Municipal Challenges To The MBTA Communities Act As An “Unfunded Mandate”
Hill Law, a Massachusetts firm specializing in land use and municipal law, prepared the following memorandum for its clients. At least one client shared this document to help educate the public about their legal rights under Massachusetts General Laws. This information is crucial for municipal officials and concerned residents to understand their rights regarding the MBTA Communities Act (M.G.L. c. 40A § 3A) as determined to be an “unfunded mandate”. The Act could have significant impacts on communities and the tax burdens that residents may face.
To Firm Clients: This memorandum, prepared by Daniel C. Hill, Esq. and Dennis A. Murphy, Esq., addresses municipal challenges to the MBTA Communities Act as an “unfunded mandate.” Dated March 1, 2025, it provides an analysis of the legal and financial implications for municipalities, and ultimately taxpayers.
Last week the State Auditor’s Division of Local Mandates (“DLM”) issued a formal legal determination that the MBTA Communities Act, G.L. c. 40A, § 3A, violates another state law, the Local Mandate Law, G.L. c. 29, § 27C, because it “constitutes an unfunded mandate.” (2/21/25 Mandate Determination from DLM, p. 2, enclosed)
Since 1981, the Local Mandate statute has prohibited new state laws and regulations from imposing cost obligations on municipalities, unless:
The Legislature provides an appropriation to fund implementation of the law, or
The new law has been expressly exempted by the Legislature, or
A municipality opts in by adopting the new mandate; or
The cost burden on municipalities amounts to nothing more than an “incidental local administration expense”. G.L. c. 29, § 27C(a-c, g).
In response to a request for a legal determination from the Town of Middleborough, DLM has determined that none of these caveats, exemptions or exclusions applies to the MBTA Communities Act, which make it a mandate subject to the Local Mandate Law.
Municipalities have two ways to solicit legal determinations about whether a new law imposes a mandate subject to the Local Mandate Law. First, a town or city can petition the State Auditor, who is statutorily authorized to calculate whether the cost of compliance has been fully funded by Legislative appropriation and assess any deficiency in funding. Id. § 27C(d, f).
Second, a municipality -- or any ten taxable inhabitants -- can file a class action suit in Superior Court to determine whether a new mandate “imposes additional costs on any city or town . . . [and whether] the amount necessary to reimburse such city or town” has been appropriated to fulfill the municipal mandate. Id. § 27C(e). In any Court proceeding, the determination of DLM “shall be prima facie evidence of the amount necessary” to cure the deficiency. Id. If the Superior Court finds a deficiency, then a city or town is automatically exempt from the new law until the Commonwealth pays the additional cost of the unfunded mandate. Id.
Both of these means are now being employed to determine whether the MBTA law imposes an unfunded mandate. Last fall several municipalities (Methuen, Middleborough, Wrentham among them) solicited statutory determinations from the State Auditor’s Office regarding the local mandate imposed by the MBTA Communities Act. That office withheld its determination pending the SJC’s decision last month that invalidated the guidelines issued under the MBTA law and dismissed the Attorney General’s request for enforcement.
That decision decreed the MBTA Communities Act to be “a legislative mandate”. Attorney General v. Town of Milton, et al., No. SJC-13580 (Jan. 8, 2025) at 17.
Last week, the State Auditor’s DLM responded to those municipal petitions, issuing the Mandate Determination that MBTA Communities Act constitutes an unfunded mandate under the Local Mandate Law. It was undisputed that the MBTA Communities Act is a new law, not exempted from the requirements of the Local Mandate Law, for which the Legislature did not provide any appropriation when it was adopted in 2021. The Local Mandate Law requires any mandates to be funded by an appropriation “at the same session in which such law is enacted”. G.L. c. 29, § 27C(a). It is also undisputed that MBTA Communities Act does not require local acceptance by a municipality for its mandate to be fiscally binding.
As a result, the only debatable issue analyzed by DLM was whether the burden imposed more than an “incidental local administration expenses”. Id. Although DLM has not yet calculated the costs necessary to comply with the MBTA Communities Act, for which it needs more data, DLM did determine those cost obligations “amount to more than incidental local administration expenses.” (2/21/25 DLM Mandate Determination, p. 6)
After the enactment of MBTA Communities Act, the Legislature appropriated grant funding to assist some communities with compliance, but this funding was too little too late, according to DLM. By law, appropriations to fund a new mandate must be made contemporaneously in the same legislative session. G.L. c. 29, § 27C(a). Moreover, those competitive grants were not available to all affected Towns, and in any event the grants were never intended to reimburse all costs imposed by the MBTA mandate.
The DLM Mandate Determination cited emergency regulations passed in the wake of the SJC Milton decision, which specifically contemplate municipalities “will provide funding for infrastructure upgrades as needed for individual projects”. 760 CMR 72.05(1)(e)2. No legislative appropriation has been made to reimburse municipalities for costs for infrastructure upgrades imposed by the MBTA regulations. As a result, the DLM “determine[d] that the current method of funding by the Commonwealth of the costs of compliance with § 3A incurred by MBTA communities does not satisfy the requirements of the Local Mandate Law.” (Id. p. 8).
As always, if you have specific legal questions, please contact us.