MMA letter to Legislature urging prompt consideration of reform package

Dear Legislator,

City and town officials are on the front lines of our economy, and know first-hand the negative impact of the fiscal crisis that has gripped the Commonwealth and the nation.

During the last recession, local aid was cut up to 20 percent for most cities and towns. The impact is still being felt, as local aid and education funding for dozens of municipalities is still below fiscal 2002 levels. In fact, when adjusting for inflation, local aid is still $566 million below fiscal 2002 amounts. Cities and towns have been in fiscal distress for the past seven years, curtailing services and increasing reliance on regressive property taxes. The current economic downturn promises to make a bad situation much worse.

The plain fact is that local aid reductions will translate into drastic cuts in municipal services and even deeper fiscal hardship, distress and pain. Cutting local aid means cutting money that funds teachers, police officers, firefighters, public works employees, librarians and many more critical workers. Cities and towns will be forced to eliminate positions and lay off key workers, and vital public safety, municipal and school services will decline while local reliance on property taxes will spike. Leading economists are calling on our federal and state governments to increase investment in local government for a reason – cities and towns deliver the essential services that are vital to our economic competitiveness, business growth, and the state’s long-term prosperity. We support your leadership efforts to secure major federal relief, and it is imperative that all levels of government work together as partners to help Massachusetts withstand the coming economic storm.

Cities and towns need powerful tools and resources to reduce the recession’s impact on municipal services, ensure that municipal personnel levels are adequate to deliver these services, and protect local taxpayers from even more increases in the overburdened property tax.

As we said in our detailed letter of January 5, before acting on legislation that would expand 9C budget-cutting powers to Section 3 of the General Appropriations Act, local officials throughout Massachusetts call on our state government to commit to immediate passage of strong and effective reforms that will be meaningful enough to protect services, minimize layoffs, and avoid higher property taxes. THE MMA IS CALLING FOR LEGISLATIVE ACTION TO IMMEDIATELY ENACT ALL FOUR OF THESE MAJOR REFORMS:

1. Immediately closing the telecommunications tax loopholes that give the telephone companies a tax break of nearly $80 million at the expense of cities and towns and local taxpayers;

2. Empowering cities and towns to modernize their health insurance plans outside of collective bargaining – this would simply give local officials the same power the state has to update health plans, and would save more money, more quickly and more efficiently than any other option (including joining the state plan, which doesn’t work for many municipalities);

3. Fixing the flawed charter school funding scheme that harms school districts all across the state – in the short term, the state must at least provide a circuit-breaker to ensure that future losses to charter schools will not consume a greater percentage of the Chapter 70 aid a city or town now receives; and

4. Allowing local option taxes, including a local meals tax and an increase in the local hotel-motel tax, so that communities would have an additional local revenue source beyond the property tax.

All of these reforms are necessary and essential to protect cities and towns during the extraordinarily difficult days ahead. There is no one-size-fits-all solution, which is why all of these reforms are necessary to give municipalities the management authority and resources they need to navigate through the recession. Without these reforms, communities will experience greater hardship, vital municipal and education services will suffer, the property tax burden will skyrocket, and our overall economy will be weaker.

The time has come to bring reform and change to Massachusetts, reform that is necessary to protect cities and towns and local taxpayers from great harm during the hard times that loom ahead.

Thank you for your consideration and your swift action on these reform priorities.

Sincerely,
Geoffrey C. Beckwith
MMA Executive Director