Budget Amendment ID: FY2027-S4-1035-R2

2nd Redraft LOC 1035

Special commission to study the adequacy, reliability, and distribution of unrestricted general government aid

Mr. Fernandes, Ms. Rausch, Messrs. Montigny and O'Connor, Mrs. Dooner, Messrs. Tarr and Driscoll, Ms. Howard and Messrs. Fattman and Velis moved that the proposed new text be amended by inserting after section 36 the following section:-

“SECTION 36A. (a) There shall be a special commission to study the distribution of unrestricted general government aid to municipalities, including unrestricted general government aid, lottery aid as provided in section 18C of chapter 58 of the General Laws and additional assistance aid to municipalities. The study shall not include foundation aid as defined in section 2 of chapter 70 of the General Laws.

(b) The commission shall consist of the following members: the chairs of the joint committee on ways and means or their designees; the ranking members of the joint committee on ways and means or their designees; the secretary of housing and livable communities or a designee; the secretary of administration and finance or a designee, who shall serve as chair; the commissioner of revenue or a designee; the executive director of the Massachusetts Municipal Association, Inc.; 1 member of the Massachusetts Municipal Association, Inc. representing a municipality with a city form of government selected by the executive director; 1 member of the Massachusetts Municipal Association, Inc. who shall represent a municipality with a town form of government selected by the executive director; the president of the Massachusetts Taxpayers Foundation, Inc.; the executive director of the Tufts University’s Center for State Policy Analysis; and 3 members to be appointed by the governor who shall: (i) have experience in public sector finance; and (ii) reflect a diverse geographic distribution and stakeholder representation.

(c) The commission shall examine historical funding trends for unrestricted general government aid, the current apportionment method used to allocate unrestricted general government aid to municipalities, evaluate the effectiveness and equity of said method and make recommendations to maximize the equity of the distribution of future increases to unrestricted general government aid to municipalities.

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) current and historic funding trends of local aid including but not limited to the ratio of discretionary state aid provided to municipalities as compared to municipal revenues; (iii) the extent to which a municipality’s needs are reflected in the proportional distribution of the unrestricted general government aid; (iv) any equity discrepancies that exist between municipalities across the commonwealth related to local aid distribution, including a community’s ability to generate local revenues to meet community needs; (v) the ability to account for a municipality’s change in population or tax base in a general local aid funding distribution method; (vi) the potential to calculate municipal costs based on a municipality’s need for municipal services and a municipality’s ability to raise local revenue; (vii) any alternative apportionment methods that maximize the equity of future distributions of general local aid; and (viii) the feasibility of supplemental incentive payments for municipalities that have policies that support or promote the commonwealth’s housing and energy goals. The commission shall consider the unique needs and characteristics of communities across the state and consult with relevant local officials, stakeholders, and subject matter experts as necessary.

(d) The commission shall submit a report of its findings and recommendations, including drafts of legislation necessary to carry those recommendations into effect, by filing the same with the clerks of the senate and house of representatives and the senate and house committees on ways and means not later than July 1, 2027.”.