UMASS/AMHERST 312066 0367 7411 5 Massachusetts Department ofRevenue Division ofLocal Services Cherry Sheet Manual MitchellAdams, Commissioner Robert H. Marsh, Deputy Commissioner i ! t 1 i 1 TABLE OF CONTENTS Page 1. Introduction Description ofthe FY96 Cherry Sheet Manual 1 Trends in Total and Net State Aid FY89 thru FY96 3 n. Cherry Sheet Receipts Description ofCherry Sheet Receipts 5 A. Education: Distributions and Reimbursements A-1 Chapter 70 7 A-2 School Transportation Programs 14 A-3 School Construction 16 A-4 Retired Teachers' Pensions 18 A-5 Tuition ofState Wards 19 Education: Offset Items A-6 Racial Equality 20 A-7 School Lunch 23 A-4 Regional School Transportation (Form 2-ER only) 24 B. General Government: Distributions and Reimbursements B-1 Lottery, Beano, and Charity Games 25 B-2 Additional Assistance 27 B-3 Highway Fund 28 B-4 Local Share ofRacing Taxes 30 B-5 Regional Public Libraries 3 B-6 Police Career Incentive 32 B-7 Urban Renewal Programs 33 B-8 Veterans' Benefits 35 B-9 Exemptions: Veterans, Blind Persons & Surviving Spouses 36 B-10 Exemptions: Elderly 38 B-11 State Owned Land 39 General Government: Offset Item B-12 Public Libraries 40 Page m. Cherry Sheet Assessments-Municipal and Regional Description ofCherry Sheet Assessments/Charges 43 A. County Assessments, County Tax 45 B. State Assessments and Charges: B-1 Supervision ofRetirement Systems 47 B-2 Motor Vehicle Excises 48 B-3 Retired Employees' Health Insurance 49 B-4 Retired Teachers' Health Insurance 50 B-5 Mosquito Control Projects 51 B-6 Air Pollution Control Districts 52 B-7 Metropolitan Area Planning Council 53 B-8 Old Colony Planning Council 54 RMV B-9 Non-Renewal Surcharge 55 C. Transportation Authorities: C-1 Massachusetts Bay Transportation Authority 56 C-2 Boston Metropolitan Transportation District 57 C-3 Regional Transit Authorities 58 D. Annual Charges Against Receipts: D-1 Multi-Year Repayment Programs 59 D-2 Special Education Assessment 60 D-3 Energy Conservation Programs Repayment 61 D-4 Small Town Road Assistance Program (STRAP) 62 IV. Cherry Sheet Payment Schedule 63 V. Cherry Sheet Resources 69 VI. Samples ofthe Cherry Sheet (State Totals FY96) 71 Form CS 1-ER (Municipal Receipts) 73 Form CS 2-ER (Regional Receipts & Charge) 74 Form CS 1-EC (Municipal Charges) 75 INTRODUCTION I. The Division ofLocal Services has developed the FY96 Cherry Sheet Manual to guide public officials, as well as private citizens and organizations interested in municipal finance, through the FY96 Cherry Sheet. We hope this guide will assist you in understanding how the programs on the Cherry Sheet work. PURPOSE OF THE CHERRY SHEETS Named for the cherry colored paper on which it was originally printed, the Cherry Sheet is the official notification from the Commissioner ofRevenue ofthe next fiscal year's state aid and assessments to cities, towns, and regional school districts. The purpose ofthe Cherry Sheet is to ensure that local budgets reflect realistic estimates ofthe amount ofrevenue a municipality and regional school district will actually receive from the state during the upcoming year, as well as the amounts that will be assessed upon local governments to pay for a variety ofstate or sub-state programs in which they participate. The Tax Rate Recapitulation Sheet, filed by local assessors with the Division ofLocal Services to certify property tax rates, must reflect the receipt and charge figures contained on the Cherry Sheet. HOW TO USE THE FY96 CHERRY SHEET MANUAL This manual presents information on each ofthe programs which comprise the FY96 Municipal and Regional Cherry Sheets. The following features ofthe receipt and assessment programs that appear on the Cherry Sheet are described below. Agency refers to the state agency administering the program. • Title • Item Number • Law (s) Creating/Modifying Program • State Budget Account Number • Agency • Amount • Purpose • Distribution/Reimbursement and Assessment/Charge Formula • Administration • Payment Schedule 1 This manual is organized