Cuts in Local Aid on Beacon Hill’s Table
March 10, 2010
Cities and towns still coping with deep cuts to state aid could face even tougher times in the coming fiscal year, as lawmakers discuss reductions of 3 to 5 percent in aid to local schools and municipal operations starting July 1.
Although Gov. Deval L. Patrick has proposed no cuts to either Chapter 70 funds for public schools or aid to municipal operations in his version of next year’s state budget, House and Senate budget leaders are saying they believe cuts may be needed because of slack state revenues.
One knowledgeable source said cuts of 3 to 5 percent are being considered in both Chapter 70 and municipal general aid for the coming fiscal year by key legislative budget leaders.
House Speaker Robert E. DeLeo, D-Winthrop, told the Telegram & Gazette yesterday he is worried that revenues will be too low to maintain local aid at current levels in fiscal 2011.
"This budget is proving to be probably even more difficult than last year," Mr. DeLeo said. "Our goal is to try to keep local aid as whole as we can. On the other hand, I have heard from many of the reps and advocacy groups with an interest in people with disabilities and seniors and their programs, so it is going to be a very difficult balancing act.
"I think there is a possibility of cuts throughout the whole budget," including local aid accounts, Mr. DeLeo said. "I think folks want to try to minimize cuts to local aid, but on the other hand there are a lot of moving parts we have to be concerned about."
While Chapter 70 funding was protected last year and aid to municipal operations cut 29 percent, Mr. DeLeo said both accounts face possible reductions in the new budget.
"I look at Chapter 70 and local aid in the same light. They are on the table in terms of consideration of where we want those cuts," he said.
State Sen. Stephen M. Brewer, D-Barre, vice chairman of the Senate Ways and Means Committee, said yesterday that towns should be preparing for possible cuts in local aid next fiscal year.< ;br />
"We have cautioned for the last 18 months that fiscal year ’11 is going to be the toughest year so far," Mr. Brewer said. "A lot of us have gone back to our cities and towns and told them to be prepared for cuts and that it would be wise to prepare for something in the range of a 5 percent cut."
He said that while Mr. Patrick called for funding local aid at this year’s levels, his budget counts on $600 million in federal Medicaid money not yet assured and receipt of $160 million in federal Medicaid repayments. The problem with those revenues, Mr. Brewer said, is legislators cannot rely on them until they are received.
Likewise, he said, the governor’s budget relies on $50 million from candy and soda taxes, $20 million from a proposed expansion of the bottle bill, and millions from higher taxes on cigars and chewing tobacco, which he believes will not be passed this year.
Mr. Brewer said he thinks it is likely that money will come from the federal government, but "likely" doesn’t pay the bills.
"Money in hand pays the bills," he said. "We cannot spend in good conscience until we have the money in hand."
Mr. DeLeo said it is too soon to tell whether the Legislature would back a change in law to allow cities and towns to scale back public employee health care plans by giving them authority to design those plans without bargaining with unions. He said many local mayors, councils and selectmen want that authority to create local budget savings.
"I think there is a logical connection there," Mr. DeLeo said.
He said he hopes the House will come up with a local aid resolution soon to give cities and towns early warning of funding levels they can expect.
Republicans, meanwhile, are pressing to hold the line on local aid. They are calling on the House lawmakers to vote on a resolution to level fund local aid at their next formal session.
The resolution, which also has received support from a handful of Democrats, would set local aid at levels proposed by Mr. Patrick. It was unclear when the resolution might be heard as no formal sessions are scheduled so far this week.
The question of local aid amounts topped the agenda at a meeting of local officials and legislators in Shrewsbury Saturday, according to state Rep. Karyn E. Polito, R-Shrewsbury.
Funding local aid at this fiscal year’s levels, she said, "is the least we can do for our cities and towns." She said changes in the health insurance law would also give cities and towns a way to save on health care, which is their "biggest budget buster."
"If they would allow them to either design their own plan to save money or allow the community to join the (state) Group Insurance Commission, they could also do a lot of good on the local level," Ms. Polito said.
The speculation: One source said cuts of 3 to 5 percent are being considered in both Chapter 70 and municipal general aid for the coming fiscal year by budget leaders.
The quote: `A lot of us have gone back to our cities and towns and told them to be prepared for cuts and that it would be wise to prepare for something in the range of a 5 percent cut.’ – State Sen. Stephen M. Brewer, D-Barre