- Budget Message
- Key Initiatives
- Budget Recommendations
- Local Aid to Cities and Towns
Local Aid Overview
Governor Patrick’s FY 2015 budget maintains the Patrick Administration’s unprecedented commitment to building strong partnerships with cities and towns and supporting their efforts to operate more effectively and efficiently. Governor Patrick continues support in FY 2015 for programs that cities and towns are using to change the way local government does business at an unprecedented pace, with the overarching goal of preserving local services for residents and taxpayers.
Budgeted Local Aid
Aid to cities and towns, or local aid, represents approximately 15% of the Commonwealth’s annual budget. The Governor’s FY 2015 budget supports a total of $5.6 B in local school aid, general government aid and program-specific aid. This represents a 2% or $100 M increase in total funding support to the Commonwealth’s cities and towns from FY 2014 estimated spending. Local aid is categorized by the programs that impact a municipality’s “Cherry Sheet,” the vehicle used by the Commissioner of Revenue to notify municipalities and regional school districts of estimated state aid to be paid and charges to be assessed over the next fiscal year. Below is a summary of funding for local aid cherry sheet accounts:
|Account Name||FY 2014 Estimated Spending||FY 2015 Budget Recommendation|
|Section 3 Aid|
|Chapter 70 Education Aid||4,301,214,591||4,400,696,186|
|Unrestricted General Government Aid||920,230,293||920,230,293|
|Cherry Sheet Aid|
|Tax Reimbursement for Vets, Blind, Widows||24,038,075||24,038,075|
|State Owned Land||26,770,000||26,270,000|
|Regional Library Local Aid||9,579,475||9,723,978|
|Municipal Libraries Local Aid||6,823,657||6,960,130|
|Local Share Racing Tax||1,150,000||0|
|Regional School Transportation||51,521,000||51,521,000|
|School Food Services Program||5,426,986||5,426,986|
|Charter School Reimbursement||75,000,000||75,000,000|
|% Change from Prior year||2%|
Section 3 of the Governor’s budget provides each of the 351 cities and towns with the amount of local aid they are expected to receive from the state General Fund and other dedicated revenue sources.
In keeping with the Patrick Administration’s commitment to education, the Governor’s FY 2015 budgets $4.4 B in Chapter 70 funding, the highest level of state K-12 education funding in history. This $100 M increase over FY 2014 funding will fully fund schools at foundation levels and make further progress on completing the education reforms of 2007. It will also allow local educational authorities the flexibility to fund initiatives most needed in their communities. By providing flexibility at the local level, this funding level allows schools to prioritize funding where it is needed most, whether it is special education, English language initiatives, MCAS support, or literacy programming. This increased funding will also account for the following factors in the Chapter 70 funding allocation to local educational authorities:
- All districts are fully funded at foundation levels;
- All districts will receive at least an increase of $25 per pupil; and
- Elimination of the cap of pre-kindergarteners included in enrollment for Chapter 70.
In addition to this $4.4 B, funding for the special education circuit breaker, which goes directly to municipalities, is maintained at $252 M, after an increase in FY 2014 of $11 M.
Aid to cities and towns, or local aid, represents approximately 15% of the Commonwealth’s annual budget. In FY 2015, local aid programs account for $5.6 B, which reflects the Patrick Administration’s unprecedented commitment to a strong partnership between the state and its cities and towns:
- Unrestricted General Government Aid (UGGA) will be preserved at $920 M, after an increase in FY 2014 of $20 M, the first increase in unrestricted local aid since FY 2008;
- The budget invests $3.75 M for a fourth round of the Community Innovation Challenge (CIC) Grant Program to provide support for one-time or transition costs related to innovative collaborations and other efficiency initiatives in local governments;
- A $1 M investment is made in the Shannon Anti-Gang Grant program, increasing it to $8 M;
- Funding for Veterans’ Benefits will increase by $2 M over FY 2014 due to caseload;
- Aid for Local and Regional Libraries was increased by $144 K and $136 K, respectively; and
- Funding for Homeless Student Transportation, Regional School Transportation, Charter School Reimbursements, Chapter 40S “Smart Growth” reimbursements and Tax Reimbursements to Veterans, the Blind and Widows is preserved at FY 2014 levels.
The schedule on the following pages provides the community-by-community allocation of local aid for UGGA as well as Chapter 70 school aid to support K-12 funding for the state’s local school districts.
Patrick Administration Municipal Partnership Accomplishments
Working together, the Patrick Administration and the Commonwealth’s municipalities have achieved meaningful savings and investments.
