The Massachusetts Municipal Association today sent to me, as your Medfield selectman, the Action Alert below today, because municipal assistance monies Medfield receives from the Commonwealth of Massachusetts are at risk of soon being cut yet again, because the state did not meet revenue estimates for the first quarter of FY10, which ended 9/30/09. The Massachusetts Municipal Association suggests that we ask our legislators to legislate for Medfield on the following issues in order to assist Medfield and the other towns:
HEALTH INSURANCE PLAN DESIGN POWER
CLOSE THE TELECOM EQUIPMENT LOOPHOLE
STOP THE QUINN BILL UNFUNDED MANDATE
PASS PENSION FUNDING RELIEF
Details on each appear below.
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September Revenues
MMA Action Alert10/5/09
Contact: Tom Philbin 617-426-7272 ext.
121Massachusetts Municipal Association
September State Tax Revenues Plummet Below Benchmark
Gov. Prepares Mid-Year Cuts, Says Local Aid “On the Table”
Revenues $243M Below Sept. Benchmark, Off $212M for Year
Call Your Legislators Today to Rally for Municipal Relief Items
As feared, September state tax revenues fell far below the monthly benchmark needed to keep the state budget in balance, throwing Massachusetts state government sharply into the red at the end of the first quarter of fiscal 2010 and setting the stage for mid-year budget cuts just a few months into the fiscal year.
Monthly tax collections for September were $243 million below the benchmark. Most of the loss was due to lower corporate and business tax collections ($144 million below the benchmark), sagging income tax revenue ($58 million below the benchmark), and lower than expected sales tax collections ($37 million below the benchmark). For fiscal 2010 so far, tax collections are falling $212 million short of the benchmark.
The House and Senate Ways and Means Committee Chairs have both publicly stated that the September revenue figures were worse than their worst-case scenario projections. Both said that the revenue shortfall is an alarming signal that the fiscal crisis has not ended.
Under state law, the Governor has until October 15 to revise the fiscal 2010 revenue projections and then develop a plan to close the shortfall, which looks to be at least $500 million or more, since the first quarter losses amount to $212 million.
The Governor announced that he would consult with economic advisors over the next two weeks to revise the fiscal 2010 tax forecast based on the revenue numbers through the end of September and the most recent economic data. He said he would announce his plan to close the budget shortfall shortly after the new forecast is adopted.
Once the revenue estimate is officially lowered, the Governor will be forced to use his so-called Section 9C budget-cutting authority to reduce executive branch agency spending, triggering more state layoffs and program reductions.
In response to questions from reporters, the governor said, “Local aid is on the table because it is unavoidable.” The Governor cannot reduce the major general municipal aid account (the combined Lottery and Additional Assistance amount) and Chapter 70 education aid unless the Legislature grants him expanded 9C powers, as was done last year. However, the Administration has the ability to reduce many other local aid programs, including reimbursement accounts and grants. If the Governor renews his call for expanded 9C powers, the Legislature will likely once again provide him with that authority, as such a request has never been denied.
PLEASE CALL YOUR LEGISLATORS TODAY and ask them to protect municipal aid. Cities and towns have been severely harmed by the deep local aid cuts implemented since the beginning of the fiscal crisis. The fiscal 2010 state budget slashed total local aid by $700 million below the original fiscal 2009 budget, the largest local aid cut in history. Communities in every corner of Massachusetts have implemented layoffs, deep cuts in services, relied even more on property taxes and, now, are adopting local option tax increases. It is crucial for your legislators to know how any mid-year cuts would throw your budget out of balance and cause even more widespread disruption and pain.
PLEASE CALL THE GOVERNOR’S OFFICE (617-725-4000) to explain that another round of mid-year local aid cuts would force unacceptable pain onto cities and towns.
PUSH THE LEGISLATURE AND THE GOVERNOR TO PASS KEY MUNICIPAL REFORMS NOW. This is the time for state leaders to provide major municipal relief items. Ask your Representatives, Senators and the Governor to immediately support and pass the following priorities:
HEALTH INSURANCE PLAN DESIGN POWER: Pass the MMA’s plan to give cities and towns the power to update municipal health insurance plans outside of collective bargaining, which is what state government does, and would save tens of millions of dollars statewide;
CLOSE THE TELECOM EQUIPMENT LOOPHOLE: End the telecom property tax loophole on equipment, which would generate $25 million locally (the state ended the loophole on poles and wires last summer);
STOP THE QUINN BILL UNFUNDED MANDATE: Fix the Quinn Bill mess by passing legislation to clarify that cities and towns are NOT responsible for paying the state’s share of the police career incentive program – police unions are in court trying to force cities and towns to make up the $48 million that the state cut from its share, which would represent an outrageous new unfunded mandate on municipalities; and
PASS PENSION FUNDING RELIEF: Pass legislation allowing cities and towns to extend their pension funding schedules by 10 years, to 2040, to protect local taxpayers from unnecessarily high assessments during this time of fiscal crisis – unless the funding schedules are extended, market losses due to the recession will trigger steep increases in annual pension payments and force budget cuts to key municipal and school services.
The MMA will keep you updated and fully informed of all developments. If you have any questions, please do not hesitate to contact MMA Legislative Director David Baier (at dbaier@mma.org or 617-426-7272 ext. 120) or MMA Deputy Legislative Director John Robertson (at jrobertson@mma.org or 617-426-7272 ext. 122) at any time.
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