While total state aid to Harvard has been cut by more than 10 percent in the past five years, additional aid cuts that were announced last week by the Patrick administration are not expected to have a significant additional impact on the town.
“I’m not too concerned right now,” Town Administrator Tim Bragan told members of the town Finance Committee on Wednesday, Nov. 19. That was just hours after Governor Patrick announced a plan to cut local aid to cities and towns by $65 million as a result of a newly discovered state budget deficit of $329 million in the current fiscal year.
The following day there was more good news for Harvard when House Speaker Robert DeLeo said the House would not agree to the largest local aid cut proposed by Patrick—a $25.5 million reduction in unrestricted general government aid. That proposed cut in unrestricted aid was projected to reduce revenues to cities and towns by 2.7 percent.
Local aid to Harvard consists primarily of unrestricted general government aid and funds earmarked for the school system, known as “Chapter 70” aid. Patrick said he would not cut Chapter 70 funds.
The governor cannot impose a unilateral cut in unrestricted government aid and other forms of local aid; he must seek permission from the Legislature for that. However, cuts of some $40.3 million in grants and other funding to cities and towns were made unilaterally by the governor under his emergency budget-cutting powers, according to the Massachusetts Municipal Association (MMA).
The story for Harvard, though, is that none of the state aid cuts will be severe, according to Bragan, even though he told the Finance Committee he had heard that the total state deficit this year is likely to be as high as $700 million, an estimate he said came from the Massachusetts Taxpayers Foundation.
Harvard impacts
Based on information from Lorraine Leonard, Harvard’s finance director, and the MMA, the following are the key state aid cuts proposed or implemented by the governor last week and their potential impact on Harvard:
- Unrestricted general government aid. Given the House speaker’s statement, it appears this cut will not happen. Were it to go forward, a 2.7 percent cut in that funding would result in a loss of about $35,000 to Harvard, based on state Department of Revenue (DOR) figures.
- Special education reimbursements. This funding was cut by $3.86 million or 1.5 percent. Leonard said the impact on Harvard will be insignificant, partly because the town realized a savings in special education funding last year when the CASE collaborative (a regional group that manages special education services for Harvard and several other towns) changed its accounting methods.
- Charter School reimbursements. This funding was cut by $1.2 million or 1.5 percent. Leonard said that cut would have a “very slight impact” on Harvard. The town received $39,600 in charter school reimbursement funding from the state last year. A 1.5 percent cut in that account would result in less than $1,000 in lost funding to the town. The reimbursements are paid to towns when students leave the towns’ school systems to attend charter schools.
- Kindergarten expansion grants. The governor cut this account by $359,000, or 1.5 percent. Leonard said Harvard’s grant is about $30,000, so the impact on the town will be less than $1,000 in lost revenue.
- Library aid. This funding will be cut by $283,000 statewide, or 1.5 percent. Harvard received $6,500 in state library aid last year, so a 1.5 percent cut will amount to less than $100 of lost revenue.
- Chapter 70 “pothole fund.” This funding, which is intended to supplement Chapter 70 education funding and to provide relief for extraordinary and unanticipated needs, was cut by $2.88 million. While the town has received funds under this account, Leonard said she did not have information on the cut’s impact on the town.
A number of other cuts in state aid to municipalities will have no impact on Harvard because they involve such areas as regional and vocational schools. Those include the following: regional schools ($40 million cut), regional school transportation ($18.7 million cut), regional efficiencies reserve funding ($7.1 million), vocational school transportation ($2.24 million), public school military mitigation grants ($1.3 million), sewer rate relief ($1.1 million), and extended learning time grants ($1 million).
School aid increases
as state aid declines
Between fiscal 2009 and 2014, total state aid to Harvard was cut by $590,174 or 13.34 percent, according to figures from the state Department of Revenue. The town’s total state aid dropped in that time from $4.1million to $3.5 million. Roughly 86 percent of the total state aid cuts has been in the category of unrestricted general government aid.
As the title suggests, unrestricted general government aid is for “general purpose financial assistance” to municipalities, according to the DOR. It is distributed to cities and towns according to a formula based on population and property values. Chapter 70 funds are used to help pay for local schools and are based on a formula that takes into account property values and personal income data.
Harvard’s Chapter 70 funds actually increased between fiscal 2009 and 2014 by a fraction of a percent. As of fiscal 2014, Chapter 70 funding to Harvard totaled $1.8 million, while unrestricted general government aid, which had dropped by more than 28 percent, totaled $1.3 million.
While the state’s budget picture is apparently changing rapidly, Harvard so far has remained relatively unscathed.