Municipal Health Care Reform
Signed into law by Governor Patrick in July 2011, municipal health care reform is one of the most beneficial tools afforded to cities and towns in decades, and has achieved substantial savings for communities across Massachusetts that have helped preserve essential local government jobs and services. By including labor unions, municipal health care reform has had a powerful and immediate impact on municipal finances while maintaining quality, affordable health care for working families. Over 260 communities and school districts across the Commonwealth have collectively saved more than $237 M to date in health insurance premiums as a result of the landmark municipal health care reform law. This reform has the potential to produce as much as $2.8 B in cumulative savings over 10 years if implemented by all cities, towns, and school districts in Massachusetts. Forty-nine cities, towns, and school districts with over 45,000 subscribers now get health insurance through the Group Insurance Commission (GIC), the state employee health insurance program.
Governor Patrick also signed legislation in 2011 that required municipalities to transfer eligible retirees into Medicare to save an estimated $15 M to $30 M on retiree health care.
Incenting Community Innovation
The CIC grant program provides incentives and support for innovative regionalization and other cost saving initiatives that will change the way local governments do business. Since the program’s inception in 2012, 197 municipalities, or 56% of all cities and towns in the Commonwealth, have participated in initiatives funded by $6.25 M in CIC grants, providing more comprehensive municipal services with increased efficiency.
The CIC grant program allowed the Patrick Administration to assist the City of Boston in adapting their Citizens Connect Smartphone Application to create the Commonwealth Connect smartphone application for use by municipalities of all sizes all across the state. To date, over 50 municipalities use this innovative tool that allows residents to efficiently report and respond to non-emergency issues such as potholes, damaged signs and graffiti. The Commonwealth Connect app identifies the location of the issue and alerts the city or town of the complaint. Commonwealth Connect empowers residents to be the local government's “eyes and ears,” enhancing civic engagement.
Capital Investments in Our Communities
Through capital investments, the Patrick Administration is committed to partnering with Massachusetts cities and towns to improve road and broadband infrastructure, promote economic growth and make Massachusetts a convenient and attractive place to do business.
Since taking office, Governor Patrick has allocated $1.6 B in capital investments in cities and towns across the state, including: local road and bridge infrastructure, housing, economic development, small-town transportation safety improvements, broadband infrastructure, ports, water infrastructure construction, local libraries, historic preservation and cultural facilities.
The FY 2014–FY 2018 Capital Investment Plan invests an estimated $1.7 B in capital in community development projects and programs, including $381 M in FY 2014 through investments such as:
- Cultural Facilities – Triple the annual funding to $15 M in the Cultural Facilities Fund to support non-profit cultural facilities throughout the Commonwealth.
- Urban Parks – A robust new investment of $10 M in Urban Signature Park projects.
- Climate Preparedness Infrastructure – Investing $10 M in critical coastal infrastructure projects immediately ready for construction.
- Education Facilities – Investing through the Early Education and Out of School Time Capital Fund to improve substandard space that hosts licensed, non-profit early education or out of school programs across the Commonwealth.
- Municipal Libraries – Investing $20 M in grants to local library construction projects around the Commonwealth.
- MassWorks – Providing up to $56.2 M in public infrastructure grants to local cities and towns during the 2014 construction season through MassWorks.
The Patrick Administration has made unprecedented investments in education in order to create opportunity across the Commonwealth and to keep the Massachusetts economy growing. Since taking office, Governor Patrick has increased the K-12 Chapter 70 school aid to cities and towns to the highest levels in the history of the Commonwealth. Maintaining a strong investment in education is a crucial component of the Patrick Administration’s efforts to close the achievement gap and make Massachusetts a national leader in educational achievement. Investments include proposals to expand access to high quality early education for children across the state, from birth through age five, fully fund K-12 education and allow for extended enrichment opportunities and make college more affordable and accessible for high school graduates.
The Green Communities grant program, launched in 2009, works with communities on an array of energy activities: from reducing energy use in municipal and school buildings to establishing power purchase agreements that enable financially attractive renewable energy generation, adopting the latest building codes and other innovative energy projects. To date, the Green Communities program has provided more than $30 M in grants to 123 cities and towns designated “Green Communities.”
Expanded Gaming Law Benefits for Local Governments
The expanded gaming law includes benefits and revenue protections 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 created 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.
Expansion of the Property Tax Base
Governor Patrick signed legislation eliminating the tax exemption on telephone poles and wires, generating an estimated $26 M in new property tax revenues annually for cities and towns across Massachusetts.
