Commonwealth of Massachusetts
The Governor's Budget Recommendation

Local Aid

	FY96	FY97
Cherry Sheet Aid	Estimated	Recommended
(000s Omitted)	Spending	Spending

Treasurer*	956,799	1,001,229
Municipal Services and Abatements	21,413	21,413
Veterans' Services	10,400	10,400
Libraries	19,906	19,906
Education	2,114,077	2,321,066
Public Safety	13,854	15,682
Gas Tax	43,472	43,472

Total:	3,179,920	3,433,168

*Includes $484.2 million in unappropriated lottery funds for Fiscal Year 1997 and $442.6 million in unappropriated lottery funds for Fiscal Year 1996

Fiscal Year 1997 Cherry Sheet Overview

The Division of Municipal Services, within the Department of Revenue, annually notifies cities and towns of the aid and assessments the state will make to cities, towns, and regional school districts in the upcoming fiscal year. Originally, these notifications were printed on cherry-colored paper, and therefore were given the name "cherry sheets". In Fiscal Year 1997, cherry sheet appropriations will total $3.4 billion, providing cities and towns with a direct local aid increase of $253.2 million, 7.9% over Fiscal Year 1996 levels. Since Fiscal Year 1992, total cherry sheet appropriations have increased by $1.1 billion, or 49%. The Fiscal Year 1997 budgetary recommendation represents the highest cherry sheet recommended appropriation levels to date. Lottery proceeds distribution will increase by $41.6 million, meeting the Weld/Cellucci Administration's commitment to phase out the lottery cap. This increase will be distributed to cities and towns through the lottery formula. If State Lottery Fund revenue growth exceeds current projections, that additional increase will also be distributed to cities and towns through the lottery formula. Chapter 70 Education Reform Aid will increase by $209.1 million, continuing the Weld/Cellucci Administration's commitment to fully fund Education Reform as that initiative begins its fourth year.

CHERRY SHEET PROGRAMS

The state aid distributed through the cherry sheets is comprised of several programs, administered by a variety of state agencies. These programs and their Fiscal Year 1997 funding levels are described below.

Treasurer and Receiver-General

In Fiscal Year 1997, additional assistance, payments-in-lieu of taxes for state-owned land, and the local share of the racing tax are funded at Fiscal Year 1996 levels. Lottery proceeds distributed directly through the lottery formula are increasing by $41.6 million, as the phase-out of the Commonwealth's share of lottery revenue continues.

Municipal Assistance

The Division of Municipal Services administers the Federally-Aided Urban Renewal, State Urban Renewal, and Urban Revitalization and Development Grant programs. Through these programs, cities and towns are reimbursed for a portion of the costs related to urban renewal projects targeted at redeveloping downtowns, neighborhoods, industrial parks, and commercial areas; technical assistance is provided to municipalities, organizations, and local businesses; low and moderate income housing units are rehabilitated; and local businesses are provided with financial assistance. The Commonwealth also provides reimbursements to cities and towns for tax exemptions granted to qualifying veterans, blind persons, surviving spouses, and elderly persons. Fiscal Year 1997 funding will ensure that these reimbursements and service levels will continue at Fiscal Year 1996 levels.

Veterans' Services

The Office of Veterans' Services, within the Executive Office for Administration and Finance, administers veterans' benefits programs, reimbursing cities and towns for 75% of the costs of benefits for veterans and their dependents. These benefits include allowances for food, clothing, shelter, heat, medical assistance, and burial expenses. Fiscal Year 1997 funding levels will ensure that service levels can continue at Fiscal Year 1996 service levels.

Board of Library Commissioners

The Board of Library Commissioners oversees two cherry sheet programs: aid to local public libraries and aid to regional public libraries. The state aid distributed through these two programs assists municipalities in providing free library services and helps to defray the costs of providing regional public library services. With this aid, regional libraries are able to provide support services to municipal libraries, including interlibrary loans, research and reference searches, and the delivery of materials between libraries. The Fiscal Year 1997 funding level for libraries is equal to the Fiscal Year 1996 funding level.

Education

The cherry sheet contains aid for several education programs. Direct financial assistance in the form of Chapter 70 Education Reform payments distributed through the Education Reform formula will increase by $209.1 million in Fiscal Year 1997. School Building Assistance reimbursements, which provide municipalities and regional school districts with financial assistance for the planning and construction of school buildings, will increase by $11.6 million in Fiscal Year 1997. In addition, reimbursements for pupil transportation to regional schools will be increased by $2 million in Fiscal Year 1997.

Public Safety

The Executive Office of Public Safety administers the police career incentives program. Through the police career incentive program, the state reimburses 50% of the costs of cities and towns providing career incentive education programs to police officers through salary increases. In Fiscal Year 1997, the funding level for this program will increase by $1.8 million over the Fiscal Year 1996 funding level.

Transportation and Construction

To reimburse municipalities for costs incurred in the construction, maintenance, and policing of local streets and roads, the Commonwealth distributes Highway Fund monies (funded through the motor vehicle fuels excise tax) to the 351 cities and towns in Massachusetts. In Fiscal Year 1997, Highway Fund distributions will equal $43.5 million, the same as Fiscal Year 1996 distributions.

NON-CHERRY SHEET LOCAL AID

The Weld/Cellucci Administration pursues a comprehensive local aid policy to ensure the fiscal autonomy and stability of each of the Commonwealth's cities and towns. To that end, a number of local aid programs that provide either programmatic assistance or direct monetary aid to cities and towns are administered by agencies throughout state government. In Fiscal Year 1997, the Administration is increasing its commitment to local aid by increasing funding for education, public safety, and water and sewer rate relief. Education Reform funding, above and beyond Chapter 70 aid, will increase by over $34.9 million. In Fiscal Year 1997, the state's Board of Education and Training, through the Office of Education and Training, will distribute a $65.7 million block grant to cities, towns, school districts, charter schools, and regional school districts for after-school programs, safe schools, school-linked services, charter schools, high achievement, drop-out prevention, and time and learning programs, among others.

In addition, as part of the Weld/Cellucci commitment to strengthening public safety in the Commonwealth, the Administration recommends $12.16 million in Community Policing initiatives, to help defray the costs of safeguarding our communities.

The third substantially increased component of non-cherry sheet aid is rate relief. In Fiscal Year 1994, Fiscal Year 1995, and Fiscal Year 1996, MWRA rate payers benefited from a total of $90 million of rate relief that served to reduce rate increases in MWRA communities. In Fiscal Year 1997, that aid will be continued through an appropriation of $47 million targeted for MWRA rate relief, a total increase of more than $7 million over Fiscal Year 1996 levels. In addition, funding for water pollution abatement projects financed through the State Revolving Fund (SRF) will increase by $6 million over Fiscal Year 1996 levels.

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