Mass. cities and towns say proposed approach to local aid 'won't cut it'

In each of his eight years as governor, Charlie Baker kept a campaign promise to propose increasing unrestricted local aid to cities and towns by the projected rate of growth in state tax revenues.

Now, with a somewhat muted forecast for tax collections ahead of Gov. Maura Healey's first budget proposal, leaders from cities and towns told the new administration a similar increase in municipal support "won't cut it."

The outlook for unrestricted general government aid, or UGGA, was one of the top issues municipal officials flagged Tuesday at the first Local Government Advisory Commission meeting during Healey's tenure, alongside a jump in special education costs and school-related burdens.

With Healey's fiscal year 2024 state budget due by March 1, a string of city and town officials briefed Lt. Gov. Kim Driscoll and Administration and Finance Secretary Matt Gorzkowicz on financial pressure points they face and their hope that the new team will make additional state dollars available.

Revere Mayor Brian Arrigo urged the administration to decouple unrestricted local aid from the projected 1.6% growth rate of state tax revenues that top lawmakers and the Healey administration expect in the next fiscal year.

"Unrestricted general government aid — UGGA, as we all know it and love it — has historically been tied to the projected increase in tax collections, and the predictability of that is really helpful for us in budgeting," Arrigo said. "But secretary, you mentioned a 1.6% increase in the consensus revenue forecast. We all know that won't cut it for us on a local level."

Last year, Baker proposed increasing unrestricted local government aid at the same 2.7% rate as the forecasted growth in state tax revenue, but he and lawmakers eventually agreed to a Senate push to double the UGGA increase to 5.4%.

Arrigo recounted that history Tuesday, saying the original 2.7% increase "wasn't adequate for the rising costs that we were seeing."

"Hopefully, that tactic can continue," he said of decoupling local aid growth from state tax revenue growth.

Decoupling from state revenue projections could lead to larger amounts of aid, or lower ones depending on the fiscal state of affairs during the annual state budget cycle.

Another issue the Revere mayor flagged is a sharp increase in local special education costs.

In fiscal 2024, the tuition that districts must pay to private special education providers for services is set to increase 14% under rates the Operational Services Division announced late last year.

That sharp jump will keep those private schools funded at existing levels, but with added burden shifted onto districts, once money runs out from a 19-month, $220 million grant program the Baker administration launched in 2021 to address acute staffing shortages.

Under the higher rates, Revere's costs will increase $2.1 million for services provided to the same number of students, Arrigo said, calling it "an incredible increase." Danvers Town Manager Steve Bartha said he similarly expects his community to face $500,000 more in out-of-district special education costs.

Bartha said that added burden lands in the third straight year in which Danvers schools have seen an increase in demand for out-of-district special education services.

"Coming out of the pandemic, I think we and a lot of towns and cities have seen different, new, more acute needs. These services are important, but to try to accommodate this increase while also managing the other costs related is really kind of a one-two hit," he said. "We don't argue the need for these services, we think they're important, but I think we're grappling with an issue that is bigger than it's ever been before, so we're faced with the immediate need to try to resolve the hole that's in our current budgets."

Bartha suggested the Healey administration create a "pothole account to address the estimated $92 million of funding needed for fiscal 2024" and boost the share of special education services funded by the state.

Last month, Healey said she would support the special education circuit breaker program, which reimburses districts for a share of their special education costs, to "help maintain funding" for localities.

Several other education cost burdens were on the minds of local officials during Tuesday's meeting, including rural school aid and transportation reimbursement.

Healey announced last month she intends to fully fund the 2019 K-12 education funding reform law known as the Student Opportunity Act, which Driscoll on Tuesday described as "a $600 million commitment."

It's not yet clear whether the Healey administration will fulfill the other requests municipal leaders made. Gorzkowicz said Tuesday that local aid decisions are "still a bit fluid."

"They are things that we have on our radar, and we're doing our very best to be responsive to those needs," Gorzkowicz said of the pitches. "Our commitment to fully fund the Student Opportunity Act is a significant one in terms of year-over-year increases. To then be able to do as much as we can in some of these other areas is, you know, challenging, but something that we're interested in trying to do more."

At least one priority the LGAC described has already been targeted over the short term by the new governor: keeping a universal school meals program in place. Stacey Rizzo, a member of the Revere School Committee and president of the Massachusetts Association of School Committees, called fully funding free meals for all K-12 students "our first priority."

The federal government launched a universal school meals program during the COVID-19 pandemic, and state lawmakers included $110 million in the fiscal 2023 budget to keep it in place after federal dollars expired. However, the program is set to run out of money in March.

Healey filed legislation on Jan. 30 that, alongside investments in emergency shelter and Supplemental Nutrition Assistance Program (SNAP) benefits, would inject $65 million to keep the universal school meals program running through the end of the year.

Driscoll said the administration is "hopeful that our partners in the Legislature will understand and see those as priorities as well."


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