The MMA recently released the following article regarding the statewide concerns for municipal budgets next year. I found it interesting and wanted to share it with the folks who subscribe to my blog. It describes what many Massachusetts communities are dealing with at this time. Of course, West Boylston has its own problems. Thought you would be interested in this reading.
Leon A. Gaumond Jr.
Town Administrator
Budget writers in cities and towns statewide are looking at another tough year of closing gaping budget shortfalls in fiscal 2009, and with a weak revenue growth forecast for next year, state officials are expressing similar concerns.
The first tax estimate for fiscal 2009, released by the governor’s budget chief, Leslie Kirwan, on Oct. 30, projects state revenue growth of only 3.8 percent over expected fiscal 2008 collections, an increase of $762 million.
Although tax collection growth has averaged almost 7 percent over the past five years, concerns about the state and national economy are reflected in the cautious forecast for fiscal 2009.
Growth in basic government costs, mainly related to health care and other uncontrollable fixed costs, are expected to outpace revenue by a wide margin next year, leaving hard-to-close shortfalls.
As Kirwan drafts the governor’s budget plan, which is due in mid-January, she is pegging the state’s structural shortfall for next year at $1.3 billion, and possibly higher.
At the Nov. 13 meeting of the Local Government Advisory Commission, local officials told Gov. Deval Patrick that structural budget shortfalls are expected to be widespread in municipalities again next year, leaving cities and towns with few options other than cutting services or asking voters to approve property tax increases.
About 70 cities and towns placed override questions on local ballots to help balance fiscal 2008 municipal and school budgets, asking for $112 million in new levy capacity. Less than half of the efforts were successful, adding $33 million to local levies.
Local aid payments to cities, towns and school districts are a major part of budget discussions at the state and local level. The Department of Education has asked for an increase in Chapter 70 school aid of $193 million next year to fund the revisions to the law approved over the past two years, and the Massachusetts School Building Authority is scheduled to receive an additional $68 million from state sales tax collections. Other accounts, including the special education “circuit breaker,” are expected to need additional funds to remain fully funded.
The biggest challenge to state and local officials for fiscal 2009 is fixing the Lottery-funded municipal aid program (Additional Assistance and Lottery distributions) that provides $1.3 billion to help balance local budgets and ease over-reliance on the property tax. The Lottery shortfall for fiscal 2008 is expected to exceed $100 million, with little hope for recovery in fiscal 2009.
With widespread fiscal distress at the local level, and limited revenue-raising options available to cities and towns, the MMA and local officials are asking Gov. Patrick to include a major increase in municipal aid when he files his fiscal 2009 budget bill.
At the Nov. 13 meeting with the governor, the MMA and municipal officials called for the state to adopt a state tax revenue-sharing schedule to ensure that municipal aid payments can grow as the economy and state tax collections grow, making municipal aid amounts predictable for state and local budget writers.
| 
