Labor bills can have major fiscal impact on municipalities

The MMA is tracking more than 350 bills related to labor and personnel matters this legislative session. As legislative committees schedule bills for hearings, the MMA is asking legislators to consider the impact of each bill as well as their potential collective effect on the municipal workforce and budgets.

Bills in the labor and personnel arena have a large impact on personnel budgets, which account for 70 to 80 percent of municipal operating budgets. Small changes in one legislative session – and cumulative changes over multiple sessions – take a toll on personnel management and budgeting and can significantly affect local service delivery.

Several bills filed this session would either credit employees for service or include new members under the governing statute for public employee retirement (under M.G.L. Ch. 32). Any one of these bills would increase the unfunded liability for public employee pensions, which is already twice that of the state and reaches into the billions.

Similarly, laws that mandate retirement benefits or continuation of pay for injured or sick employees, based on a presumption that the injury or illness occurred on the job, have passed without consideration of data showing the incidence among, and specific impact on, workers in Massachusetts. Such laws can cost individual municipalities hundreds of thousands of dollars and affect other areas of law and municipal governance.

Many bills are not “costed out” and are passed without an understanding of their full financial impact. Rep. Natalie Blais is sponsoring a bill (H. 2674) that would require a fiscal note to accompany any law signed by the governor showing the impact on local government revenue and expenditures.

The MMA maintains that a good understanding of how legislation will affect municipal governance, including personnel budgets, is an important exercise in order to ensure the fiscal health of local governments and essential services for citizens, and to avoid placing a heavier financial burden on local taxpayers.