The annual budget proposal Gov. Charlie Baker plans to file next week will call for a general local aid increase of $37.2 million over this year, and an almost $119 million hike in education aid to cities and towns.
Baker disclosed the first details of his local aid plan at the annual meeting of the Massachusetts Municipal Association at the Hynes Convention Center, drawing applause from the crowd of mayors, selectmen and town administrators.
Legislative and administration budget writers agreed earlier this month that they expect state tax revenues to rise by 3.5 percent, and Baker said the increase in unrestricted local aid -- which would bring the total to about $1.1 billion in fiscal 2019 -- will match that growth.
Unrestricted aid and K-12 school aid are the largest sources of state aid to cities and towns and supplement property taxes to provide funding for local government services, including public safety, education, and other services.
The legislature could increase Baker's proposed local aid spending recommendations in the coming months, but lawmakers are unlikely to reduce them.
When Baker and Lt. Gov. Karyn Polito were running for office, they pledged to match local aid increases to the growth in state tax collections.
Now seeking reelection, Baker told the municipal officials that he and Polito had "not only lived up to that over the past few years, but we've exceeded it" by not pushing down local aid numbers when revenue estimates faltered.
At the beginning of the fiscal 2018 budget-building process, budget writers projected a 3.9 percent growth in state tax revenue, but after revenue expectations were revised downward, the $39.4 billion budget Baker ultimately signed increased overall state spending by 1.7 percent.
"We did not come back to the cities and towns, because you built your budgets, you made decisions and we made commitments to you based on that," he said. "I know historically many administrations before us, when the shoe got kind of tight, would constantly go back to cities and towns looking for more money. We never did that."
Unrestricted local aid levels have risen in proportion with annual tax collection growth projections, although K-12 school aid increases have not.
According to Baker's office, the newly proposed $118.6 million increase in education money -- which will bump the total to $4.865 billion -- includes $103.6 million in Chapter 70 schools aid and $15 million in additional aid for school districts that have seen an influx of students from Puerto Rico and the U.S. Virgin Islands after last year's hurricanes.
As of Jan. 5, 2,400 students who evacuated Puerto Rico had enrolled in Massachusetts K-12 schools, according to the Department of Elementary and Secondary Education. About 85 percent of those students are attending schools in 12 districts: Boston, Chicopee, Fall River, Fitchburg, Holyoke, Lawrence, Leominster, Lowell, New Bedford, Southbridge, Springfield and Worcester.
"The number's significant enough that we felt it was important the commonwealth step up," Baker said after his speech. "This wasn't something that anybody built into their budgets at the beginning of the year, and we felt it should be incumbent on us to basically step up and fund them, the same way we would under a traditional Chapter 70 education distribution."
The new Chapter 70 money includes $24.3 million toward addressing rising costs of health care for retirees, the governor's office said. Baker called it a "significant investment" and noted that it responds to a recommendation made by a commission that studied the state's school funding system.
The Foundation Budget Review Commission issued a report in November 2015 saying the current school funding formula underestimates the cost of education by $1 billion to $2 billion per year, driven largely by health care and special education costs.
Baker's fiscal 2019 budget proposal, which is expected to exceed $40 billion, is due by next Wednesday, the day after he plans to give his state of the state address where he may outline other spending initiatives. House and Senate lawmakers will work up their own versions before the new fiscal year begins in July.
This year's budget allocated $1.06 billion for general local aid, an increase of $39.9 million over fiscal 2017 levels, according to the Massachusetts Budget and Policy Center. Chapter 70 school aid totaled $4.75 billion, a boost of $118.9 million or 2.6 percent from the previous year, according to MassBudget.
The state budget also funds accounts that reimburse school districts for the costs of educating students with disabilities and for students who leave the district for charter schools.
Baker declined to say if he would include increases to the charter school and special education reimbursement funds in his fiscal 2019. "I'm going to put that one off 'til we put out the budget," he said.
This report was originally published by State House News Service.
