State Aid
Post date: Jul 31, 2020 1:41:1 PM
Of course, 1 day after Finance Committee approves the revised budget, the state announces intention to not reduce state aid. Luckily, I only anticipated about a $100,000 loss for this year. To that end, I see no need to revise everything again. If this actually occurs, then we'll have some additional free cash at the end of the fiscal year. I expect that the magnitude of impact will spread across more than one fiscal year. While I hope the state may be able to maintain the same level of aid again next year, that may not be possible.
STATE LEADERS ANNOUNCE LEVEL FUNDING FOR MAJOR LOCAL AID ACCOUNTS
FY21 UGGA TO BE LEVEL FUNDED AT FY20 AMOUNTS
FY21 CHAPTER 70 SCHOOL AID AT LEAST LEVEL FUNDED FOR ALL
July 30, 2020
After months of uncertainty regarding the size of the state’s fiscal crisis, state leaders today announced a framework for protecting the two main sources of local aid in the state’s fiscal 2021 state budget. According to a statement issued by A&F Secretary Michael Heffernan, the Governor and Legislature are committing to no less than level funding of Unrestricted General Government Aid and Chapter 70 education aid as the baseline amount for fiscal 2021 funding for each community.
Because of the difficulty in projecting tax collections, unanswered questions about whether the federal government will provide fiscal relief, and the unknown impact that the coronavirus will have this fall, the Legislature has enacted a bill to continue with a temporary budget through October 31. The state had previously adopted a one-twelfth budget through July, and has added a 3-month extension. This will give lawmakers and the Administration more time to gather information and shape their budget plans.
Knowing that local officials need firm information on local aid and school funding in order to finalize their municipal budgets, the state’s top leaders have joined together to provide guidance to cities and towns, and the news is good for communities.
In an alert issued via the Division of Local Services, the Baker-Polito Administration announced that House and Senate leaders and the Governor would be protecting the two major local aid accounts, UGGA and Chapter 70, from cuts as they set the state’s fiscal 2021 budget later this fall.
They announced that the $1.13 billion Unrestricted General Government Aid (UGGA) program will be level funded at fiscal 2020 amounts for all communities, and that all cities and towns will receive at least level funding of their Chapter 70 education aid. Some school districts will receive school aid increases due to inflation and enrollment under the current formula. In total, Chapter 70 school aid will increase by $107 million, bringing that account up to $5.28 billion.
Local officials with questions about the numbers can email DLS at databank@state.ma.us.
The Governor-House-Senate framework closely matches the MMA’s request to state leaders, which the association delivered earlier this week. MMA has asked state leaders to protect local aid from cuts by preserving aid at fiscal 2020 levels at a minimum.
Please click here to read MMA’s July 27 letter to state leaders.
MMA immediately applauded the local aid framework, issuing the following statement:
“This is very welcome news for cities and towns in every corner of Massachusetts. With the state facing a budget shortfall of between $6 billion to $8 billion due to the COVID-19 recession, local leaders have been very concerned about the potential impact on local aid. Today, the Governor, House and Senate have demonstrated that the state-local relationship is a true partnership.
“By protecting local aid during this crisis, the state will maintain vital financial support for cities and towns. With this key financial guidance, communities can finalize their fiscal 2021 budgets, allowing them to continue their work fighting the coronavirus pandemic and delivering the essential quality-of-life services that drive our economy. This framework will benefit every resident and business in the Commonwealth, and we are deeply grateful to Governor Baker and Lt. Governor Polito, Speaker DeLeo, President Spilka, House and Senate Budget Chairs Michlewitz and Rodrigues, and their colleagues in the Legislature.”