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Advocacy Executive Director's Reports Standing up and standing together
The ink’s barely dry on this year’s budget, and local officials are already busy preparing their initial spending blueprints for fiscal 2009. Predictably, there is red ink on the drawing board, as a growing number of communities face structural budget deficits going into next year.
The long-term fiscal squeeze has taken its toll, as communities have drawn down their reserves, taxed up to the maximum allowed by Proposition 2 ½, gone to the voters for overrides, implemented innovative cost-savings initiatives using technology, regional collaboration, negotiated benefit changes, consolidation and more. Of course, local governments have been forced to reduce service levels in all areas including schools, libraries, public works, public safety, inspections, recreation, and administration.
Cities and towns have been in this mode ever since fiscal 2003, when the mid-year “9C” local aid cuts imposed by the previous administration plunged communities into fiscal distress, and local governments have been playing catch-up ever since.
One of the ironies of the current situation is that there is a relatively low level of public awareness and general understanding of local government’s fiscal distress, mostly because municipal leaders have been doing a great job under extremely difficult circumstances, managing to minimize, mitigate or mask much of the impact during this long fiscal drought.
Also, in this short-term-focused, crisis-of-the-day, sound-bite (or sound-byte) era, the symptoms of the fiscal crisis get most of the attention (lost overrides, deep service cuts, new fees) for short spikes of time during the budget setting-season, while the long-term chronic causes and effects get comparatively little sustained attention and media coverage.
Thus, budget woes are in the news during the late spring and early summer, but soon the coverage quiets, only to rise again when the drama reaches a high enough level during the next cycle. The live shots on the evening news (in front of city and town halls) occur when an override fails, or a town meeting gathers to make cuts or increase fees. There are no live shots when an override passes, or a budget is balanced using reserves, or a multi-year plan to phase in certain service cuts is initiated.
It is notable that when citizens are educated about the root causes of the fiscal distress we face, including increases in fixed costs that routinely exceed even normal inflation, lost local aid, and restricted revenue-raising and general management authority, they overwhelmingly join in the call for a renewed state-local fiscal partnership. Right now, few residents are aware of two facts: that after adjusting for inflation local aid is currently $600 million below fiscal 2002 levels, and that the percentage of state tax revenues that comes home as local aid has fallen from 32 percent to 26 percent during this period. A little education will go a long way toward sustaining and even growing the already substantial public support for revenue sharing, local aid, and expanded municipal authority to levy local option taxes and manage with more flexibility.
A balanced analysis reveals that the state’s fiscal situation is similar to the municipal condition, with two exceptions. The Commonwealth has a structural budget gap and is allocating an increased share of its budget for health care, employee benefits, and fixed costs such as debt service and energy. This sounds very familiar to local budget writers.
The two big differences are that the state has nearly $2 billion in reserve funds and has the unilateral power to pass laws and change tax laws to deal with revenue and cost-cutting needs, providing a huge degree of flexibility. Communities have no such reserves, and we have been seeking – but have not yet received – the power to levy additional taxes and manage with greater autonomy and flexibility.
In just a couple of months, the MMA will host the largest annual gathering of local officials held in New England. In January, more than 1,000 people who are committed to building robust and vibrant cities and towns will gather in Boston for MMA’s Annual Meeting & Trade Show.
This year’s theme will be “Standing Up for Strong Communities,” because that is what we are doing, now and throughout the year ahead – from Berkshire County to Barnstable County, from Provincetown to Pittsfield, and everywhere in between. We’re raising public understanding of the seriousness of the fiscal challenges at the local and state level. We’re explaining the issues and outlining the solutions. We’re reaching out to our legislators and to the new administration.
All of this will be on center stage at our Annual Meeting. When we stand up for strong communities, the municipal community will be doing this together, united for a stronger and more competitive Massachusetts.
The academic and economic experts all agree that the longer we treat each level of government – municipal and state – as independent and unrelated, neither Massachusetts nor any other state will reach its full potential. Our fates and futures are intertwined. That’s why we need to forge a lasting and powerful partnership between state and local government, designed to be mutually supportive, working toward the same purpose.
So now, before the holidays overtake us, before the focus and media coverage is too much on the problems and not as much on the solutions, plan on attending our Annual Meeting in January. Register today! Join your municipal colleagues from across the Commonwealth to increase public awareness of the crucial issues of the day, talk about common-sense solutions and our common future, promote revenue sharing and municipal empowerment, and extend a hand of partnership to the state, as we all stand up together for a stronger Massachusetts.