into six sections. Section I provides an introduction to the manual. Municipal and Regional Cherry Sheet Receipts Programs are described in Section II. Section III provides a description ofMunicipal and Regional Cherry Sheet Assessments. The FY96 payment schedule for the Cherry Sheet Programs can be found i Section IV. Other Cherry Sheet resources available through the Division ofLocal Services are listed in Section V. In the final section, Section VI, we have provided sample copies ofall three Cherry Sheet forms showing the FY96 state totals. FY96 CHERRY SHEET SUMMARY FY96 Cherry Sheets were mailed to local officials on June 30, nine days after Governor Weld signed the FY96 state budget. For the first time, however, the estimates were released in advance ofthe mailing, by placing computer files on the Division's On-line Access System and the MAGNET home page on the World-Wide Web. For the fourth consecutive year, Cherry Sheet receipts increased significantly, from $2,924 billion in FY95 to $3,192 billion in FY96. Trends in aid can be seen on the graph and table on pages 3 and 4. Significant features ofthe FY96 Cherry Sheets were: • an increase of$209.3 million in Chapter 70 Education Aid. A portion ofthe Chapter 70 increase is attributable to the new guarantee that all municipalities and regional school districts will receive a minimum of$75 in aid perpupil. • a $51 million increase in Lottery Aid. The FY96 Cherry Sheet receipt and assessment program allocations that use Equalized Valuations (EQV) reflect 1994 Equalized Valuations. Also, as specified by the FY96 state budget, the 1992 United States Census Bureau's population estimates were used in all formulas that required population estimates. Since FY94, the Department ofRevenue has implemented a provision ofstate law (Ch. 58, S. 18F) that allows the withholding ofstate aid to cities and towns that have not submitted the prior year's Schedule A to the Department ofRevenue. This provision of the law will be applied again in FY96. All withheld aid is distributed to the appropriate municipality once the report has been submitted and accepted by the Division of Local Services. 2 3 "" * o 8i <f—TNts' \C«—SoN <ooexSoj* >t~tso~" r<rT4fNo <N, <(_sS" <TNf <rm~"_ <os\f oo(vOor<—oNvonoq" o-»»<ro—£o<-Noo) \<cr(—o-~NN~". oo—»mo—_oNoC nor0fo»<~-0ono0i" —\vxr-oo-T"o—coO<T—jo>Nv"-"\«oIO—T-NotO-" m>o —o" 0or~\o o? 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Chapter 58, Section 25A ofthe Massachusetts General Laws provides that the Commissioner ofRevenue estimate in advance the state's share oflocal reimbursement and assistance programs as authorized by law and appropriated by the legislature. Local assessors are required to use these figures in determining the local property tax rate. Cherry Sheet receipts appear on two forms: CS 1-ER, which notifies municipalities of estimated receipts and CS 2-ER, which notifies regional school districts ofestimated receipts (and charges). State aid to municipalities and regional school districts consists oftwo major types -- distributions and reimbursements. Distributions provide funds to each municipality and regional school district according to various formulas. Reimbursements provide funds to reimburse municipalities and regional school districts for all or part ofthe costs incurred during a prior period for certain programs or services. In addition to reimbursements and distributions, it should also be noted that certain programs on forms CS 1-ER and CS 2-ER are designated as "Offset Items". These items are amounts that constitute categorical aid, i.e., funds that must be spent for specific municipal and regional school district programs. Funds received under programs designated as "Offset Items" may be spent without appropriation in the local budget. All other receipt items on the cherry sheet are considered revenues ofthe municipality's or regional school district's general fund and may be spent for any purpose, subject to appropriation. 5 Cherry Sheet Receipt Programs 6