Communities fear effects of local aid cuts

Municipalities on Friday were collectively hoping any sales tax increase would mean an increase in local aid, but that will not be the case.Massachusetts lawmakers voted on a $27.4 billion budget that makes steep cuts across state government and raises taxes.The House and Senate voted Friday on the budget that starts July 1, after a joint committee reached agreement Thursday night.The proposal slashes state aid to cities and towns by up to 15 percent and could close as many as 12 Registry of Motor Vehicles branches statewide.The agreement also calls for hikes in the state sales and meals taxes from 5 percent to 6.25 percent, as well as other expanded or new taxes.Nahant Town Administrator Mark Cullinan said a 15 percent cut in local aid would really hurt communities, especially those that have already adopted budgets for the upcoming fiscal year, which starts July 1.Cullinan said the FY’09 budget was $10.2 million and he budgeted the same amount for FY’10. He added approximately 8 percent of the town’s operating budget comes from state aid, which has already been reduced by 10 percent. He said another 15 percent reduction in state aid means the town would lose between $100,000 and $120,000 in revenue.”It’s certainly not good news,” he said. “Our budget is already set so any additional cuts in state aid would have to be spread across departments like we did with the 9C cuts earlier this year. Nahant is dependent on property taxes and local aid. Those are our two sources of revenue so those (9C) cuts were painful and these cuts will be even more difficult.”Cullinan said any future cuts in local aid would be hard to absorb within the existing budget and he could not rule out the possibility of layoffs if there are cuts in local aid.There is some good news. The budget proposal also provides about $275 million to stave off increased transportation costs, including toll increases.Peabody Mayor Michael Bonfanti said the city budget team had prepared itself for a cut in local aid numbers early on and built a more pessemistic spending plan.”This is not a one-year event. In government there is a time lag to when the revenue starts to trickle in and the new taxes take effect,” he said. “In our planning we based our decision on the senate’s budget, which was the most conservative, and this state budget (passed Friday) is the closest to that.”Bonfanti went on to say that there were no real surprises in the state budget and that he was pleased that proposed changes to the city’s health insurance plan were not included in the final plan.”I am perturbed about the Quinn Bill, basically taking that away and asking us to fund it ourselves and the first round of stimulus money – the $168 million (allocated in February based on chapter 90 funding gaps) where we basically got nothing,” he said. “It is extremely disapointing that we were penalized for being well run. I wish that they had done that in a way that was more fair.”Like Bonfanti, Saugus Town Manager Andrew Bisignani put together what he called an extremely lean budget. It is, however, also considered a very precarious budget and any minor jolt could throw it out of whack. Bisignani could not be reached for comment Friday, but he has said for weeks that he was not anticipating any good news from the state and had built the budget without possible revenue such as a meal, hotel/motel tax or sales tax increase.Since Saugus is on tap to vote on its budget Monday, Town Moderator Robert Long said he hopes the state’s budget package won’t impact the town’s budget too steeply.A municipal relief package in the Governor’s budget could generate almost $200,000 in additional revenue for the town of Swampscott. In earlier interviews, Swampscott Town Administrator Andrew Maylor said the proposal would allow municipalities the option of imposing a hotels and meals tax, which could generate additional revenue for the town.Maylor said according to numbers provided to him by the state, a 2 percent local opt