BOSTON -- Lawmakers are cautioning cities and towns that the
days of annual hikes in local aid are not only history, but that the opposite seems likely this year.
House Speaker Thomas M. Finneran, D-Mattapan, has appointed
a special committee to study the impact of the state's budget crisis on state aid to cities and towns. State Rep.
Patricia A. Haddad, D-Somerset, was appointed to the committee, and she
said the early outlook is fairly pessimistic.
"Right now, we're talking about a 10 percent cut in local
aid, and that's a lot," she said. "That really is. It's not going to be easy. There will be some communities that have
always planned for this, but others that have not. This will be very bad news for some people."
Haddad said the committee plans to hold hearings around the
state, "trying to solicit ideas -- not only from other (House) members, but from the commonwealth's cities and towns and
school districts, (to) see how they'll be able to adapt when the cuts go into effect. It's
probably not going to be pretty."
That's why Haddad is trying to get the word out early, so
communities can begin preparing for the worst-case scenario.
"We're trying to be as forthcoming as possible with
information," she said. "I have already sent a letter to my communities, warning them. This is not some phantom recession."
Haddad's district includes Swansea, which already has a
budget deficit of $2.5 million, with few easy answers on how to plug the hole.
Town Administrator Greg Barnes said that while 10 percent
might sound small, it will have devastating consequences on the town's finances.
"Ten percent less than what we got this year impacts us
enormously," Barnes said. "The town has no cushion. We have a deficit situation right now. This would only worsen the
crisis."
Barnes said the town had budgeted its accounts assuming that
local aid would continue to increase, as it did when the economy boomed during the late 1990s.
Haddad said she's well aware of Swansea's problems. The town
is split between her district and the one represented by Rep. Philip Travis, D-Rehoboth. Both lawmakers are working
with state Sen. Joan M. Menard, D-Fall River, to come up with a possible solution for
Swansea.
"We're there for them," Haddad said. "We're here to bring
forth legislation that's going to define how they operate for the foreseeable future. But it's very difficult.
"I don't think that anyone got up one morning and decided to
do a bad job on this. The financial situation in Swansea has evolved over a period of time, and, unfortunately, it's come
to a head. Some very strong measures will have to be taken by the people and department
heads to at least stabilize the situation."
Still, Haddad is hopeful they can ward off a takeover of the
town's finances by the state Department of Revenue.
"We're strongly in support of the town kind of picking
itself up by the bootstraps and pulling this off," she said. "I think they can do it. But naturally, this 10 percent reduction
in local aid ... will hurt them in Swansea."
Haddad predicts less impact on the finances of two other
towns in her district, Somerset and Dighton, which she said have budgeted more conservatively than Swansea. But she
cautioned that cities like Fall River and Taunton will feel the pain from a local aid cut.
Not everyone buys into Haddad's downbeat scenario.
Chip Ford, spokesman for Citizens For Limited
Taxation, accused lawmakers of purposely cutting important programs like
local aid to further a pro-tax agenda.
"They always pick the most vulnerable things for cuts," he
said. "They don't cut the waste. It's always where it will have the most pain. It's what they do every time they want a tax
hike."
Ford noted that since 1990, the state budget jumped from $10
billion to more than $23 billion.
"If they can't find a 10 percent cut in a budget that's
increased by $11 (billion) to $12 billion, then something is drastically wrong," Ford said, adding that he expects lawmakers
to use the warnings as an excuse to raise taxes.
"We've been predicting this," he said. "They've doubled the
size of government. Now, as soon as they have a fiscal downturn, they're back to the taxpayers again. If they can't
find waste in a budget they've doubled, they're not looking very hard."
Au contraire, Haddad said.
"I have literally a list of examples to make to people
(from) Citizens For Limited Taxation, (to show) that we are making an honest effort to cut costs," she said. "You also have
to take into consideration the 40-plus tax cuts that were implemented over a five-year period. Those
were real tax breaks that helped real people."
While acknowledging that "everybody wants their taxes to be
lower," Haddad said, it's become obvious that the income tax rollback that voters approved in 2000 is straining the
budget, "especially in light of the increase in Medicaid (costs), growing at 15 percent a year,
and the rising cost of health care."
Medicaid provides health coverage for the poor and disabled.
"As we go more toward the fall season, you're going to see,
dramatically, places where the state has unfortunately stepped up and cut programs," Haddad said. "Groups like Citizens
For Limited Taxation are blind if they don't see the cuts or diminution of services. I know
they think we're not doing enough, but they're not getting the calls from people not
getting the services, or listening to me having to say, 'No, I can't help you now.' "
In some ways, Haddad said, Swansea's problems serve as a
microcosm for the entire state, which is facing a loss of up to $2 billion in tax revenue. Correcting it will require a
multitude of possible solutions, and not just spending cuts, she said.
"You can't get by without cutting. Adding some fees is
another piece. Then there are revenue bonds. The town has to agree to that, and make their own decisions on that. Then
there's a possible debt service override and Proposition 2½ override. There are a lot of things on
the table."
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The Patriot-Ledger
Monday, February 4, 2002
House Speaker Tom Finneran and several local House members
are trying to get the word out to local officials that the state budget woes aren't a political game.
It wouldn't matter if acting Gov. Jane Swift changed her
mind on reducing the state income tax - which she won't do. The income tax reduction in fiscal 2003 amounts to just $230
million. Granted it's a big chunk of money, but it represents just 10 percent of the state's
budget shortfall, now estimated to be around $2 billion.
Swift wants to continue adding new money to elementary and
high school education, but Finneran says that's not in the cards.
Finneran is not running for governor, so he doesn't have to
look for sweeteners to please the public. For all his faults as a legislative leader, Finneran's efforts to keep the state
budget in a manageable range over the last few years are a key reason that rainy day money is there to
be tapped.
There were signs in Rockland this week of just how difficult
it will be to convince local leaders of how dire the budget crisis is. Some selectmen blamed the state for Rockland's
growing financial crisis and threatened to "pack buses" to drive to the Statehouse and be
heard. Their frustration is understandable, but their comments suggest they don't fully
understand the extent of the problem at the state level.
The money isn't there to continue funding local aid and
education at levels the cities and towns have come to expect. While the recession has worsened due to unexpected factors -
especially the aftermath of the Sept. 11 attacks - it has been evident for some time. No one's
crying wolf; it's real.
It is true that the state has chronically underfunded some
programs, such as special education, and that's unfair to the cities and towns. At the same time, local communities have
become accustomed to state aid without looking to the future and contemplating a day when
the spigot will offer a trickle instead of a bucketful of cash.
When the speaker says cuts of 10 percent are not out of the
question, local budget-makers need to take him seriously.
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