Local Option Revenues
Governor Patrick proposed and signed into law a local option meals tax (0.75%) and option to increase local room occupancy tax (to 6%) to give communities new revenue tools to balance their budgets. These options raised over $310 M in new revenues for the 181 municipalities that adopted the local option meals tax since it went into effect October 2009, and over $185 M for the 98 municipalities that adopted the local option rooms tax increase since October 2009.
Information Technology Initiatives
The Patrick Administration provides state support for municipal information technology (IT) challenges by partnering with local governments in addressing various local government IT challenges, by leveraging existing state resources needed by communities, as well as sharing expertise. The Administration also instituted a municipal IT liaison and a state-local IT steering committee. New MassGIS municipal planning and mapping services and online tools for municipalities give cities and towns increased functionality and eliminate the burden on them to purchase and manage their own GIS systems.
The Patrick Administration provided relief from library “maintenance of effort” requirements and decertification rules to help keep local libraries open during the fiscal crisis.
Governor Patrick proposed and signed into law tools allowing enhanced flexibility and improved processes in municipal finance, including increased borrowing flexibility, allowing regional school districts greater access to stabilization funds, extending municipal lease term limits, eliminating fees for the State House Notes borrowing program, streamlining the process by which assessors can grant abatements, and providing procedures for municipalities to enforce fines imposed for violations of housing, sanitary, or municipal snow and ice removal requirements.
Municipal Grant Finder
Local officials and residents can now identify state resources to support local services, without needing to search state agency by state agency. This new one-stop listing of all state grant programs for municipalities, with links to agency web pages with specific grant information, is available at: www.mass.gov/anf/municipalgrants.
Municipal Performance Management
The Patrick Administration has implemented a performance management, accountability and transparency program for local governments, similar to the state-level program. The Municipal Performance Management Program is proving to be a game-changer for local governments, producing increased efficiencies, cost savings and increased revenue. In 2014, the program will expand to include as many as 45 municipalities.
The Patrick Administration created the Municipal Affairs Coordinating Cabinet, which held 37 regional listening sessions across the Commonwealth with municipal leaders and the Edward J. Collins Center for Public Management at UMASS-Boston, providing an array of services and independent analysis for local government.
Governor Patrick signed legislation to make the pension system more sustainable and creditable for the long-term to generate an estimated $2 B in pension funding savings over 30 years for cities and towns, moved under-performing local pension systems to the state system and gave municipalities the authority to extend their funding schedules, worth up to $200 M in budget relief in the first year alone.
The Patrick Administration has taken steps to assist municipalities with procurement, including:
- Proposing tools for reforming municipal procurement and advertising requirements, providing savings and efficiencies;
- Increasing thresholds for municipal procurements and construction payment bonds;
- Providing for the use of reverse auctions to provide a method of acquiring best pricing from qualified bidders while providing environmental and financial benefits, and allowing for greater flexibility for municipalities and bidders;
- Proposing internet advertising of procurements, which could provide savings to municipalities of $250,000 per year statewide; and
- Providing municipal purchasing assistance through statewide contracts which specifically assist municipalities by achieving aggregated savings on large procurements, eliminating the need for individual bidding processes, and providing long-term, competitive contracts never before managed on a statewide level.
The Patrick Administration advocated for and won $71 M in federal American Recovery and Reinvestment Act (stimulus) funding for local police and fire departments. Through the state’s 911 Grant Program, 21 cities and towns now collaborate in joint public safety answering points (PSAPs) and dispatch, with four new regional PSAPs involving 14 cities and towns.
Governor Patrick proposed and signed into law tools to encourage and facilitate regionalization of municipal services including elimination of the collective bargaining requirement for joining a regional entity, expanded collective purchasing opportunities, mutual aid agreements, shared superintendents, shared public health services and joint assessing services. The Administration created the Regionalization Advisory Commission, which examined opportunities for communities to achieve cost savings, efficiencies and improve services and led to CIC Grant program.
Retiree Healthcare (OPEB)
Governor Patrick proposed legislation to reform the structure of state and local retiree healthcare benefits (OPEB) to ensure that providing contributions to retiree healthcare coverage will be sustainable for the future. This reform will save local governments as much as $12 B over 30 years while maintaining the state’s commitment to high quality health care for employees and retirees.
Municipal Unemployment Insurance Reform
Governor Patrick filed legislation to close loopholes to Municipal Unemployment Insurance (UI) and create a fair and collaborative system that provides economic relief for both municipalities and local government employees.
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