weeks longer to find out how much state aid they'll receive in the next year, and the answers they get will have spillover effects on municipal budgets and possibly even local property taxes.
With the contours of a fiscal 2024 budget bill now in the hands of a House-Senate conference committee, members of the Local Government Advisory Commission on Tuesday pitched the Healey administration on what they want to see in the final spending plan, typically backing the most generous funding levels under consideration.
Waltham City Councilor John McLaughlin called revenue-sharing between the state and its municipalities "critical," and he endorsed the $1.27 billion in unrestricted general government aid (UGGA) in the Senate-approved budget as the best option for cities and towns.
The Senate's plan would increase UGGA about 3.2 percent over fiscal year 2023 levels. Gov. Maura Healey proposed about $1.255 billion in UGGA, about 2 percent more than the current budget, and the House budget would allocate $1.25 billion.
Many cities and towns rely on UGGA to help craft their own budgets, McLaughlin said, warning that local sources of revenue like hotel taxes have not returned to pre-COVID levels despite substantial spending needs.
"Although Waltham has experienced a gradual return to pre-pandemic amounts from local revenue sources, we are still not fully recovered, hence the need for the state to continue to bridge that gap," he said.
In Waltham, McLaughlin said, councilors approved a city budget for next year that anticipates the Senate's proposed amount of local aid winning final approval, not the lower offerings from Healey -- which the Massachusetts Municipal Association previously described as insufficient -- or the House.
"Any decrease in the Senate version of UGGA would require us to find another revenue source, which, you know, we don't want to say it, but it very well could be property taxes," McLaughlin said. "I've said this in this room before: every dollar we can receive from state aid or collect from local receipts is one less dollar we need to levy in property taxes."
Another LGAC member, Christine Hoyt of the Adams Select Board, told Healey administration officials that cities and towns hope conference committee negotiators will settle on the House's proposal for $107 million in regional school district transportation funding, which would reimburse 100 percent of those costs incurred. The Senate and Healey budgets instead sought $97 million, a reimbursement rate of about 90 percent.
"Our regional school district, Hoosac Valley Regional School District, has seen an increase in Chapter 70 [education aid] over the last five years," Hoyt said. "Decreasing steadily over the last five years has been the state reimbursement for transportation, and increasing steadily over the last five years has been the assessment that Adams has paid."
North Andover Deputy Town Manager Denise Casey voiced another priority for the LGAC: making permanent a pandemic-era program offering free meals to all students in schools.
State government took over funding the universal meals option on an interim basis after federal funding expired, and the House in its budget proposed making it permanent using $161 million in surtax revenue.
"As this was started during the pandemic, we see this as a natural step to take to address this permanent issue and need in our public schools," Casey said.
The Senate and Healey did not include any permanent free school meals measure in their annual budgets, and officials in both cases said they believe a standalone supplemental budget extending the program for another year is a better approach.
The prospects for big new funding commitments being included in supplemental budgets could be affected by state tax collections running behind benchmarks.
Where the spending measures land as far as final numbers will not become clear until legislative negotiators produce an accord on the divergent, roughly $56 billion budget bills. Lawmakers in recent years have shown little urgency to complete the annual budget before the fiscal year starts on July 1.
Once upon a time, the Legislature each spring would adopt a non-binding local aid resolution laying out minimum amounts cities and towns could expect to receive in the upcoming budget to give them some degree of certainty before deliberations began.
That practice has fallen by the wayside, and attempts to revive it -- typically led by Republicans -- have been unsuccessful.
In 2015, the Senate voted 7-29 to reject a joint rules amendment codifying the need for the Legislature to adopt a local aid resolution ahead of each budget debate. Senate President Karen Spilka, who at the time chaired the Senate Ways and Means Committee, said such a requirement "would really tie our hands."
Most recently, during the House's February deliberations on a joint rules package that has yet to be finalized, House Minority Leader Brad Jones proposed an amendment calling for a local aid resolution by March 31 each year. The Democrat-controlled House rejected the measure 23-130.
City and town officials are also still waiting for final approval of an annual road and bridge maintenance funding bill. The House and Senate in March each approved packages combining $200 million in Chapter 90 funds with $150 million in infrastructure-related grants, and the only point of disagreement appears to be whether $25 million of those grants should go toward non-federally aided state-numbered routes and municipal roads or toward communities with "low population density."
Democrats failed to reach agreement informally for more than two months, and last week took the step of sending the bills into a conference committee for negotiations.
Williamstown Select Board member Andy Hogeland on Tuesday thanked Lt. Gov. Kim Driscoll and other administration officials for "trying to jumpstart the Chapter 90 funding by getting it filed early" and for proposing a two-year, $400 million authorization after municipalities for years requested approval for more than a single year of funding.
"I'm sorry the Legislature did not agree with you," Hogeland said.
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