THE STATE HAS a $1.2 billion shortfall in aid promised to cities, towns, and school districts, Auditor Suzanne Bump concluded in a report released Thursday. 

The report looked at several major categories of state aid and identified $711.4 million in unfunded mandates related to school aid; $448.3 million related to school transportation; and $103.3 million in government aid, mainly related to the Community Preservation Act. 

“The state should be accountable to fulfill its funding obligations to cities and towns,” Bump said in an interview. “These are mandates that have long been on the books, and it just seems it’s easier to focus on the new and forget about the old.” 

State law prohibits unfunded mandates, requiring the Legislature to fund anything it requires cities and towns to do. But practically, lawmakers have often ignored those obligations. For example, they regularly appropriate only a portion of mandated expenses for school transportation.  

“Insufficient state appropriations or allocations have left programs underfunded, and some programs have seen financial obligations completely ignored despite a commitment under law,” the report says. 

Bump’s 59-page report, released by her office’s Division of Local Mandates, is an attempt to document some of the major categories that remain underfunded. She called it a “roadmap” for lawmakers “if they truly want to address the problems of shortfalls in municipal reimbursements.”  

The report is likely to be among the last issued as auditor by Bump, who was elected to the post in 2010. A former state legislator who served as labor and workforce development secretary under Gov. Deval Patrick, she is not seeking a fourth term this fall. 

Lawmakers have for the last couple of years had extra money to spend due to unexpectedly high tax revenues and an influx of federal COVID recovery money. 

The state does give an enormous amount of support to municipalities and also requires local contributions from communities. The amount of aid paid by the state has risen from $5.14 billion in fiscal 2018 to $6.36 billion in fiscal 2023, according to Bump’s report. The 2019 Student Opportunity Act, which is gradually being implemented, revamped the school funding formula and will provide additional aid. But Bump’s report said despite that, there remains a $1.2 billion shortfall, which will not be completely addressed even once the Student Opportunity Act is fully implemented. 

Many of the largest expenses relate to special education. The state pays nearly $350 million for the special education circuit breaker to reimburse communities with high special education expenses. But Bump’s report says that level of funding still leaves another $400 million to be borne by school districts. The state does not repay districts for special education transportation within a district, a $191 million expense. When students are transported out of district for special education, the state pays $18 million of a $100 million expense. 

The report also faults lawmakers for not paying anything toward regular school day transportation, a $158 million expense that the state has not funded in decades, despite a state law authorizing reimbursement. It also cites a $259 million shortfall in reimbursements to districts that send students to charter schools. There is around $45 million in unpaid expenses related to educating children in foster care. There are other smaller expenses related to vocational and regional school transportation. 

On the local government side, the state pays $88.5 million for Community Preservation Act incentives, which Bump’s report says is $90.5 million less than the full amount promised to communities as an incentive to join the open space conservation and historic preservation program. Other smaller expenses relate to veterans benefits and payments for state-owned land. 

Geoff Beckwith, executive director of the Massachusetts Municipal Association, in a statement called the report “an excellent blueprint that the next governor can use to eliminate critical funding shortfalls, so that communities can deliver essential services, balance their budgets, and lower reliance on the property tax.”