New budget holds local aid steady, boosts school funding
It’s no windfall, but the new state budget brings good news for town and city leaders when it comes to funding for local services and schools.
The budget that Gov. Deval Patrick signed July 8 includes $899 million in unrestricted general government aid, the most basic form of state funding for local governments.
Patrick originally proposed $834 million, plus another $65 million later if enough money was left in state coffers at the end of last fiscal year. The final budget lawmakers passed guarantees the total $899 million up front – a key change sought by municipal leaders.
The spending plan also includes $4.2 billion in Chapter 70 school aid, another crucial source of funding for town and city budgets. That is up from about $4 billion last fiscal year and $35 million more than Patrick initially proposed.
Overall, the budget puts communities “on a much more solid fiscal footing than they thought they had in January,” said Geoff Beckwith, executive director of the Massachusetts Municipal Association, referring to Patrick’s budget proposal last winter.
“Communities are not out of the fiscal woods yet, by any means,” Beckwith said. “But the Legislature’s increases certainly help significantly.”
The economic downturn took a toll on revenues towns and cities use to fund police, libraries, fire departments and other town and city services. The new, $32.5 billion state budget holds general government aid level compared to last year.
But that aid remains 37 percent below pre-recession levels after adjusting for inflation, according to an analysis by the Massachusetts Budget and Policy Center.
In raw dollars, general government aid this year is about 31.5 percent, or $415 million, below the fiscal 2009 budget, according to state figures.
Aid also is down when compared with fiscal 2001, when a phased-in cut in the state income tax went into effect, said Noah Berger, president of the research group, which is funded in part by foundations, unions and health care nonprofits.
“This one year was somewhat of a reprieve,” Berger said. “Over the long term, there’s been a dramatic reduction in local aid.”
Chapter 70 school aid has fared better. The state is now providing about $222 million more of it this year than it did four years ago.
The fiscal 2013 budget is expected to deliver an additional $40 per student for most school districts.
Other key sources of education funding saw increases in this year’s budget, too:
- The special education circuit breaker program, which reimburses school districts for unusually expensive special needs services, is funded at $241.9 million, up from $213.1 million last year. This is expected to boost the percentage of costs that districts can recoup.
- For the first time would provide $11.3 million to reimburse towns and cities for the cost of transporting homeless students temporarily living in one district back to their home schools. State Auditor Suzanne Bump earlier this year called this cost a prohibited, unfunded mandate on school districts.
- Regional school districts would see an additional $2 million for transportation, up from $43.5 million last fiscal year.
Along with a municipal health care reform law estimated to have saved towns and cities $175 million so far, municipalities are starting to see real fiscal progress, Beckwith said.
“Communities are still relying (more) on the property tax and they’ve cut back on services, but this budget is very strong compared with the budgets of the last several years,” he said.
(David Riley can be reached at 508-626-4424 or firstname.lastname@example.org.)