Budget Amendment ID: FY2027-S4-1035

LOC 1035

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

Mr. Fernandes moved that the proposed new text be amended by inserting at the end thereof the following section:-

“SECTION__. (a) There shall be a special commission to study the adequacy, reliability, and 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.

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) recommend sustainable methods of funding to ensure adequacy and reliability of unrestricted general government aid to municipalities; (vi) the ability to account for a municipality’s change in population or tax base in a general local aid funding distribution method; (vii) the potential to calculate municipal costs based on a municipality’s need for municipal services and a municipality’s ability to raise local revenue; (viii) the potential to offer incentives or bonuses in the local aid formula for communities able to demonstrate success in advancing housing and energy affordability; and (vi) any alternative apportionment methods that maximize the equity of future distributions of general local aid.

(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 their designee; the secretary of administration and finance or a designee, who shall serve as chair; the commissioner of the department of revenue, or a designee; 3 members appointed by the Massachusetts Municipal Association, Inc., including the executive director or a designee and 2 representatives of different community classifications; the president of the Massachusetts Taxpayers Foundation, Inc. or a designee; and 3 members 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 submit a report on its findings and recommendations to the clerks of the senate and house of representatives and the chairs of the senate and house committees on ways and means not later than July 1, 2027.”