Commonwealth budget preview

The Massachusetts Budget and Policy Center (Mass Budget) has a preview of the Commonwealth's 2012 budget shortfall at this link.
Mass budget also has a preview of the effect of the Commonwealth's budget shortfall on Chapter 70 school aid at this link

There are going to be significant cuts to local aid and school aid this year.
There are likely to be consequences for our town's budget as a result.
What do you think are areas where the town can reduce costs? Tell us in comments.
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Dartmouth proposes library MAR change

Dartmouth has suggested changes to the Municipal Appropriation Requirement (MAR) funding formula used by the state Board of Libraries when considering library certification. This letter from Mr. Cressman to the Massachusetts Municipal Association (MMA) lays out the changes that are proposed.
The MMA sent the email, and will follow up with a letter, to the Executive Office of Administration and Finance asking that the proposal to change the Library Municipal Appropriation Requirement (MAR) be included ...


... in House 1 (the Governor's budget) or any municipal relief bill that the governor might file this month.
With many municipalities struggling with their budgets, a substantial number of cities and towns are in a similar circumstance. The funding problem is actually sort of a "down in the weeds" issue, but in a nutshell, the yearly MAR is the average of the prior three years appropriations or the MAR whichever is higher raised by 2.5%. The result is that once a town does not achieve the MAR, that town must play catch up which is difficult or impossible in the current environment. Click here to read on!

Mass Municipal Association urges action on municipal health insurance

The Massachusetts Municipal Association (MMA) is calling on municipal boards and citizens to help change the way that public employee health insurance plans are administered by municipalities. The legislation they are backing would allow municipalities to negotiate and design insurance plans in the same way that the state can with state employees. The MMA estimates that the plan would save taxpayers $100 million a year.
You can read the bill here, http://www.mass.gov/legis/bills/house/186/ht02pdf/ht02509.pdf .
The MMA has prepared a fact sheet about the proposed legislation which can be found at this link, http://pokanoketlax.webs.com/PDF%20Docs/plan_design_fact_sheet_mar10.pdf
Mr. Beckwith, the MMA's Executive Director, has sent this letter to legislators urging them to act ...

... and pass this important reform. His letter concludes,

This is a very focused and moderate proposal. Under the bill,
municipalities would still negotiate any changes in the employee-employer premium share, giving municipal unions more bargaining authority than state unions. Municipalities would be able to modernize the health plan design outside of collective bargaining, with a guarantee that all municipal and school employees would still have health plans that are the same or better than what state employees receive, meaning no municipal plan could have higher co-pays or deductibles than the state.

Add your voice by contacting your local Representative or Senator, you can find their contact information here, http://www.mass.gov/legis/city_town.htm
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September is Massachusetts Regionalization Month

Governor Patrick has declared September as Massachusetts Regionalization Month proclaiming that;

351 cities and towns deserve to be informed of local resources and tools;

Regionalization, or sharing of local services, can improve the efficiency and delivery of local services;

The Massachusetts Executive Office of Administration and Finance, the Massachusetts Department of Revenue's Division of Local Services, and regional organization and planning agencies are addressing this issue and informing

Massachusetts municipalities of the benefits of sharing local services;

In some communities, it may be appropriate for cities or towns to partner with their neighboring community to merge services in order to maintain them
Regionalizing municipal services is an untapped resource ...

... that can save millions for the Commonwealth's taxpayers if carried to its full extents.
One area where regional services are taking hold is E911 call centers. On September 3rd, Lieutenant Governor Murray announced almost $8 million in grants to help municipalities implement regional 911 dispatch services. California has four 911 dispatch centers, Massachusetts with 1/10 the population has hundreds.
Public health is another area where regionalization could save municipalities. Boston University's School of Public Health has begun a project to help towns and cities identify areas for co-operation and savings. There is a working model of the regional approach in the Nashoba Associated Boards of Health. Fourteen towns in central Massachusetts have been sharing the costs of providing Board of Health services since 1931.
Communities in the South Coast of Massachusetts are using the regional planning agency, Southeastern Regional Planning and Economic Development District (SRPEDD), to aggregate purchases of asphalt, road sand and salt, and other commodities in an effort to drive down costs.
Other areas where I think regional services could help to reduce costs are schools, conservation, planning, public works, policing, building inspection, animal control, health insurance, and many other areas. Some that you wouldn't expect such as Acushnet and Mattapoisett sharing a Town Accountant.
Local boards, agencies and employees hate the idea of regional services, so I think this is a change that must be driven by the taxpayers or by the mayors, managers and Selectmen.
Do you have any examples of regional solutions that are working for municipalities?
I would like to know what they are. Let me know in comments.
Click here to read on!

