Massachusetts towns receive money through the state lottery system that can be used on almost anything, but some local officials think their towns are being short-changed.
That's according to Jack Reardon of the Provincetown Independent.
CAI's Gilda Geist spoke to Jack to learn more.
Gilda Geist Massachusetts cities and towns receive money through the state lottery system. How is that supposed to work?
Jack Reardon Revenue for the state lottery is what funds this big pot of money that's called unrestricted general government aid, or UGGA. UGGA funds are unrestricted, as the name applies, and work within towns and cities across Massachusetts. So, these are things like roads, police departments and fire departments, and all the money comes generally from the revenue that the lottery generates each year. Massachusetts has one of the highest revenue per capita of any state lottery system—about $833 per person in 2025. So, all this money goes back to cities and towns in addition to some gambling tax revenue, and towns are able to spend it as a form of funds that doesn't require raising taxes.
GG That's how it's supposed to work, but the town of Wellfleet has some concerns about how profit sharing with the state's lottery system actually works. What are those concerns?
JR Well, a lot of Wellfleet's concerns really come out of Barnstable County, which had a report this year which found that while retailers across Barnstable County have sold about $231 million in lottery tickets, the county and the towns in it have only received about $12 million back in aid. So, this discrepancy between sales and the funds that come back to towns and cities has really sparked a concern amongst them about whether or not they're getting their fair share. Wellfleet's concerns is whether the formula, which hasn't been updated since 2009, really reflects the demographics and the needs of seasonal communities out here on Cape Cod and Wellfleet in particular. Seasonal communities face a couple unique needs. One is really the high population in the summer and high demand on municipal services then. There are lots of mandates that they face, especially related to the environment that require funding capital projects like sewers. And these sorts of things are things Wellfleet wishes were part of the formula for unrestricted aid so that they could use the state money to fund a lot of the projects that they're facing out here.
GG What kinds of things can the money that cities and towns are supposed to be receiving from the state lottery system be used for?
JR So, cities and towns can really use this money on anything. UGGA is unrestricted. With the exception of dedicated Chapter 7 education funding, towns and cities are really able to do whatever they'd like. And this helps especially Massachusetts, where we have Proposition 2½, which really caps the amount of tax increases that towns and cities are able to levy on citizens and residents. So, this provides funding that's really important without a lot of municipal revenue streams that towns and cities in other states are able to access and are able to increase without having to put votes to towns in overrides and exemptions.
GG What's next? What are Beacon Hill lawmakers doing about this issue, if anything?
JR So, what Wellfleet raised was a real concern about an outdated formula. Essentially, this formula hasn't been changed in 17 years. Proportions are frozen. The amount that Wellfleet or Boston or Worcester received 17 years ago, according to the population and real estate tax availability, is the same as it was then. So, some lawmakers, particularly in the state senate, have proposed a review of this formula to see if there are ways that it can incorporate a more dynamic set of needs or at least be updated to the times. That passed unanimously in the senate and was included in their budget proposal. In the state house, it didn't go through into their budget proposal. When that budget went to conference earlier this month, it got taken out, and the final budget that the governor signed did not include any review of UGGA. It did include an increase in the total amount that towns and cities received—about $3 million of which is distributed on a per capita basis—essentially ignoring the general frozen proportions that we've been using here in Massachusetts. The outlook is not good for this session on any particular changes, but in the future, there's always a possibility, considering the strong support for an UGGA review in the state senate.
