Budget Amendment ID: FY2018-S3-33-R1

Redraft OTH 33

Fair Revenue Sharing Among All Cities and Towns

Mr. Lesser moved that the proposed new text be amended by inserting, after section __, the following new section:-

“SECTION __. There shall be a commission to study the distribution of general local aid in the commonwealth, including unrestricted general government aid, lottery aid as promulgated in section 18C of chapter 58, and additional assistance aid to municipalities. Said study shall not include chapter 70 foundation aid, as defined in section 2 of chapter 70. The commission shall examine the current formula used to distribute unrestricted general government aid to municipalities, evaluate the effectiveness and equity of said formula, and make recommendations to establish a more equitable distribution of unrestricted general government aid to municipalities in the commonwealth.

The commission shall review all aspects of general local aid including, but not limited to: (i) the current allocation of local aid to municipalities; (ii) the reflectiveness of municipalities’ needs in the proportional distribution of the unrestricted general government aid formula; (iii) any equity disparities that exist between municipalities across the commonwealth related to local aid distribution; (iv) the ability to account for a municipality’s change in population or tax base in a general local aid funding formula;  (v) the potential to calculate municipal costs based on a municipality’s need for municipal services and a municipality’s ability to raise local revenue, less a municipality’s local revenues; and (vi) any alternative formulas that may create a more equitable distribution of general local aid.

The commission shall consist of the following members: the secretary of the office of administration and finance, or a designee; the commissioner of the department of revenue, or a designee; 1 member appointed by the treasurer of the commonwealth; 2 members of the senate, 1 of whom shall represent a gateway municipality, as defined in section 3A of chapter 23A, and shall serve as co-chair; 2 members of the house, 1 of whom shall represent a gateway municipality, as defined in section 3A of chapter 23A, and shall serve as co-chair; 1 representative from the Massachusetts Municipal Association; 1 representative from the  Federal Reserve Bank of Boston; 1 representative from the Massachusetts Budget and Policy Center; 1 representative from the Massachusetts Taxpayers Foundation; and 1 representative from the Edward J. Collins, Jr. Center for Public Management.

The commission shall file a report of its findings and recommendations, including any new or revised local aid formulas, with the clerks of the senate and house of representatives, the chairs of the senate and house committees on ways and means, and the chairs of the joint committee on municipalities and regional government no later than March 1, 2018.”