Municipal priorities are where the action is

From The Beacon, February 2013

The MMA Board of Directors has set several major policy goals as top priorities for 2013. These are vital action items that are important to every city and town: winning increases in unrestricted municipal aid and Chapter 70 funding to support local budgets and protect core services; winning a $100 million annual boost to Chapter 90 to invest in the repair and maintenance of local roads and bridges; securing full funding for the Special Education Circuit Breaker; and advancing real and meaningful OPEB reform to address the largest budget buster looming on the horizon.

Taken together, these top priorities would provide essential resources that all our communities need today and would foster economic growth and fiscal stability for decades to come. Not coincidentally, these issues are already the focus of a great deal of attention and action just one month into 2013.

The governor has kicked off the fiscal 2014 debate with a spending plan that provides for modest growth of $31 million in unrestricted municipal aid, with a few wrinkles, including a new formula and some not-yet-determined conditions on who will receive this aid in the future. The MMA will be consulting with local officials regarding the efficacy of this formula proposal, and will be crystal clear that it is a bad idea to have the state begin restricting or setting “incentives” for local aid. Unrestricted means unrestricted.

While local officials are glad that municipal aid would increase under the governor’s budget, his proposal would raise direct municipal aid by 3.4 percent, even though state tax revenues (before any changes or increases proposed by the governor) are slated to go up by 3.9 percent next year, so local aid wouldn’t even keep pace with the state’s normal revenue growth. There is room for improvement.

The governor has proposed an impressive $226 million increase in Chapter 70, and does so via a number of enhancements to the state-set school funding formula. Without these changes, the state was obligated to increase Chapter 70 by $167 million next year. Thus, the administration is proposing to add $59 million more than is required. That’s a good start, and the next step is to analyze the formula changes to make certain that they do not contain any unforeseen challenges for cities, towns and school districts. One concern is that a number of districts are being hit with unusually large increases in their minimum required local contribution, a big problem for cash-strapped localities.

In recent years, the Legislature has taken bold action to increase funding for the Special Education Circuit Breaker program, and for a few months in fiscal 2013 we had achieved full funding. Unfortunately, the administration used “9C” budget powers to trim $11.5 million from the account last December, and would level fund it for fiscal 2014, leaving the program underfunded by $15 million. Local officials will work closely with key House and Senate members to restore these funds.

The most dramatic action to date is the Patrick-Murray administration’s impressive $13 billion, 10-year plan to modernize every aspect of our transportation system and invest in our future. This sweeping package would bring Chapter 90 up to $300 million a year and index it to inflation over the next decade, ensuring that cities and towns will receive desperately needed funds to repair and maintain local roads and bridges. The plan would provide $68 million more each year to regional transit systems across the state, fund hundreds of important projects, invest in trains and buses, and provide for needed expansion.

The MMA is part of a broad coalition of civic and business groups applauding and supporting the governor’s plan. This is just the type of major investment that Massachusetts needs to strengthen our economic recovery and ensure our competitiveness for years to come. As our members recognized at our Annual Meeting on Jan. 26, when they overwhelmingly passed a resolution supporting transportation finance reform (including Chapter 90, of course), the state must raise the revenues we need in order to pay for a modern transportation system. This is a wise investment that will boost our economy and bring jobs to every corner of the state.

The governor has proposed a major tax package to fund his transportation plan and invest in education. The MMA and local officials will work closely with the administration and the Legislature during this session to support the revenues that are needed, especially when the funds are invested in cities and towns and community needs.

In terms of long-term reform, the state’s special commission on OPEB (primarily retiree health insurance) issued a report in December that recommended some very good changes that would bring real savings over 30 years. This was a great first step. But the report, which the governor has endorsed, would only provide small savings over the next decade and would strip cities and towns of existing powers to control costs (see related article, page 6), leaving local leaders powerless to control an expected 50 percent spike in local OPEB expenses over the next 10 years. The MMA will be working to support the good parts of the report and to fix the negative aspects, so that the state can enact legislation that provides real and essential savings for taxpayers now and in the future.

Just 30 days into the new year, it’s clear that cities and towns are in the thick of the action. Local aid, school funding, transportation investments, revenues and reform are all issues that will make a difference now and far into the future. The decisions that will be made on all of these priorities will shape Massachusetts for years to come, and local officials must be in the center of the debate.