Governor’s FY13 Budget Proposal to Include $5.2 Billion in Local Aid

The following is a press release from the office of Governor Deval Patrick:

Delivering last week's keynote address at the 33rd Massachusetts Municipal Association’s annual meeting, Lieutenant Governor Timothy Murray announced more than $5.2 billion in state funding to cities and towns, including an $145 million increase in K-12 Chapter 70 education aid – the highest level in history – which will be included in the Patrick-Murray Administration’s Fiscal Year 2013 budget proposal. 

“Massachusetts is leading the nation out of the global economic recession thanks to our targeted investments and strong partnerships with cities and towns,” said Murray. “Governor Patrick and I are proud to support our municipal partners with these investments in local aid and education, which continue to provide municipalities with tools needed to improve the delivery and efficiency of local services and help cities and towns thrive into the future.”

The Administration's FY 2013 budget proposal will fund local aid at more than $5.2 billion. That funding will include $4.1 billion in K-12 Chapter 70 education aid, marking the highest level of investment in education in the Commonwealth’s history. Local aid represents approximately 16 percent of the annual state budget, which will be filed by Governor Deval Patrick this week.

The increase in K-12 Chapter 70 aid will fully fund all school districts at foundation levels and ensure that all school districts will receive equal or greater funding than in FY 2012. The Administration said maintaining a strong investment in education is a crucial component in closing the achievement gap and to make Massachusetts a national leader in educational achievement.

Reducing Health Care Costs:

Lieutenant Governor Murray announced more than $60 million in savings have already been achieved by communities as a result of the landmark municipal health reform passed last year. To date, more than 50 communities have taken steps to address their health care costs in one of several ways: reaching agreement through traditional bargaining, using the new reform’s decision-making process to make changes, adopting the new local option reform, or scheduling local votes for the coming months. 

The nine communities that have completed the new reform process in the six months since the reform was signed into law have collectively saved more than $30 million – putting this reform on track to far exceed the initial estimate of $100 million in savings for local governments. In the first year, more than $16 million of these savings are being realized by local governments, and more than $13 million by local employees through premium reductions and other benefits. A dozen other communities have come to agreement on health insurance changes through traditional bargaining since Governor Patrick changed the municipal healthcare conversation by proposing the new reform in January 2011, collectively saving another $30 million in the first year of those agreements.

Supporting Veterans:

Lieutenant Governor Murray also announced a new proposal to increase the veterans’ homeless shelter reimbursement to cities and towns from 75 percent to 100 percent. The Patrick-Murray Administration estimates that the FY 2013 caseload for veterans' benefits will increase by 10 percent to 10,009 veterans. 

Encouraging Innovation and Regionalization:

Lieutenant Governor Murray lauded the overwhelming response to the Administration’s Community Innovation Challenge (CIC) grant program. The CIC grant program offers $4 million in seed money to encourage and incentivize efficiencies and innovation in local service delivery. Since its launch in November 2011, the CIC grant program received 100 applications for funding, including initiatives to improve municipal performance management, modernize technology, implement energy efficiencies, consolidate regional schools and enhance regional service delivery. The Administration's budget includes $7 million for a second round of CIC grants to provide financial support for regionalization and other efficiency initiatives in local governments.

Additional FY 2013 Local Aid funding for key local accounts includes:

• Unrestricted General Government Aid will be funded at $833.9 million and consistent with the FY 2012 budget. An additional payment of $65 million will be made should sufficient surplus funds be available from FY 2012
• Chapter 90 Local Road Program: $200 million
• Special Education Circuit Breaker: $213 million
• State Owned Land PILOT: $26.3 million
• Regional School Transportation: $43.5 million
• Charter School Reimbursement: $71.5 million
• School Food Services Program: $5.4 million
• Municipal Library Aid: $6.8 million
• Regional Library Local Aid: $9.1 million

Additional municipal partnership initiatives include:

• Group Insurance Commission (GIC) - The GIC will offer two entry opportunities for municipalities to enter into the state health care system, making it easier for some municipalities to achieve health insurance savings.
• Information Technology Innovation - The Administration will continue to support initiatives to enhance sharing and flow of business information between state government and municipalities by identify opportunities for state government to provide IT services directly to local government and create optimized procurement for IT contracts that best serve municipalities. 
• Municipal Procurement Program  - The development of a new Municipal Procurement Program within the state Operational Services Division (OSD) that 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.