The Massachusetts State House

Legislative leaders announced Friday that they intend to cut up to 4% from local aid next year.

There are two pools of local aid:

  • Chapter 70 – which is aid specifically for education, which cities and towns use to supplement their school budgets. This pool is roughly $4 billion dollars per year.
  • Unrestricted local aid – which towns generally use to supplement either education or public safety, like extra police. This pool is roughly $1 billion dollars per year.

You can get a sense of how much local aid your town gets from DOR.

The entire state budget last year was about $30 billion. So this local aid is only about 16% of the total state budget. The 4% cut in these two accounts represents a savings for the state of only 0.6% of the budget.

But the impact will be tremendous.

Local aid to cities and towns was cut last year by 12%, or $724 million.  This year, towns are already facing steep increases in health insurance costs. Combined with these local aid cuts it’s likely many towns would have to lay off more teachers, police and firemen. These kinds of cuts fall disproportionately on the poorer towns, because local aid comprises a larger percentage of their budgets.

While the state cut 12% from local aid last year, it cut only 4% from the overall state budget.

These local aid accounts are used to pay for the kinds of core services that impact people every day – teachers, police etc.  So, cuts fell disproportionately on core services – while state level programs such as the courts, accounts for legal assistance, DCYF had much smaller reductions.  This is because the legislature – composed disproportionately of attorneys – restored funding to the things that affect them most. Originally last year’s budget for the courts was to be cut by 11%, but the Legislature restored most of that funding.

DeLeo, Murray and Patrick

For 2010 there are three budget proposals going:

  • The Governors budget proposal.
  • The Democratic Leadership’s Proposal – Rep. DeLeo and Sen. Murray
  • The Republican Leadership’s “Local Aid Resolution”.  All 16 House Republican legislators, and 19 additional Democrats.

The Governor’s budget proposal would level fund state aid, and close the $2.75 billion budget with:

  • $590 of new taxes
  • $800 million of cuts to state programs
  • $1.4 billion from federal stimulus money
  • $500 million from the ‘rainy day’ fund

The House leadership proposal recommends the 4% cut to local aid.  Their statement Friday was just a terse 2 paragraph statement that the cuts were coming, so towns could start planning their budgets.

Their statement comes two weeks after the Governor announced his budget plan. We don’t have details on how their proposal differs from the Governor’s. If they are cutting $200 million from local aid, presumably it’s going somewhere in the overall state budget. These things are done behind closed doors, so we won’t know what they are going to restore until they release it. I expect they will cushion the blow for things that affect lawyers – of course.

Rep. Bradley Jones

The Republican leadership has been circulating a “local aid resolution” where legislators essentially promise to level fund local aid. Their plan so far isn’t any more detailed than that – and it sure is politically expedient. They come out in support of local aid but don’t have to say what they would cut elsewhere. They are already hammering the Democratic leadership on this. I hope they take some political risk and come out with something more specific.

There are some actions you can take – like calling or writing your legislator to sign on to the “Local Aid Resolution”.

I’ll try to get a list of who is signed on to it.

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