Special Town Meeting tonight 7PM

A Special Town Meeting will be convened tonight at 7PM at the new Dartmouth High auditorium to consider acquisition of a small parcel of land at the end of Rogers Street and the adoption of a local .75% tax on restaurant meals and a local 2% increase on the room tax.

See you there!
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Meals tax option in the news

The Fall River Herald News has an article today about the stance that local towns are taking on the local option to increase the meals and room taxes. Some local towns are passing on the opportunity to increase local revenue to offset sate aid cuts.
Dartmouth will have a Special Town Meeting on August 25th to decide whether to adopt the local option of .75% on restaurant meals and 2% on rooms. The state has levied a 1.25% increase in meals tax raising the total tax to 6.25%.
Leaders in other towns have considered this increase ...

... a burden on local businesses but this tax is a pass through for businesses. The restaurant will not pay additional tax but the consumer does.
Many of the local towns don't have many restaurants and the added tax doesn't generate much revenue for them. For instance, Freetown would see an additional $55,000 by adopting the local tax, whereas Dartmouth would realize $495,000.
The state has cut Chapter 70 education aid by 2%, which is about $200,000 for Dartmouth, and will not pay all of their portion of Quinn Bill police salary incentive which leaves Dartmouth an additional $163,000 to pay the difference. Other categories of state aid were also reduced. I think this gives the town a way to maintain the revenue to keep our services. What are your thoughts?
Let your town meeting members know as well. A list of town meeting members can be found here. It's not up to date but it's the best I could find.
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Special Town Meeting warrant for August 25th

The warrant has been set for the Special Town Meeting to be held on August 25th at 7PM at the Dartmouth High school auditorium. The warrant contains three articles (link here).
The first article is to appropriate $9,500 from the Waterways Management Enterprise to purchase about 1/4 acre ...

... near the Rogers Street property owned by the town.
Articles 2 and 3 are to accept the local option taxes on meals (.75%) and hotel rooms (2%). I have previously written about these taxes here.
The Finance Committee voted 6-0 to recommend the appropriation for the property and the room tax. The Finance Committee voted 5-1 to recommend the meals tax.
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Select Board calls a Special Town Meeting

The Select Board voted last night to convene a Special Town Meeting to consider the adoption of local option taxes on meals and rooms. The Special Town Meeting will be held on August 25th at 7PM at the Dartmouth High School auditorium. Please note that the Town Meeting will be at the new high school not the middle school.
Curt Brown's article in the Standard Times can be found at this link.
I have previously posted my thoughts here. I don't think that this tax is the best solution to the problems facing the state and its municipalities. Essentially the legislature passed the responsibility ...

... for raising revenue to the towns. The sales tax surcharge is a regressive measure. I would have preferred that the legislature raise the income tax to pay for the programs to which they have committed. Perhaps it is better to let local communities decide. What do you think?
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Local option taxes

Massachusetts has passed a couple of local option taxes that allow municipalities to levy a surcharge on restaurant meals and hotel rooms. The state has also put a surcharge on restaurant meals of 1.25%. Cities and towns have the option of adding an additional .75% to the state surcharge. The tax will take effect on October 1 and the state will begin collecting their portion. In order for the town to levy their percentage, the local legislature, the Town Meeting in Dartmouth's case, must vote to accept the section of Mass General Law (Chapter 64L section 2a) that allows the tax. See the bulletin from the Department of Revenue (DOR) here that details the steps needed. The DOR has also issued a spreadsheet...

