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Local Aid and Finance Sweeping budget cuts spare major local aid accounts
Gov. Deval Patrick today announced his plan for dramatic cuts to address a projected fiscal 2009 state budget deficit of $1.4 billion, but he and Lt. Gov. Timothy Murray said major local aid accounts would be spared “for now.”
The plan preserves funding for Lottery, Additional Assistance and Chapter 70 aid, which together account for $5.3 billion in state spending. The Patrick-Murray administration held to their repeated statements that they would consider reducing direct local aid only as a last resort.
The administration announced overall cuts and spending controls of just over $1 billion, including the following steps:
• $755 million in mid-year cuts to the state budget
• $146 million in savings from additional spending controls
• $52 million from voluntary spending reductions in the judiciary, Legislature and constitutional offices
• $100 million in fiscal 2009 savings by extending the state’s pension funding schedule by two years
In addition, the governor’s plan identifies $168 million in additional revenues to the state and relies on drawing another $200 million from the state’s $1.8 billion rainy day fund.
While the main local aid programs were exempted from the governor’s emergency cuts under Section 9C, there were reductions to a number of smaller municipal and school accounts, mainly grant programs and earmarked spending.
The Community Policing program was cut by $5 million and funding for the new Municipal Police Grant program ($4 million) was eliminated. Funding for the Sewer Rate Relief program ($20 million) was also eliminated, although the governor’s message announces that the Massachusetts Water Resources Authority will absorb its share of the loss and not add to rates this year as a result of the cut.
Several education programs were reduced, largely earmarked spending, including $13.5 million from the special education “circuit breaker” program, $1.3 million from METCO, $3.5 million from pre-kindergarten and kindergarten expansion programs, about $300,000 from After School/Out of School and Extended Learning Time grants, and $750,000 from the Chapter 70 hardship reserve.
The Board of Library Commissioners matching grant program ($250,000) was eliminated.
The governor also filed “emergency legislation” to help him close the budget gap. One provision would extend the Group Insurance Commission enrollment deadline from Oct. 1 to Dec. 1. This section may be helpful to those communities that have been negotiating on joining the GIC, but have not yet concluded those negotiations.
The legislation also includes a renewed effort by the administration to close the telecommunications property tax loopholes on poles, wires and equipment. The measure would eliminate the utility corporation tax exemptions for telecommunications companies and make them subject to the same exemptions as other business corporations. If the Legislature acts to close the loopholes during fiscal 2009, the administration estimates that this would free up funds in municipal overlay accounts due to the Appellate Tax Board ruling on poles and wires issued earlier this year. For fiscal 2009 only, the plan would be revenue-neutral for cities and towns, as the administration’s plan would reduce each community’s share of the supplemental Lottery funding in Section 3 of the state budget by the amount of new revenue communities would receive from one half of one year’s telecom tax, estimated to total $13 million statewide. The plan, however, would give communities access to 100 percent of the telecom revenues in fiscal 2010 and future years.
The governor’s overall budget plan is based on the administration’s current analysis of the size of the problem. The administration will be monitoring state tax revenues and the performance of the Massachusetts economy over the coming weeks and months, and they warned that if the state’s fiscal condition deteriorates further additional cuts may be required, which could include revisiting local aid accounts.
• Visit the state Web site for a detailed list of spending cuts, the governor’s message to the public, and the legislation he filed
Local Aid and Finance Sweeping budget cuts spare major local aid accounts
Sweeping budget cuts spare major local aid accounts
Gov. Deval Patrick today announced his plan for dramatic cuts to address a projected fiscal 2009 state budget deficit of $1.4 billion, but he and Lt. Gov. Timothy Murray said major local aid accounts would be spared “for now.”
The plan preserves funding for Lottery, Additional Assistance and Chapter 70 aid, which together account for $5.3 billion in state spending. The Patrick-Murray administration held to their repeated statements that they would consider reducing direct local aid only as a last resort.
The administration announced overall cuts and spending controls of just over $1 billion, including the following steps:
• $755 million in mid-year cuts to the state budget
• $146 million in savings from additional spending controls
• $52 million from voluntary spending reductions in the judiciary, Legislature and constitutional offices
• $100 million in fiscal 2009 savings by extending the state’s pension funding schedule by two years
In addition, the governor’s plan identifies $168 million in additional revenues to the state and relies on drawing another $200 million from the state’s $1.8 billion rainy day fund.
While the main local aid programs were exempted from the governor’s emergency cuts under Section 9C, there were reductions to a number of smaller municipal and school accounts, mainly grant programs and earmarked spending.
The Community Policing program was cut by $5 million and funding for the new Municipal Police Grant program ($4 million) was eliminated. Funding for the Sewer Rate Relief program ($20 million) was also eliminated, although the governor’s message announces that the Massachusetts Water Resources Authority will absorb its share of the loss and not add to rates this year as a result of the cut.
Several education programs were reduced, largely earmarked spending, including $13.5 million from the special education “circuit breaker” program, $1.3 million from METCO, $3.5 million from pre-kindergarten and kindergarten expansion programs, about $300,000 from After School/Out of School and Extended Learning Time grants, and $750,000 from the Chapter 70 hardship reserve.
The Board of Library Commissioners matching grant program ($250,000) was eliminated.
The governor also filed “emergency legislation” to help him close the budget gap. One provision would extend the Group Insurance Commission enrollment deadline from Oct. 1 to Dec. 1. This section may be helpful to those communities that have been negotiating on joining the GIC, but have not yet concluded those negotiations.
The legislation also includes a renewed effort by the administration to close the telecommunications property tax loopholes on poles, wires and equipment. The measure would eliminate the utility corporation tax exemptions for telecommunications companies and make them subject to the same exemptions as other business corporations. If the Legislature acts to close the loopholes during fiscal 2009, the administration estimates that this would free up funds in municipal overlay accounts due to the Appellate Tax Board ruling on poles and wires issued earlier this year. For fiscal 2009 only, the plan would be revenue-neutral for cities and towns, as the administration’s plan would reduce each community’s share of the supplemental Lottery funding in Section 3 of the state budget by the amount of new revenue communities would receive from one half of one year’s telecom tax, estimated to total $13 million statewide. The plan, however, would give communities access to 100 percent of the telecom revenues in fiscal 2010 and future years.
The governor’s overall budget plan is based on the administration’s current analysis of the size of the problem. The administration will be monitoring state tax revenues and the performance of the Massachusetts economy over the coming weeks and months, and they warned that if the state’s fiscal condition deteriorates further additional cuts may be required, which could include revisiting local aid accounts.
• Visit the state Web site for a detailed list of spending cuts, the governor’s message to the public, and the legislation he filed
Written by MMA Executive Director Geoff Beckwith