Advocacy Executive Director's Reports Standing up and standing together
Standing up and standing together
The ink’s barely dry on this year’s budget, and local officials are already busy preparing their initial spending blueprints for fiscal 2009. Predictably, there is red ink on the drawing board, as a growing number of communities face structural budget deficits going into next year.
The long-term fiscal squeeze has taken its toll, as communities have drawn down their reserves, taxed up to the maximum allowed by Proposition 2 ½, gone to the voters for overrides, implemented innovative cost-savings initiatives using technology, regional collaboration, negotiated benefit changes, consolidation and more. Of course, local governments have been forced to reduce service levels in all areas including schools, libraries, public works, public safety, inspections, recreation, and administration.
Cities and towns have been in this mode ever since fiscal 2003, when the mid-year “9C” local aid cuts imposed by the previous administration plunged communities into fiscal distress, and local governments have been playing catch-up ever since.
One of the ironies of the current situation is that there is a relatively low level of public awareness and general understanding of local government’s fiscal distress, mostly because municipal leaders have been doing a great job under extremely difficult circumstances, managing to minimize, mitigate or mask much of the impact during this long fiscal drought.
Also, in this short-term-focused, crisis-of-the-day, sound-bite (or sound-byte) era, the symptoms of the fiscal crisis get most of the attention (lost overrides, deep service cuts, new fees) for short spikes of time during the budget setting-season, while the long-term chronic causes and effects get comparatively little sustained attention and media coverage.
Thus, budget woes are in the news during the late spring and early summer, but soon the coverage quiets, only to rise again when the drama reaches a high enough level during the next cycle. The live shots on the evening news (in front of city and town halls) occur when an override fails, or a town meeting gathers to make cuts or increase fees. There are no live shots when an override passes, or a budget is balanced using reserves, or a multi-year plan to phase in certain service cuts is initiated.
It is notable that when citizens are educated about the root causes of the fiscal distress we face, including increases in fixed costs that routinely exceed even normal inflation, lost local aid, and restricted revenue-raising and general management authority, they overwhelmingly join in the call for a renewed state-local fiscal partnership. Right now, few residents are aware of two facts: that after adjusting for inflation local aid is currently $600 million below fiscal 2002 levels, and that the percentage of state tax revenues that comes home as local aid has fallen from 32 percent to 26 percent during this period. A little education will go a long way toward sustaining and even growing the already substantial public support for revenue sharing, local aid, and expanded municipal authority to levy local option taxes and manage with more flexibility.
A balanced analysis reveals that the state’s fiscal situation is similar to the municipal condition, with two exceptions. The Commonwealth has a structural budget gap and is allocating an increased share of its budget for health care, employee benefits, and fixed costs such as debt service and energy. This sounds very familiar to local budget writers.
The two big differences are that the state has nearly $2 billion in reserve funds and has the unilateral power to pass laws and change tax laws to deal with revenue and cost-cutting needs, providing a huge degree of flexibility. Communities have no such reserves, and we have been seeking – but have not yet received – the power to levy additional taxes and manage with greater autonomy and flexibility.
In just a couple of months, the MMA will host the largest annual gathering of local officials held in New England. In January, more than 1,000 people who are committed to building robust and vibrant cities and towns will gather in Boston for MMA’s Annual Meeting & Trade Show.
This year’s theme will be “Standing Up for Strong Communities,” because that is what we are doing, now and throughout the year ahead – from Berkshire County to Barnstable County, from Provincetown to Pittsfield, and everywhere in between. We’re raising public understanding of the seriousness of the fiscal challenges at the local and state level. We’re explaining the issues and outlining the solutions. We’re reaching out to our legislators and to the new administration.
All of this will be on center stage at our Annual Meeting. When we stand up for strong communities, the municipal community will be doing this together, united for a stronger and more competitive Massachusetts.
The academic and economic experts all agree that the longer we treat each level of government – municipal and state – as independent and unrelated, neither Massachusetts nor any other state will reach its full potential. Our fates and futures are intertwined. That’s why we need to forge a lasting and powerful partnership between state and local government, designed to be mutually supportive, working toward the same purpose.
So now, before the holidays overtake us, before the focus and media coverage is too much on the problems and not as much on the solutions, plan on attending our Annual Meeting in January. Register today! Join your municipal colleagues from across the Commonwealth to increase public awareness of the crucial issues of the day, talk about common-sense solutions and our common future, promote revenue sharing and municipal empowerment, and extend a hand of partnership to the state, as we all stand up together for a stronger Massachusetts.
Written by MMA Executive Director Geoff Beckwith