... that estimates the revenue that could be raised by the town in FY2010. The spreadsheet in MS Excel format is at this link.
The meals tax is estimated to net about $440K for the town while the hotel room tax would raise about $33K per percentage adopted. The town can levy up to 2%.
A special Town Meeting would have to convene before Aug 31st and vote to accept the new tax statute. The Select Board has scheduled a hearing on Aug 3rd to here from the public on the new tax and to deliberate on calling for a Town Meeting.
hat tip to ML Nunes for the information from the DOR
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State House committee on local relief meets in Fall River

The Herald News has this article today about the meeting of the Joint Committee on Municipalities and Regional Government. The committee heard from local leaders yesterday on the measures that they would like to see enacted to help local governments. I like the idea of making it easier for local governments to join the state GIC insurance and hate the idea on funding local aid based on the Chapter 70 formula espoused by Fall River Councilwoman Viveiros. Mayor Lang of New Bedford pitched the idea of state aid for public safety services. I think we have more work to do with regional approaches such as regional dispatch before asking the state to fund our local fire and police.

And here is the rest.
Click here to read on!

Governor's forum online

Via Blue Mass group, "Jean MacCormack, Chancellor of UMass Dartmouth, wants to hear from you." Go to this site, www.mass.gov/forum, to leave your input about the state budget, transportation, pension and ethics reform.
Speak up and speak out! Here's a chance to be heard. You can make a difference.

Queue up the naysayers in comments!
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State Senate passes sales, telecomm, and local meals tax

The state Senate passed budget amendments that incorporate a sales tax increase from 5% to 6.25%. Link to Blue Mass Group post here. They also passed a local option to allow municipalities to apply up to 2% tax on meals and lodging while keeping the state tax at 5% on those items. Link to Blue Mass Group post here. Although the Senate Budget site does not show Amendment 2-Municipal Relief 2 as having been adopted, I am assuming that the news from BMG and papers is correct. Take it for what it's worth. I have pulled out the relevant wording...

...on the distribution of the meals tax funds and it says:

The commissioner shall remit 50 per cent of the amount collected to the originating city or town, 7.5 per cent to the Municipal Regionalization Incentives Fund established in section 35FF of chapter 10 of the general laws and the balance to cities and towns that have accepted this section; provided, however, that no city or town shall receive more than the total it collected from such sales tax on meals within the corresponding calendar year.

If this amendment survives the conference committee and gets signed into law, it will be a boon to Dartmouth and could increase our revenues by close to a million dollars, if I am not mistaken.
The Senate also voted to revoke the exemption for real property owned by telecommunications companies. The amendment reads:

Section18 of Chapter 59 of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by striking the first sentence thereof and replacing it with the following:-
First, all tangible personal property, including that of persons not inhabitants of the commonwealth, except ships and vessels, and including machinery, poles, wires, and underground conduits, wires, and pipes of telecommunications companies laid in or erected upon public or private ways, shall be taxed to the owner in the town in which such property is situated on January first. For purposes of this clause, telecommunications companies shall include providers of cable television service, internet service, telephone service, data service, radio utility and mobile radio telephone utility systems, both as defined in Section 12A of Chapter 159, and any other services involving the transmission of communications or intelligence by any means.

If that amendment survives conference, it will boost revenues for all the municipalities in the state.
You can read the text of the amendments here at the Senate Budget site if you want to go to the source.
UPDATE- For the record, Senator Montigny voted against raising sales tax. From Blue Mass Group post here
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I'm still pitching the Governor's line

From Blue Mass Group, here is a message from the Governor on the state budget. We need reform in many areas, pensions, insurance, transportation, local option taxes, etc. If you and I don't tell our legislators that we want reform, we won't get it.
WHY RAISE TAXES ON THE STAUS QUO?

What do you think?
Click here to read on!

State budget holds up town budgets

Uncertainty about the state aid is delaying finalization of town budgets across the Commonwealth. The Standard Times has an article about that here. At issue is the amount of state aid that town's will receive on a wide range of budget categories. Dartmouth has already planned for many of the cuts but there are a few which may still impact our town budget. School aid, called Chapter 70 aid, will be funded at FY2009 levels. Other unrestricted aid will be cut. The state has already specified the amount of highway aid, called Chapter 90 funds, which I wrote about here. State Representatives are considering a sales tax increase ...

