Alissa for Acton

Alissa for Acton

4 hours ago

The MA Municipal Association has published its recommendations to address the fiscal challenges outlined in its earlier report: A Perfect Storm.

Reporting for MASSterList, Gintautus Dumcius reports:

City and town officials, at least the ones who keep an eye on the spreadsheets, tend to live every week like it’s municipal finance week.

But the water is looking especially choppy for them these days. The Massachusetts Municipal Association, which represents the state’s 351 cities and towns, issued a report in October warning of a “perfect storm” – if not a blizzard – of rising costs in every sector, from health care and insurance to energy and construction.
You don’t need to be a weatherman, or municipal finance expert, to see it coming. Residents are getting warnings of potential school closures and layoffs in places like Hadley and Whitman.

Unrestricted general government aid, which carries the somewhat unfortunate acronym UGGA in the state budget, has dropped 25% over the last 20 years, when adjusted for inflation. The MMA’s October analysis noted that figure, and argued that Prop. 2 ½, which limits how much property tax revenue a municipality can pull in, appears to be “too restrictive.”

The fiscal 2026 state budget, okayed this summer by lawmakers and signed by Gov. Maura Healey, has $1.32 billion for UGGA, a $14.4 million increase, or 1.1%, from fiscal 2025.

On Thursday, the MMA put out recommendations as a companion to its October analysis, asking for a bigger increase in the next fiscal year as budget discussions are about to get underway on Beacon Hill.

The organization’s No. 1 priority, unsurprisingly, is more money to mitigate the hangover many municipalities are still feeling from the Great Recession. A lot more money: $351 million, as a nod to the number of cities and towns. “Such an investment would provide immediate and meaningful relief for local budgets statewide, and local taxpayers,” said the report on recommendations.

Next on the list is flexibility on Prop. 2 ½, which has come in for criticism from Boston Mayor Michelle Wu. The MMA proposes allowing communities, with voter approval, to go for multi-year tax overrides, or increase the 2.5% annual limit, whether it’s temporarily, permanently, or tying it to the Consumer Price Index (CPI). Changing Prop. 2 ½ is fraught with political peril, and sure to set off a fight over protecting the measure approved by voters decades ago.

The recommendations report also calls for giving cities and towns the power to reclassify properties for tax assessing, shifting the tax burden and setting up tax expansions for seniors and veterans.

Healey’s Municipal Empowerment bill, which includes regional cooperation incentives, among other items, is also listed, as are local-option meals tax additions, as well as an increase in the hotel/motel taxes.

Budget watchers will get some visibility into what the state’s overall fiscal picture looks like for the coming year with the annual consensus revenue hearing, set for Dec. 16 and featuring the budget chiefs in the House, Senate and the Healey administration.

But if cities and towns are facing a blizzard, state lawmakers here and elsewhere could be grappling with a bomb cyclone. “The radar is clear. It’s going to hit almost every state,” Tim Storey, CEO of the National Conference of State Legislatures, said in a briefing earlier this week. “They know it’s coming and they’ve got, really, a couple years to prepare for this storm, to put the wood on the windows.” … See MoreSee Less