Accelify Blog

At Least One More Tough Year In Store

April 14, 2010

While there are signs the economy is getting better, the next fiscal year will be tough for communities.

That was the message yesterday for about two dozen town officials at a Massachusetts Municipal Association sponsored breakfast at the police station.

"It’s not a pretty picture but one that is improving," said MMA senior legislative analyst Thomas Philbin. "The recession that began in 2007 has been tough to shake, much like a bad cold that won’t go away."

Mr. Philbin said more revenue is coming into the state than last year at this time.

State Sen. Michael O. Moore also confirmed earlier repo rts this week that the state legislators are anticipating a cut in fiscal 2011 state aid to communities. In Boston yesterday, legislative budget leaders said cities and towns should brace for a local aid cut of up to 4 percent in the coming budget year.

Mr. Philbin encouraged town officials to tell legislators representing their communities what the cut could mean to their budgets and services that are offered to residents.

Communities have also been dealing with a cutback of 70 to 40 percent in special education reimbursement this fiscal year. State Rep. Carolyn C. Dykema, D-Holliston, said it looks like that reimbursement rate will stay about the same in fiscal 2011 or perhaps decline at a rate she said would mirror the anticipated decrease in state aid.

Town officials said a cutback in the special education reimbursement affects other parts of a community’s spending plan.

"In reality a cut in special education reimbursement is a cut in the regular school budget," Southboro Selectman William J. Boland said.

"The whole issue of special education has to be looked at," Northbridge Town Manager Theodore D. Kozak said.

Mr. Moore also said voters will be asked in a November ballot question to cut the sales tax from 6.25 percent to 3 percent. Both he and state Rep. George N. Peterson Jr. said if the question passes it could mean there would be a decline in revenue of at least $2 billion a year. In addition, Mr. Moore said it was his understanding the November ballot will also include a question that would eliminate the sales tax on alcohol, which would mean about a $100 million year cut in state revenue.

The MMA is playing a major role in an att empt to pass a municipal relief bill that is

being reviewed by the House Ways and Means Committee. The bill contains a number of provisions communities can use to increase revenues and decrease costs. Mr. Peterson said he expects the bill will come out of committee for discussion by the Legislature in a few weeks.

The rapid increase in insurance premiums continues to be stressful for communities across the state, Mr. Philbin and several town officials said. For example, Mr. Philbin said health insurance costs have gone up about 150 percent in 10 years.

"Health insurance is the biggest budget buster on local budgets," Mr. Philbin said as several officials nodded their head in agreement.

The lowering of state reimbursement for the Quinn Bill that provides increased pay for police officers based on the education they have is also affecting budgets, officials said.

Mr. Peterson said he thinks the Quinn Bill has to be phased out and not cut completely.

"It’s a sticky situation," he said of the politically charged issue.

Mr. Peterson urged town officials to call state legislators to talk about issues affecting their communities.

In an interview after yesterday’s 90-minute meeting, he said he enjoys meeting face to face with town officials.

After the session, Mr. Moore said the Central Massachusetts legislative delegation is holding a seminar with Massachusetts Taxpayers Foundation Executive Director Michael J. Widmer at 7 p.m. March 31 at Worcester Technical High School. The free seminar is open to the public.