Press Release: 4/1/2025

MMA outlines budget pressures at local aid hearing

 

MMA Executive Director Adam Chapdelaine, left, MMA Vice President and Amesbury Mayor Kassandra Gove, center, and Denise Dembkoski, Stow town administrator and president of Small Town Administrators of Massachusetts, testify during a joint hearing held by the House and Senate Ways and Means committees on March 24 at UMass Amherst.

At a legislative budget hearing on education funding and local aid on March 24, the MMA and local officials called for the Legislature to support an increase of at least 3% for discretionary municipal aid in fiscal 2026 and to increase the Chapter 70 minimum new aid amount to address rising school costs.

MMA Executive Director Adam Chapdelaine was joined on the municipal panel by MMA Vice President and Amesbury Mayor Kassandra Gove and Stow Town Administrator Denise Dembkoski, who’s also president of Small Town Administrators of Massachusetts.

Chapdelaine expressed gratitude to the Legislature for its commitment to local aid.

“In recent years, the Legislature made the critically important and deliberate decision to increase [Unrestricted General Government Aid] above the percentage increase in forecasted state revenue growth. This reflected an understanding of the many challenges cities and towns faced, while providing an essential investment by the Commonwealth that directly supports each and every community in Massachusetts.

“Being mindful of the state’s cautious fiscal outlook for 2026, we respectfully ask for your consideration of an UGGA increase of at least 3%, at a cost of $10.4 million above the governor’s House 1 proposal.”

Education funding

Chapdelaine recognized the importance of investments the Legislature has made in K-12 education funding through the state’s Chapter 70 program, but explained that cost pressures continue to strain municipal budgets.

“Many of you may be wondering, how is it possible that the Legislature has made such significant increases to Chapter 70 through the [Student Opportunity Act] in recent years, but you’re still hearing from local officials that they are facing seismic budget challenges,” Chapdelaine said. “In fact, both things are true.

“The SOA is a massively needed and positive investment in K-12 education. The SOA commitment exponentially grew the state’s ‘foundation budget,’ of which the state pays 41% each year and cities and towns are collectively responsible for 59%. So as the ‘foundation budget pie’ grows much, much larger with further SOA investments, so do the required contributions from municipalities.

“Under normal circumstances, this might have caused some strain for municipalities to reach these new spending levels. But this strain has been compounded by multiple pressures on local budgets that are beyond their control: a pandemic that has had long-lasting effects on student learning, prompting the need for additional educators to help students catch up on the basics of reading and math. Special education costs that have increased 37% in the past four years. Inflationary pressures all across spending. School transportation increases. New demands for employee pay and benefits increases. Charter school tuition. The list goes on.

“Municipalities must now stretch to reach these new levels of education spending, while working within the confines of Proposition 2½. The math just isn’t working. Between fiscal years 2007 and 2021, required local contributions increased by $1.8 billion [over 14 years]. In the past four fiscal years, that number is $1.1 billion.

“With Proposition 2½ limiting cities’ and towns’ major source of revenue — property taxes — to a total increase of just 2.5% over the previous year, municipalities are using almost all, or all, of their new revenue each year to meet their school spending requirements. Unfortunately, it means that every other municipal department remains flat or must experience cuts to create a balanced budget.”

Chapdelaine urged the Legislature to continue to make investments in Chapter 70 minimum new aid, which provides some relief to school districts without exacerbating the strain on municipal budgets. The MMA is asking the Legislature to increase Chapter 70 minimum aid for fiscal 2026 to $150 per pupil, which would cost an additional $39.5 million over the governor’s budget recommendation.

Local perspective

Mayor Gove addressed the budget pressures she’s facing in her city.

“Under [the governor’s budget] proposal, Amesbury would receive an increase to UGGA of $57,000, an increase to Chapter 70 aid of $144,000, for a total increase of $201,000. But, as an example, the amount we will be required to pay for students to attend charter schools this year will increase by $238,000, basically wiping out our increases in those two major state aid accounts.”

Gove stressed the need for early clarity for the two major local aid accounts: UGGA and Chapter 70.

“Early numbers would provide critical certainty to our budget planning at the local level,” she said. “It is our hope that you will strongly consider an early agreement on these two local aid accounts.”

While addressing local budget challenges, Dembkoski highlighted the importance of supplementary local road and bridge funding, as included in the fiscal 2024 and 2025 state budgets, and asked legislators to again leverage Fair Share surtax revenue for this purpose.

“We want to thank you for making local roads and bridges a priority for surtax revenue, and we hope you will continue to build on that this year,” she said. “There are more than 30,000 miles of roads under municipal control, which represents nearly 90% of all road miles statewide. This funding is put to use immediately by cities and towns to repair crumbling local roads, advance critically needed projects, and improve safety on our neighborhood roadways.

“Given the loss of purchasing power of existing sources of funding and other local budget pressures, we respectfully request at least $125 million of surtax funding for this incredibly important program for fiscal 2026. This provides fundamental support for core municipal infrastructure and will benefit every city and town in the Commonwealth.”

The MMA also submitted written testimony outlining additional municipal priorities for the fiscal 2026 state budget.

Budget process

The House and Senate Ways and Means committees have been jointly holding a series of hearings in March and early April on various areas of the state budget.

The House is expected to draft and debate its budget bill in April, with the Senate deliberating its own bill in May. The Legislature will work to get a final budget bill to the governor by the beginning of the fiscal year on July 1.

Written by Jackie Lavender Bird, MMA Deputy Legislative Director