Governor Deval Patrick's Budget Recommendation - House 2 Fiscal Year 2013

Governor's Budget Recommendation FY 2013

Local Aid Overview


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. 

Budgeted Local Aid

The Governor’s FY 2013 budget recommendation supports a total of $5.2 B in local school aid, general government aid and program-specific aid.  This represents an increase in total funding support to the commonwealth’s cities and towns from the original FY 2012 budget of $152 M (3%).  Local aid is categorized as 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:

Funding for Local Aid Cherry Sheet Accounts
  Account Name FY12 Budgeted Amount FY13 Budget Recommendation
Section 3 Aid Chapter 70 Education Aid 3,990,812,680 4,136,391,547
Unrestricted General Government Aid 833,980,293* 833,980,293
Cherry Sheet Aid Tax Reimbursement for Vets, Blind, Widows 25,301,475 25,436,475
State Owned Land 26,270,000 26,270,000
Veterans' Benefits 38,980,045 45,889,480
Regional Library Local Aid 9,131,475 9,131,475
Municipal Libraries Local Aid 6,823,657 6,823,657
Local Share Racing Tax 1,150,000 1,150,000
Regional School Transportation 43,521,000 43,521,000
School Food Services Program 5,426,986 5,426,986
Charter School Reimbursement 71,554,914 71,454,914
TOTAL 5,052,952,525 5,205,475,827
% Change from Prior year   3.0%

 

*A separate provision of the FY 2012 budget provided for $65 M of FY 2011 surplus funds to be allocated as unrestricted general government aid in addition to this amount.  A similar provision providing for up to $65 M of FY 2012 surplus to be allocated as unrestricted local aid to cities and towns if a sufficient surplus exists after making certain other transfers is also included in the FY 2013 budget.

Section 3 of the Commonwealth’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. 

Protecting Education Reform

One of Governor Patrick’s four priorities is closing the achievement gap in our schools, and the FY 2013 budget reflects strong support for education programs.  The FY 2013 Chapter 70 funding is $4.136 B, a $145 M increase, to support our school districts.  This level of Chapter 70 funding will fully fund all foundation budgets and ensure that each school district receives at least the same amount of funding that it received in FY 2012.  The Chapter 70 formula is based on many variables including, enrollment, grade levels, municipal revenue growth factors (MRGFs), a federal inflation index, and more.  All of these variables, among other factors, impact the Chapter 70 aid calculation for each individual school district. 

In addition to this $4.136 B, 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. 

Unrestricted General Government Aid

Unrestricted General Government Aid (UGGA) will be funded at $833.9 M, the same funding level provided for in the FY 2012 budget.  Similar to a separate provision in the FY 2012 budget, the FY 2013 budget proposal includes a provision that provides for an additional $65 M in local aid payments to be made should sufficient surplus funds be available from FY 2012. 

Initiatives for Fiscal Year 2013

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.  The Administration’s approach to FY 2013 also includes additional tools to support municipalities in managing through this fiscal crisis and beyond.

  • 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.
  • Veterans’ homeless shelter reimbursement increase of $872,000 over FY 2012 spending, as the Department of Veteran Services 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. 
  • Caseload-driven increases to Veterans’ Benefits and Tax Reimbursements to Veterans, the Blind and Widows.
  • Level funding of State Owned Land (PILOT), Regional School Transportation and Library Aid.
  • 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 University of Massachusetts Boston. 
  • The Group Insurance Commission (GIC) will offer two 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 the sharing 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.

The schedule on these pages provides the community-by-community allocation of local aid for unrestricted general government aid as well as Chapter 70 school aid to support K-12 funding for the state’s local school districts.


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