Home 
Advocacy Executive Director's Reports Challenges and choices for Massachusetts
Cities and towns are entering another budget-setting season with many more questions than answers. During the year ahead, the answers to these questions may lead voters and citizens to some surprising conclusions.
The questions are clear. What is happening to the national economy, and will Massachusetts slide even further behind? Will energy, gasoline, construction and health costs continue to rise faster than the overall inflation rate and outpace new revenues? What will happen to the state budget and the essential local aid accounts? Are we any closer to winning necessary reforms to empower cities and towns to diversify revenues with local option taxes and to have more authority to manage day-to-day affairs? What will happen in November, when voters will consider a ballot question to repeal the entire state income tax, which would translate into a staggering $11 billion tax cut?
Some of these questions, such as the state of the economy, will remain unknown for some time, but the indicators are not good, pointing to further job losses and a slowdown that will certainly impact state and local tax revenues. And the truth is that many core cost factors for localities and the state will continue to increase faster than the revenues that pay for government services. The price of a barrel of oil has a direct impact on the cost of all fuel, electricity, steel and construction materials, and hospitals continue to increase their costs above inflation.
In terms of the state budget and local aid, the governor has initiated the process by filing his $28 billion spending plan. As reported in this edition of The Beacon, the administration’s budget includes important and scheduled increases in Chapter 70, the special education circuit breaker, the school building assistance programs, and other items strongly supported by local leaders. In terms of municipal aid, the proposal level-funds Lottery distributions at $935 million, but $124 million of this is conditioned on approval of casino legislation. It is the MMA’s position that Lottery distributions must be level-funded without any conditional provisions or reliance on revenue sources that have not yet been approved, as cities and towns cannot absorb a cut in aid without devastating impacts locally, and communities need this certainty early in the process.
Local aid must be a key priority and a centerpiece of the final fiscal 2009 budget produced by the Legislature and the governor, and municipal officials will be fully engaged to inform, press and call for investment in cities and towns.
Community leaders also give high priority to the essential tools of local-option taxes of up to 2 percent for meals and lodging, and to closing the telecommunications property tax loophole. The local option revenues could raise up to $250 million statewide, and closing the telecom tax give-away to the telephone companies would generate $78 million. Added up, these resources would eclipse any other proposals on the table this year to provide immediate property tax relief and would also enable communities to preserve important municipal services. It is imperative that these proposals move forward.
With cities and towns facing widespread fiscal distress, local aid and increased local revenues are needed to prevent a slide into full-scale crisis, which would cause deep damage to our already weakened economy.
Economists and policy experts all agree that we must have strong cities and towns in order to have a strong economy. Now more than ever, Massachusetts must find a way to invest in and empower communities, so that businesses and families will decide to come here, stay here, and plan their futures here. The basic and essential services that are delivered locally are the building blocks for our economic strength and competitiveness. That is why the answers to all of these questions point to our hometowns.
At the beginning, I suggested that events of this year could lead citizens and voters to some surprising conclusions. That’s because Massachusetts may actually have a full and broad discourse that engages and educates the public on all of these matters.
Although most people know we’ll be voting for a new president in November, few realize that the ballot will also include a question that may tantalize some voters: the chance to repeal the entire state income tax. This would cut state revenues by 40 percent and trigger a full-scale fiscal crisis. Because of worries over the economy, and the fact that voters generally shy away from triggering chaos (most people see elections as a way to bring order to a situation), conventional wisdom may be that the question will ultimately fail.
This view misses a broader picture: this fall, Massachusetts will have a broad discussion and debate about the role of government, the value of government, whether government will receive the resources it needs to function at its current level, and why that’s important.
This is an opportunity to discuss the real questions that we face, and talk about the real solutions we need to make our state stronger. The MMA has already initiated a major public education effort on the need for revenue sharing as a permanent (as opposed to annual, budget-to-budget) solution to restore fiscal stability to our hometowns. Please go to our “Revenue Sharing Central” section of our Web site to see our public education program. But this is just a part of what the discussion will be about.
Beyond the need to re-invest in communities, this election will provide a framework to discuss the challenges and choices ahead, and the role of government in our economy and in our daily lives. If this discussion is fully engaged, and is seen as an opportunity to inform and educate everyone about the true fiscal and economic facts, we could see a transformation in the public mood.
Instead of the debate being about whether we will create a fiscal crisis, the discussion could be about how to solve the serious challenges we face.
Instead of the debate being about whether to cripple government, the discussion could be about how we need to work together in partnership for progress.
Instead of the debate being about our past, the discussion could be about our future.
And that would be the best surprise of all.
