Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Dear Legislator,
Cities and towns are facing widespread fiscal distress, triggered by the national recession, a steep decline in local revenue capacity, and the record $724 million local aid reduction passed last summer. House 2, the Governor’s fiscal 2011 budget proposal, level-funds the main municipal and school aid accounts. This is a vital first step toward stabilizing local government finances and the essential services that communities deliver to the residents of Massachusetts.
We urgently ask you and your colleagues in the House and Senate to adopt a Local Aid Resolution using the local aid levels in House 2, sending an early signal to cities, towns and taxpayers that the major local aid accounts will be protected in the fiscal 2011 budget. Consensus Cherry Sheets would be a major help to cities and towns as they work to pass their own budgets over the next few months, a budget season that will be dominated by very challenging and painful decisions on municipal and school services and programs, personnel and employment levels, and overly high reliance on the property tax.
Municipalities are facing large budget deficits as they try to balance local budgets for fiscal 2011. The record local aid cuts in fiscal 2010 were deeper than at any time in state history, and the recession has eroded key local revenues. Cities and towns have imposed sweeping layoffs, furloughs and salary freezes, drained their reserves, adopted local-option taxes, slashed core services, and now rely on the property tax more than any time in the past 25 years. Municipal leaders know what you are experiencing as you struggle with the state’s fiscal crisis, because communities face even greater problems, in scope and magnitude.
A RESOLUTION TO LEVEL-FUND LOCAL AID AND PROTECT CITIES, TOWNS AND TAXPAYERS: It is vitally important that you protect municipal and school aid and pass a timely Local Aid Resolution so that local leaders can stop their fiscal freefall and stabilize services that the taxpayers of Massachusetts need and deserve.
The MMA supports level funding and no further cuts to the Unrestricted General Government Aid account in Section 3 of House 2. Unrestricted General Government Aid, the primary municipal Cherry Sheet account, has been cut by a staggering $377 million, or 29 percent, since the beginning of fiscal 2009. This consolidated account includes the formerly separate accounts for Additional Assistance and Lottery distributions, and is now funded by a combination of state tax collections and local Lottery revenues (with the overwhelming portion coming from the Lottery). The announcement that Lottery revenues will outpace current estimates for both fiscal 2010 and next year is good news. Lottery proceeds are now expected to exceed the original projection for this year by $20 million and exceed the fiscal 2011 estimate in the Governor’s budget by $10 million. If Lottery revenues continue to exceed expectations, we request that there be a supplemental distribution to give communities access to their local Lottery funds.
The MMA supports level funding and no further cuts to Chapter 70 school aid distributions, and the appropriation of adequate funds for all school districts to remain at the foundation level, as the Governor has done in House 2. Local officials appreciate that level-funding of aid to each city, town and school district requires the appropriation of additional funds, as proposed by the Governor in House 2.
The MMA supports level funding and no further cuts to reimbursements for student transportation in regional school districts, which would cover only about half of the state’s share, and the payment-in-lieu-of-taxes (PILOT) program. The MMA also supports the Governor’s proposed $135 million in funding for the special education “circuit-breaker” program. This amount is estimated to cover about 35 to 40 percent of eligible costs. The statutory state share is 75 percent.
KEY REFORMS NECESSARY FOR FISCAL SECURITY: In addition to protecting local aid from further cuts, cities and towns also need major changes and reforms in state law to address immediate and long-term structural cost factors that are unsustainable. These include:
Health Insurance Plan Design Reform. We ask that you move quickly to approve H. 2509, legislation to give cities and towns the power to update municipal health insurance plans outside of collective bargaining, which is what state government does, and would save $75 million to $100 million statewide. Cities and towns have worked hard to control health insurance costs as best they can, but they operate under a state law that reflects a double standard. Municipalities are required to negotiate and receive union approval to implement changes in their health insurance plans, while the state has exempted itself from this requirement, and implements basic decisions on health insurance outside of collective bargaining. This double standard must end, and we ask the Legislature to give cities and towns the same authority as the state in designing health insurance plans for employees. The bill has been written with a guarantee that every local employee would receive health insurance plans that are at least as generous as the plans that state employees receive. Plan design authority is the only effective reform to bring fiscal relief to all cities and towns, and it is urgently overdue. H. 2509 will provide equity and relief for local taxpayers, protect vital municipal and school services, and preserve the jobs of teachers, police officers, firefighters and other local workers.
Pension Funding Relief. We ask that you move quickly to approve legislation filed by the Governor (H. 4439) to allow cities and towns to extend local pension funding schedules under carefully controlled circumstances. This important bill would allow communities to extend their pension funding schedules by 10 years, to 2040, to protect local taxpayers from unnecessarily high assessments during this time of fiscal crisis – unless the funding schedules are extended, market losses due to the recession will trigger steep increases in annual pension payments and force budget cuts to key municipal and school services.
Avoiding Quinn Bill Unfunded Mandates. We ask that you move quickly to approve legislation filed by the Governor (Section 8 of H. 4444) to clarify that cities and towns are NOT responsible for paying the state’s share of the police career incentive program. Police unions are in court trying to force cities and towns to make up the $48 million that the state cut from its share, which would represent an unaffordable new unfunded mandate on municipalities.
WORKING TOGETHER TO PROTECT LOCAL AID AND RECOVER FROM THE RECESSION:
It is more important than ever that communities and the Commonwealth work together as partners. Cities and towns are depending on the Legislature to protect local aid as the Governor has, and urgently need key reforms to restore fiscal stability and recover from the recession. These steps will allow cities and towns to tame budget busters, protect essential services, save taxpayer dollars, and save the jobs of teachers, firefighters, police officers and other local government workers. These areas of partnership will benefit all of the residents of our state, and they are key steps to an early end to the recession, and a new beginning for economic prosperity for Massachusetts and local taxpayers.
Thank you very much.
Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA