Press Release

HOUSE AND SENATE REACH ACCORD ON LOCAL AID

     

$5.26 Billion Budgeted; Cities and Towns Held Harmless Despite Revenue Shortfall

BOSTON—Senate President Therese Murray (D-Plymouth) and House Speaker Salvatore F. DiMasi (D-Boston) today announced that the House and Senate’s top budget writers have agreed to increase state aid to cities and towns in the FY09 budget by $223 million, a 4.43 percent hike over last year, in the three major categories of local aid – Chapter 70 funding for public schools, lottery aid and additional assistance. 

Passage of a local aid resolution nearly four months before the start of the fiscal year will help cities and towns craft local budgets with greater confidence and accuracy.

“This resolution gives our cities and towns the answers they need to navigate through these fiscally challenging times,” President Murray said. “The upcoming fiscal year will be marked by difficult choices and competing priorities. This resolution underscores our commitment to our schools and each and every community across the Commonwealth.”

“Cities and towns need our help and, once again, the Legislature is increasing the two most critical needs of municipalities – schools and local aid,” Speaker DiMasi said. “While this difficult budget year demands cuts, efficiencies and wise spending throughout state government, I am pleased that this agreement ensures every community in the Commonwealth will see an increase in local aid based on dependable forms of revenue.”

Senator Steven C. Panagiotakos, Chairman of the Senate Committee on Ways & Means said, “The legislature has consistently made local aid a top priority and continues to do so despite the challenging fiscal times we are facing.  This early local aide resolution will provide cities and towns with the certainty they need to plan local budgets.”

“Even in these times of fiscal difficulty and uncertainty, our resolve to help cities and towns has never been stronger.  We demonstrate that local aid is a top priority year after year by giving municipalities billions of state dollars to help pay for basic local services, and we continue that policy today,” said Representative Robert A. DeLeo, chairman of the House Committee on Ways and Means.

The resolution guarantees cities and towns will receive $935 million in unrestricted local aid, $811 million of which is generated by the Massachusetts Lottery and $124 million of which is allocated from the Commonwealth’s General Fund.  Since the Lottery was “uncapped” by the Legislature in Fiscal Year 2007, all revenue other than prize money and a small amount for administration goes to municipalities.

In FY09, however, only $811 million is projected to be generated—$124 million less than was allocated last year.  The Legislature’s budget will ensure the additional $124 million is distributed and that cities and towns are held harmless to last year’s allotment.

The local aid resolution also maintains a commitment made by the Legislature three years ago by increasing Chapter 70 allocations by $223 million to $3.95 billion.  The increase comes as part of a five year plan to move individual school districts toward their target-aid contribution level.  Under the Legislature’s plan, each school district would see an increase in Chapter 70 funding over last year..