... according to the Blue Mass Group blog here and here. I would rather see a local option meals and room tax enacted or a modest increase in income tax. Sales tax is a regressive tax which falls most heavily upon those who must spend most of their income while the income tax is indexed to income and higher earners pay more. What are your thoughts on tax increases and the state budget?
UPDATE! Seems the Constitiution of the Commonwealth prohibits a graduated income tax. I stand corrected.
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Governor Patrick at Town Hall meeting tonight

From Blue Mass Group blog. Governor Patrick will appear at a Town Hall forum tonight at 8PM. THe event will be streamed live on the internet. Go to this link for details and a link to the TV station streaming the feed
There is a lot to do in this year's state and federal budgets, ...

... I hope that Gov. Patrick and Pres. Obama get out and bring their side to the people. This is a start for our Governor. He needs to do more of it.
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Finance Committee meets with town department heads

Last night, the Finance Committee met with the heads of the town departments to kick off their review of the town's FY10 budget. The evening began with the presentation of the budget numbers agreed upon by the Finance Committee and Select Board at a meeting on Tuesday. See my post here. The goal is that each department will go back and prepare their 2010 budget based upon the amounts presented. Mr Lynam went over the prioritized budget amounts. Nearly all departments will see a substantial reduction in funding.
Mr. Friedman asked the department heads to come to their session with the committee...

... prepared to discuss the impacts of the proposed budget, a five year outlook for the funding of their departmental budget and a capital needs list for the next five years. Mr. Friedman proposed that the budget impacts be presented as a bullet list. Mr. Friedman also suggested that capital items which provide long term savings, either through increased efficiencies or cost avoidance, would be given precedence.
Mr. Iacaponi spoke about the need for department heads to closely control spending for this fiscal year. He also gave a summary of the anticipated FY10 revenues.
Mr Gagne asked those in attendance to write to our state representatives in support of the Municipal Partnership act which will provide alternative means of revenue by taxing telecommunications property and providing a local option for a meals tax.
Mr Friedman asked for questions and comments from the department heads and getting none, adjourned the meeting.
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Governor details local aid cuts for current year

Yesterday Governor Patrick announced local aid cuts for the current fiscal year which started in July of 08. The Governor said that $128 million would be cut from local aid. Details in this Standard Times article here While the cuts are not welcome, they are smaller than I feared. I thought that the cuts may approach $300 million.
Governor Patrick also proposed allowing local communities to assess a tax on restaurant meals. The proposal has two parts, statewide and local increases of 1%, The article states,...

...

Gov. Patrick is also proposing ways to help municipalities raise money other than the property tax. He will file a new Municipal Partnership Act next week that calls for an increase of 1 percentage point in the state meals and hotel room taxes.
The current meals tax is 5 percent. The current hotel room tax can reach 9.7 percent, with 4 percent going to municipalities.
The statewide meals and hotel tax hikes, which need approval from the Legislature, would be distributed to cities and towns through the Lottery formula. A small portion would go toward tourism promotion.
On top of the statewide tax, Gov. Patrick is again proposing to let cities and towns raise both the meals and rooms taxes by another percentage point. And he wants to lift the century-old tax exemption on utility poles and wires.

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Governor endorses local tax option

The Standard Times had an article by David Kibbe today in which Governor Patrick endorsed the Municipal Partnership Act. This legislation would allow towns to impose a 1-2% tax on restaurant meals. The article quoted the governor,

“I think we have greater urgency to look at that and other options from the Municipal Partnership Act because of the inability of the state to sustain the same kinds of levels of local aid,” Gov. Patrick told reporters in response to a question on whether he would refile the municipal bill. “That’s just the economic reality we are facing.”

The bill failed to pass in the last session ...
(hat tip to Wally for calling my attention to S-T article in comments)

...of the General Court. I think that towns with large commercial sectors, like Dartmouth, may have to agree to share the revenue generated with other towns which have little or no commercial development in order to get this act through the legislature. My take is that a share of increased revenue is better than no increased revenue. The Massachusetts Municipal Association (MMA) and Boston's mayor Menino is a strong proponents of the act.
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