Warning that cities and towns are facing severe budget cuts due to COVID-19, a group of five municipal officials is urging state leaders to significantly boost local aid by raising taxes on corporations and wealthy individuals.
In an open letter Monday to Governor Charlie Baker, Senate President Karen E. Spilka, and House Speaker Robert A. DeLeo, the local officials — who come from five distinct regions of the state — warned that looming cuts in state aid to cities and towns would be “catastrophic to the very vital services that we provide.”
“Local governments have risen to the challenge of supporting our residents during this public health crisis. Now that our services are needed the most, we are going to be asked to shrink even further,” wrote City Councilors Jonathan Paz of Waltham, Adam Gomez of Springfield, Samantha Perlman of Marlborough, and Celine Reyes of Lawrence, and Michael Trowbridge, vice chair of the Mansfield Select Board.
Rather than cut the local assistance, the officials urged that the state expand it in the next fiscal year by eliminating or scaling back “tax breaks for special interest groups and very high-income households,” and prioritizing the resulting new revenue for municipalities.
Cities and towns earlier this year were anticipating a major increase in school aid — a key component of local aid — in fiscal 2021 due to the passage last year of the Student Opportunity Act, which provided for the state to invest $1.5 billion in added school aid over seven years. But with state budget deliberations delayed due to COVID-19, state officials Monday said local aid would remain level-funded at least through July and August, the opening months of the fiscal year. And specialists have warned that state’s revenues might dip by $6 billion this year, which could result in local aid cuts, the State House News Service reported.
Paz said he got the idea for the letter from seeing first-hand the economic pain the pandemic is inflicting on residents and businesses in Waltham and other communities, and the steep budget crunches those municipalities face due to plunging revenues and the constraints of Proposition 2½, the state law limiting annual growth of property taxes.
Absent new state aid, cities and towns have few options other than to slash their budgets to meet the fiscal crisis, Paz said.
“We still need to make investments in our educational systems. We still need to invest in our infrastructure. We want to be able to provide more public health services, not fewer,” he said.
When he reached out to his four colleagues from the other communities, all said they shared his concerns and agreed to co-sign the letter, according to Paz, adding that the group is now encouraging other local officials to sign onto the letter and submit it to the state leaders.
“Budgets are tough enough to deal with every year as it is, with the increasing costs we have,” said Trowbridge, an elected official in Mansfield for 24 years. “But when you throw on top of that that they want to reduce our local aid, it becomes almost impossible without catastrophic losses of services for people.”
“We are trying to start a conversation with our state leaders to say, our cities and towns need help,” Perlman said, noting that she worries underfunding of local aid in Marlborough “will affect the future of our community, our educational system, the quality of our streets.”
Some of the key revenue-raising tools the group proposes are suspending charitable tax deductions, raising the state’s corporate tax rate, raising rates on long-term capital gains and dividends, and eliminating the “single sales factor” for the mutual fund industry, which bases its taxes on in-state sales alone.
“Our state leaders have the opportunity to rise to the occasion and make sure cities and towns are able to do their job,” Paz said.
John Laidler can be reached at firstname.lastname@example.org.