Rep. Bradley: State Budget Makes Tough Choices to Preserve Local Aid

June 22, 2009

The House and Senate approved a fiscal year 2010 operating budget designed to close an estimated $3 billion revenue gap through a combination of policy reforms, program cuts, and new revenue.  The balanced budget addresses the state’s fiscal challenges while protecting core programs and services.

Due to a continuing decline in revenues as a result of the economic downturn, the House and Senate took dramatic steps to cut non-essential state programs, in the end cutting more than $1.2 billion from the budget and eliminating dozens of line items.  In seeking cost savings measures, the House brought reform to sections of state government long considered sacred cows, saving millions of dollars this year and in the future.

The budget comes after the House passed unprecedented reforms in the areas of transportation, pension and ethics and campaign finance.  The Senate joined with the House in approving transportation and pension reform legislation.  An agreement on the ethics reform package is expected soon.

Local aid funding will help cities and towns that are trying to retain teachers, police officers and firefighters, mitigate the need for property tax increases, and provide basic municipal services.  The Town of Hingham will see an increase of nearly $486,000 in local aid over last year’s figures.

An increase in the sales tax from 5 percent to 6.25 percent will generate $759 million in new revenues for Fiscal Year 2010 and help close the budget gap.  Even at that new level, 30 other states will have a higher aggregate state sales tax rate than Massachusetts.

While struggling with a decline in tax receipts, the budget adopted by the Legislature still was able to provide cities and towns level funding of Chapter 70 state education aid in the year ahead.  At almost $3.5 billion, state aid for education comprises over 14% of the state budget.  In addition to Chapter 70 aid, the budget will direct over $1 billion in unrestricted government aid to municipalities to help pay for local services including police and fire.

The budget plan also raises the so-called Pacheco Law restrictions on private contractors to a threshold of $500,000; allows Massachusetts to participate in the popular multi-state Powerball lottery game which would bring in additional money for cities and towns; and raises health benefit contributions for all state employees by 5 percent, saving $50 million for the Commonwealth.

The final $24.7 billion proposal is now being considered by the Governor.  He may sign it into law or veto either all of some of the budget.  The House and Senate can then override his vetoes with a two-thirds’ vote of each branch.

Garrett Bradley of Hingham serves as the State Representative for the Third Plymouth District, which comprises the towns of Cohasset, Hingham, Hull and Precinct 3 of Scituate.