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The pandemic is wreaking havoc on municipal finances, with more pain to come

A sign at the Grace Farrar Cole School in Norwell.
A sign at the Grace Farrar Cole School in Norwell.David L. Ryan/Globe Staff

Parking inspectors and librarians are among the nearly 200 employees furloughed in Brookline. Natick school cafeteria workers are, for now, out of work. Plymouth’s leaders say dozens of layoffs may be coming.

The coronavirus pandemic has thrown city and town budgets into chaos, forcing cuts that have hit senior centers, schools, and police departments in municipalities big and small across Massachusetts.

But while everyone hopes the reductions are temporary, local officials are preparing for more drastic action that could cut even deeper into essential services, from public safety to parks to education — moves that were unimaginable just months ago, when tax revenues were flowing in and many schools were preparing for a new windfall of state aid.

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The scale of the fiscal carnage is expected to be massive at the local level. Massachusetts cities and towns are projected to see a bigger drop in 2020 revenue than their counterparts in any other states except California, New York, and Pennsylvania, according to an analysis from the National League of Cities.

And depending on the city or town, that could mean a return to the harsh times of the 2008 recession, when libraries closed, police and fire departments shed positions, and teachers lucky to keep their jobs were left juggling swelling class sizes.

“It’s scary for the employees,” said Melissa Arrighi, town manager of Plymouth, where about three dozen workers have been furloughed and officials have temporarily delayed taking on eight new police recruits.

At the same time, Arrighi said, local leaders are considering slashing $5.6 million from the town and school budgets for next fiscal year should its state aid be cut — decisions that could translate into roughly 30 layoffs in town offices and a still-to-be-determined number in the schools.

“We’re trying to project based on the last recession,” Arrighi said of potential cuts. “It’s sobering."

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Fear of municipal budget struggles has been widespread since the COVID-19 crisis upended the country’s financial picture, leaving tens of millions of Americans to seek unemployment benefits.

Roughly 2,100 cities said last month they expected to see a revenue shortfall this year, according to a survey conducted by the League of Cities and United States Conference of Mayors. More than half said they expected budget cuts to hit police and other public safety departments.

Cities and towns find themselves in an especially delicate position. While they can lean on property taxes to underwrite their finances, local officials across Massachusetts are expecting state officials to cut — perhaps drastically — another main source of revenue: the direct aid from Beacon Hill that helps pay for schools and municipal services.

That process is laced with uncertainty. With the new fiscal year less than seven weeks away, neither the Massachusetts House nor the Senate have released budget proposals as lawmakers stare down the potential of losing billions in tax revenues, which have already begun to plummet.

There’s also little clarity about when, or to what degree, Washington could provide help to plug the holes. Governor Charlie Baker said Thursday night that the state had up to $500 million from the federal Coronavirus Relief Fund to distribute to municipalities. But it’s tabbed specifically for costs related to COVID-19 and can’t be used to simply replace lost revenue.

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And while the Democratic-led US House on Friday approved a $3 trillion coronavirus relief bill that included $1 trillion in aid to state and local governments, it was all but dead on arrival in the Republican-controlled Senate.

“We wait for the state to move. And the state is waiting for the federal government to move,” said New Bedford Mayor Jon Mitchell, president of the Massachusetts Mayors’ Association. “But there will come a point where if the federal government hasn’t done anything, the state will be forced to make some tough decisions — and that will be passed down to cities and towns.”

In Boston, Mayor Martin J. Walsh has said that city officials “as of now” aren’t considering furloughs or layoffs among the 18,000-person workforce, and Justin Sterritt, Boston’s budget director, said they’re not anticipating any in the fiscal year that starts in July.

But the city is likely to recast its spending expectations next month after initially budgeting for a 4 percent increase. The city, too, is bracing for a drop in state aid, which is its second-largest revenue source.

Sterritt said the city is in a good position, however, to weather the inevitable downturn, in part because of its reliance on property taxes, an oft-stable source that accounts for 72 percent of city revenues. But it also leans on meal and hotel taxes, both of which have taken a hit and are expected to keep struggling.

“This is an unprecedented pandemic. And we certainly don’t have a crystal ball,” Sterritt said.

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Temporary cuts elsewhere, however, have been unavoidable as buildings shutter to slow the disease’s spread, local officials say. With schools closed the rest of the academic year, crossing guards no longer have children to shuttle across busy roads. Librarians don’t have desks to staff. Recreation departments don’t have programs to run.

In Newton, 91 part-time municipal workers were furloughed, with the majority being in the Parks, Recreation and Culture Department. Brookline officials have done two rounds, furloughing 196 full- or part-time workers. Other temporary cuts have hit towns from Great Barrington in the Berkshires to Rockland south of Boston.

In New Bedford, Mitchell announced a citywide hiring freeze, affecting virtually all 30 departments and ensuring that some 50 open positions remain unfilled. City officials also scaled back capital plans, tabling millions in spending.

Even Cambridge, with its deep commercial tax base, has delayed until next spring nearly three dozen hires in transportation, housing, and other programs, with the potential that they will never materialize.

“Of all the budgets I’ve worked on in 40 years, this is probably the one that has the most uncertainty,” said City Manager Louis A. DePasquale.

The dramatic turn of financial fortunes may be most acute for public schools. Just six months ago, state and local officials were celebrating the signing of a sweeping education bill that overhauled the school funding formula and promised to inject $1.5 billion in extra money into local school districts over seven years.

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But it came with no dedicated funding source, and while lawmakers haven’t backed away from better funding for schools, “we have heard them say that it may be deferred, delayed, or adjusted," said Tom Scott, executive director of the Massachusetts Association of School Superintendents.

“People want to know, ‘Just tell me what I should be planning for,' " Scott said. “We’re all in the dark right now.”

That unpredictability has, in some cases, stopped officials from temporarily laying off employees who could quickly return should events again begin dotting the calendar or buildings reopen, said Geoff Beckwith, director of the Massachusetts Municipal Association, which represents the state’s 351 cities and towns.

But he said he expects they’ll begin proliferating across local governments as Baker’s plan for reopening the state’s economy becomes clear. Absent a dramatic injection of federal aid, those cuts are likely to turn into more permanent ones rivaling, or even surpassing, what was weathered more than a decade ago.

“Take what we went through with the Great Recession," Beckwith warned, “and look at it through a magnifying glass.”


Matt Stout can be reached at matt.stout@globe.com. Follow him on Twitter @mattpstout