The economic recession that has hit our nation is having a dramatic impact on the ability of our cities and towns to deliver even the basic services residents of the Commonwealth rely on. As state revenues continue to plummet, the amount of money the state can send to communities in the form of local aid is being cut as well – a situation that has already happened once this year, and may well happen again.
The budgets proposed by the Governor and the House both included large cuts to local aid – and given the most recent revenue projections for the upcoming year, the Senate budget may well be even worse. Although most of us in the Legislature are deeply committed to allocating as much funding for local aid as possible, the simple truth is that cuts to local aid – and nearly every other program in the budget – are inevitable this year.
This is a hit every resident of the Commonwealth will feel. Local aid helps pay for our schools, so our children can receive a quality education. It helps pay for our police and firefighters, who help keep our homes and streets safe. Local aid pays for trash removal, sewer systems, street cleaning, and all of the other programs and systems set up to make our communities safer, healthier and more pleasant places to live. Reduce local aid, and you’ll see a reduction in all of those services, and more.
At the same time as local aid is being cut, costs are going up for many cities and towns. Healthcare costs continue to skyrocket, and services that could be delivered jointly with other communities are instead being performed separately – at greater cost – by each town. The combination of falling revenues and increased costs puts our cities and towns in an extremely difficult position.
This week, the Special Commission on Municipal Relief, of which I am a member, issued its final report. This comprehensive report contains a wide-ranging list of recommendations for ways our state government can offer relief to our local communities, from programs to encourage reforms and regionalization efforts to additional opportunities to raise much-needed revenue. Not every recommendation will benefit every town, but taken as a package they will offer a “Municipal Relief Toolkit,” for cities and towns to use as needed to reduce costs, increase efficiency, and raise revenue.
These tools include provisions to encourage joint purchasing and provision of services and the merging of administrative functions among adjacent communities, as well as regionalization incentives, in the form of funding support for feasibility studies, planning, and transitional aid for communities looking to regionalize services. These ideas have the potential to drastically increase efficiencies in local service delivery.
The steep rise of healthcare costs is another major problem the state government can help cities and towns address. The Commission recognizes that there is no “one size fits all” approach that works for every community. Instead, the report recommends the implementation of a system and schedule that would help municipalities achieve an acceptable level of affordability for their health care plans in whatever way would work best for that community.
Finally, the Commission report recommends that the state government approve a series of “local option” taxes that cities and towns can use – at their discretion – to raise additional revenue without over-relying on the property tax or state aid. These local option taxes include expanded room and meals taxes, as well as finally exempting the antiquated telecommunications loophole, which is currently preventing municipalities from collecting property taxes on land used by telephone companies. Removing the telecommunications exemption alone could raise cities and towns $52 million dollars. These are a few commonsense ways to help our communities pay for vital local services with a minimal impact on consumers.
Municipal relief is an area where the legislature and the Governor are closely aligned. Many of these recommendations are also contained in Governor Patrick’s “Municipal Partnership Act II,” and both the Legislature and the Governor are eager to move quickly to enact these much-needed reforms. These bills will be heard by the Committee I co-chair – the Joint Committee on Municipalities and Regional Government – the second week of May, and we hope to move a bill to the floor for a vote soon thereafter.
Our cities and towns need help more now than ever before, and the state government is in a position to offer that help. Now is the time to implement meaningful reforms and offer sustainable revenue solutions.