Municipal budgets in Massachusetts growing more dependent on local money
BOSTON — Over five years ending in December, the Legislature passed 97 new laws with a "significant financial impact" on cities and towns, and over that same period the percentage of municipal budgets funded by state aid has dipped, Auditor Suzanne Bump found in a comprehensive study.
From fiscal 2011 through fiscal 2015 state aid increased by $467 million to a total of $5.1 billion, but over that same period state aid slipped as a percentage of municipal budget sources from 21.14 percent to 20.22 percent, according to a report on the study that was released Wednesday.
Taking a longer view, state aid to cities and towns has dropped from more than 27 percent of municipal budgets in fiscal 2003, according to the report. The local tax base made up the bulk of the difference, accounting for just over 50 percent in fiscal 2003 to more than 57 percent in 2015. Other local non-tax receipts accounted for much of the remaining revenues.
"Further, when looking at the percentage change in municipal revenue sources for the entire period between FY03 and FY15, the percentage of municipal tax levies increased by 71.34 percent and local receipts increased by 56.62 percent, however, state aid only increased by 12.87 percent," the report said. Additionally, between fiscal 2003 and fiscal 2014, total municipal spending increased by $6.76 billion, or 45.9 percent.
Bump's report arrives as the House Ways and Means Committee is preparing its budget and the Senate is set to debate an education bill on Thursday that would tie increases to a cap on public charter school enrollment to a greater investment by the state in public education.
"On behalf of communities across Massachusetts, we applaud Auditor Bump for recognizing the serious fiscal challenges that our cities and towns face," Massachusetts Municipal Association Executive Director Geoff Beckwith said in a statement. "Unfunded mandates increase pressure on the property tax and force local officials to reduce funding for other vital local services, including education and public safety."
Beckwith is lobbying the conference committee working out the particulars of a public records reform bill, aiming to decrease the burden it might place on municipalities, which house a variety of records of interest to the public on police matters, real estate development and restaurant inspections.
While Bump's office arrived at no specific cost from the 97 statutes passed from 2011 through 2015 that have a significant financial impact on cities and towns, each one requires municipalities to expand existing services, employ additional personnel or increase local expenditures, according to her office.
Bump highlighted laws that require schools to obtain fingerprints for background checks on employees and volunteers as well as a 2014 law establishing early voting, which is administered by cities and towns.
The 200-member Legislature often concerns itself with other local matters, passing town charter re-writes endorsed by town governments and doling out additional liquor licenses.
Education, the biggest local expenditure, also received the most attention from state lawmakers, who passed 23 acts in five years imposing a financial impact on cities and towns, according to Bump.
Bump recommends legislation requiring state agencies to file a municipal impact statement when altering regulations. Another legislative change endorsed by the auditor would give her Division of Local Mandates the authority to develop reports on how proposed legislation would impact local finances. According to the auditor's office, the division can review statutes already in place but is prohibited from researching the impact of most pending bills.
Existing law passed as part of the 1980 ballot initiative that generally limits local tax levy increases to 2.5 percent annually also bars the state from imposing direct cost obligations on municipalities without state funding or local adoption. According to Bump's office, communities aggrieved by an unfunded mandate can petition the Superior Court for an exemption.
The report also quantifies the property valuation for tax purposes, including non-real estate "personal property," spread throughout the state's 351 cities and towns, which reached a zenith of close to $1 trillion in fiscal 2008.
The total municipal assessed value reached $991,718,349,190 in fiscal 2008, and after a big dip, came back within $23 billion of the fiscal 2008 total in fiscal 2015.
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