State leaders have moved to provide some positive certainty this week in one of the most uncertain City and School Budget years on record – hopefully staving off job cuts and preserving school positions that have been eliminated during the first two months of the fiscal year.
In a joint announcement from the State Senate, the State House of Representatives and Gov. Charlie Baker’s Office, the State Government offered up the first indication of where numbers might be for Local Aid and School Funding (known as Chapter 70). The numbers are very positive considering what was expected, with all cities and school districts assured level funding and a pot of money available to address inflationary costs so that level funding does not mean a cut in the budget.
In Everett, this means that Local Aid will be level funded at $7.336 million, and there is also a pot of money to accommodate inflationary increases. Many cities and towns had passed budgets expecting up to a 30 percent cut in Local Aid – prompting layoffs, spending from Rainy Day Funds and reductions in services over the first two months of the fiscal year (beginning on July 1). So, the news assuring no cut was very much welcome news. In Everett, the City has operated on a 1/12th budgeting process that triggered major cutbacks at City Hall, and a few layoffs as well. There was no certainty as to what was going to happen with the Local Aid numbers, so Everett’s Financial Team was playing things very conservatively. The news will help them to begin crafting a budget for September with more certainty, but there are still questions an official said late last week when the state plan was being crafted.
The same is true for Everett on the School Department side. They filed a very no-nonsense budget in June that had many cuts involved in it and a tremendous amount of restructuring so as to save any jobs that involved teaching or direct contact with students. The state assurances amounted to promises of $75.001 million for the schools this year, and that is an increase of more than $3 million over last year’s state funding numbers.
The School Department crafted a budget based on at least a 10 percent cut, and potentially up to 15 or 20 percent – which would have been devastating.
State Sen. Sal DiDomenico had been working on the Local Aid and Chapter 70 assurances for several weeks, he said, and indicated that leaders in both houses and in the administration wanted to give some certainty for the fall to municipalities.
“Despite these difficult times due to the economic fallout from the COVID-19 pandemic, the Senate, House and Administration have committed to level funding for Local Aid and an increase of $107 million in Chapter 70 education funding to account for both inflation and enrollment under the law from the Fiscal Year 2020 year,” he wrote in a statement. “In light of the very serious budgetary challenges we are facing as a Commonwealth, this level of funding shows our continued commitment to our municipalities and school districts.”
House Speaker Bob DeLeo said, “Even amid the financial uncertainty brought on by COVID-19, we understand the importance of our local officials knowing what they are facing as soon as possible. I hope these figures reassure the people…that (municipalities) will be getting no less than they received in FY20.”
The City and School Budget process relies in large part on state funding through Local Aid and Chapter 70. Due to the pandemic, the State Budget that had been unveiled in February was scrapped, and so far there is no State Budget that has passed. That led to great uncertainty for the cities and towns who were also trying to pass their traditional budgets before July 1.
This was the first certain message on funding those cities and towns like Everett have gotten from the state.
The state apparently plans to pass a three-month, $16 billion budget that will take them to Oct. 1, when they will have a traditional budget available for a roadmap on spending.
That final budget will have a lot to do with the federal stimulus packages that are expected to come from Washington, D.C., to help states handle the COVID-19 impacts. Right now, Massachusetts is said to have an $8 billion budget gap to close, and there have been estimates the state could get as much as $10 billion to fill that gap, or as low as $5 billion. That is all being worked out in the Congress right now, and it is still uncertain.
State leaders said they could withstand a federal bailout of $6-7 billion, but anything less would mean drastic action.