Investing in Our Communities
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FY 2013 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
The FY 2013 budget continues the
Patrick-Murray Administration’s unprecedented support for cities and
towns. Major reforms achieved in FY 2012, particularly municipal health
reform, will continue to advance and have even greater impact for
municipalities in FY 2013. The Administration’s approach to FY 2013 also
includes additional tools to support municipalities in managing through this
fiscal crisis and beyond.
Municipal Health Care Reform
Municipal health care reform, signed into law by Governor
Patrick in July 2011, is already helping municipalities achieve significant
savings. More than 50 communities have taken steps to address their health
care costs in one of several ways: reaching agreement through traditional
bargaining, using the new reform’s decision-making process to make changes,
adopting the new local option reform or scheduling local votes for the coming
months.
The nine communities that have completed the new reform
process as of January 15, 2012, have collectively saved more than $30 M – putting
this reform on track to far exceed the initial estimate of $100 M in savings
for local governments statewide. In the first year, more than $16 M of these
savings are being realized by local governments, and more than $13 M by local
employees through premium reductions and mitigation benefits.
A dozen other communities have come to agreement through
traditional bargaining since Governor Patrick changed the municipal healthcare
conversation by proposing the new reform in January 2011, collectively saving
another $30 M in the first year of those agreements based on current
information.
Success story: Town of Arlington
In August 2011, just weeks after
the Governor signed municipal health reform into law, the Town of Arlington and
its Public Employee Committee used the new state negotiation process to agree
to join the Group Insurance Commission (GIC). Both the Town and its employees
will see significant savings in 2012.
Local Aid
Aid to cities and towns, or local aid, represents
approximately 16% of the Commonwealth’s annual budget. In FY 2013, local aid
programs account for $5.2 B, which reflects the Patrick-Murray Administration’s
unprecedented commitment to a strong partnership between the state and its
cities and towns:
- The FY 2013 K-12 Chapter 70 funding is $4.136 B, the
highest level of state K-12 education funding in history and a $145 M increase
over FY 2012 to ensure that all districts are fully funded at foundation
levels and that all districts will receive equal or greater funding than
FY 2012;
- The Chapter 90 Local Road
Program will be funded at $200 M for the second year in a row, $45 M more
than FY 2011 and $80 M more than the last year of the prior administration;
- Unrestricted General Government Aid (UGGA) will be
level-funded at $833.9 M. For the second year in a row, an additional
payment of $65 M will be made should sufficient surplus funds be available
from FY 2012;
- The budget invests $7 M for a second
round of the Community Innovation Challenge Grant Program to provide financial
support for one-time or transition costs related to innovative
regionalization and other efficiency initiatives in local governments;
- The budget invests $200,000 for the
development of a program to enhance performance management, accountability and
transparency for local governments. This initiative will be overseen by
municipal officials and administration officials with the support of the
Collins Center for Public Management at UMass Boston;
- Funding for the special education circuit breaker, which
goes directly to municipalities, is maintained at $213 M, which was
increased last year by $80 M;
- Level funding of State Owned Land (PILOT), Regional School
Transportation, Charter School Reimbursements and Library Aid;
- Caseload-driven increases to Veterans’ Benefits and Tax
Reimbursements to Veterans, the Blind and Widows; and
- Veterans’ homeless shelter reimbursement increase of $872,000
over FY 2012 spending, as the Department of Veteran Service’s will now
reimburse cities and towns for 100% of the costs they incur for the
homeless shelter benefits they provide to veterans, instead of only
reimbursing 75% of such costs.
Additional Initiatives for Fiscal Year 2013
-
The GIC will offer two entry opportunities for municipalities to
enter into the state health care system, making it easier for some
municipalities to achieve health insurance savings sooner than they otherwise
would.
-
The Administration will continue to support initiatives to enhance
sharing and flow of business information between state government and
municipalities, identify opportunities for state government to provide IT
services directly to local government (such as providing services at the new
Springfield Data Center), and create optimized procurement for IT contracts
that best serve municipalities.
-
The new Municipal Procurement Program within the state
Operational Services Division (OSD) will help municipalities save money by
purchasing items through statewide contracts that leverage purchasing power and
save money. OSD is now working with local government stakeholders to develop
procurement opportunities for school buses and heavy equipment vehicles.
Expanded Gaming Law Benefits for Local Governments
- The new expanded gaming law includes benefits for local
governments. All tax revenue received from licensing fees for slots will be
dedicated to local aid. As soon as a casino is operational, 25% of its total
tax revenue will go directly to local aid. Successful applicants for a gaming
license must demonstrate how they will protect the lottery from any adverse
impacts. The law also creates a Community Mitigation Fund to help cities and
towns impacted by a new gaming development, an Education Fund to help pay for
K-12 and higher education programs, and a Local Capital Projects Fund. We
cannot count on any revenue in FY 2013. While possible licensing fee for slots
would be received in FY 2013, the first $20 M of any licensing fee revenue
received must be used to reimburse the state for start-up costs incurred to
implement the gaming legislation.
Prepared by the Executive Office for Administration and Finance ·
www.mass.gov/budget/governor
For more information email: contactanf@massmail.state.ma.us (617) 727-2040