Advocacy Executive Director's Reports Challenges and choices for Massachusetts
Challenges and choices for Massachusetts
Cities and towns are entering another budget-setting season with many more questions than answers. During the year ahead, the answers to these questions may lead voters and citizens to some surprising conclusions.
The questions are clear. What is happening to the national economy, and will Massachusetts slide even further behind? Will energy, gasoline, construction and health costs continue to rise faster than the overall inflation rate and outpace new revenues? What will happen to the state budget and the essential local aid accounts? Are we any closer to winning necessary reforms to empower cities and towns to diversify revenues with local option taxes and to have more authority to manage day-to-day affairs? What will happen in November, when voters will consider a ballot question to repeal the entire state income tax, which would translate into a staggering $11 billion tax cut?
Some of these questions, such as the state of the economy, will remain unknown for some time, but the indicators are not good, pointing to further job losses and a slowdown that will certainly impact state and local tax revenues. And the truth is that many core cost factors for localities and the state will continue to increase faster than the revenues that pay for government services. The price of a barrel of oil has a direct impact on the cost of all fuel, electricity, steel and construction materials, and hospitals continue to increase their costs above inflation.
In terms of the state budget and local aid, the governor has initiated the process by filing his $28 billion spending plan. As reported in this edition of The Beacon, the administration’s budget includes important and scheduled increases in Chapter 70, the special education circuit breaker, the school building assistance programs, and other items strongly supported by local leaders. In terms of municipal aid, the proposal level-funds Lottery distributions at $935 million, but $124 million of this is conditioned on approval of casino legislation. It is the MMA’s position that Lottery distributions must be level-funded without any conditional provisions or reliance on revenue sources that have not yet been approved, as cities and towns cannot absorb a cut in aid without devastating impacts locally, and communities need this certainty early in the process.
Local aid must be a key priority and a centerpiece of the final fiscal 2009 budget produced by the Legislature and the governor, and municipal officials will be fully engaged to inform, press and call for investment in cities and towns.
Community leaders also give high priority to the essential tools of local-option taxes of up to 2 percent for meals and lodging, and to closing the telecommunications property tax loophole. The local option revenues could raise up to $250 million statewide, and closing the telecom tax give-away to the telephone companies would generate $78 million. Added up, these resources would eclipse any other proposals on the table this year to provide immediate property tax relief and would also enable communities to preserve important municipal services. It is imperative that these proposals move forward.
With cities and towns facing widespread fiscal distress, local aid and increased local revenues are needed to prevent a slide into full-scale crisis, which would cause deep damage to our already weakened economy.
Economists and policy experts all agree that we must have strong cities and towns in order to have a strong economy. Now more than ever, Massachusetts must find a way to invest in and empower communities, so that businesses and families will decide to come here, stay here, and plan their futures here. The basic and essential services that are delivered locally are the building blocks for our economic strength and competitiveness. That is why the answers to all of these questions point to our hometowns.
At the beginning, I suggested that events of this year could lead citizens and voters to some surprising conclusions. That’s because Massachusetts may actually have a full and broad discourse that engages and educates the public on all of these matters.
Although most people know we’ll be voting for a new president in November, few realize that the ballot will also include a question that may tantalize some voters: the chance to repeal the entire state income tax. This would cut state revenues by 40 percent and trigger a full-scale fiscal crisis. Because of worries over the economy, and the fact that voters generally shy away from triggering chaos (most people see elections as a way to bring order to a situation), conventional wisdom may be that the question will ultimately fail.
This view misses a broader picture: this fall, Massachusetts will have a broad discussion and debate about the role of government, the value of government, whether government will receive the resources it needs to function at its current level, and why that’s important.
This is an opportunity to discuss the real questions that we face, and talk about the real solutions we need to make our state stronger. The MMA has already initiated a major public education effort on the need for revenue sharing as a permanent (as opposed to annual, budget-to-budget) solution to restore fiscal stability to our hometowns. Please go to our “Revenue Sharing Central” section of our Web site to see our public education program. But this is just a part of what the discussion will be about.
Beyond the need to re-invest in communities, this election will provide a framework to discuss the challenges and choices ahead, and the role of government in our economy and in our daily lives. If this discussion is fully engaged, and is seen as an opportunity to inform and educate everyone about the true fiscal and economic facts, we could see a transformation in the public mood.
Instead of the debate being about whether we will create a fiscal crisis, the discussion could be about how to solve the serious challenges we face.
Instead of the debate being about whether to cripple government, the discussion could be about how we need to work together in partnership for progress.
Instead of the debate being about our past, the discussion could be about our future.
And that would be the best surprise of all.
Written by MMA Executive Director Geoff Beckwith
