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Advocacy Executive Director's Reports Time for action, not status quo
A recent report by one of the nation’s leading research organizations identifies 10 states that are in extreme fiscal peril. Myopic optimists who ignore the underlying facts would embrace with relish the news that Massachusetts is not one of the 10 fiscal basket cases. These optimists can put a good spin on almost anything. Sobering realists, however, would note that, according to the Pew Center on the States, Massachusetts is the 19th worst state in terms of fiscal peril, hardly any cause for comfort.
The Pew Center on the States is a richly informative initiative created by the Pew Charitable Trusts to identify key policy challenges facing state governments and to advance meaningful solutions (www.pewcenteronthestates.org). The Pew Center has analyzed the fiscal condition of all 50 states based on six key indicators: change in state tax revenue, size of the fiscal 2010 budget gap, change in the state unemployment rate, the foreclosure rate, legal obstacles to balancing the budget, and an earlier Pew grade on state money-management practices. Based on the Pew assessment, Massachusetts is certainly not in the league of California or Michigan, but it’s not too far behind.
The Pew authors also point out that the fiscal condition of state governments will deteriorate further in the coming months and will not receive any near-term bounce from a national economic turnaround. Next year will be the worst yet because state tax revenues will still lag, the federal stimulus money is almost gone, and government costs will continue to rise due to increased social service demands through Medicaid and unemployment.
Here at home, fiscal experts are predicting that the fiscal 2011 state budget gap will be as much as $3.5 billion. With only $600 million left in federal stimulus aid for education and other services, and $500 million in the “rainy day” fund, the lifelines that have prevented full-out disaster over the last two years will be inadequate. The governor and lawmakers will face their toughest budget year yet. And so will cities and towns.
In our communities, local leaders are grappling with the largest local aid cut in history, a new round of mid-year reductions imposed by the governor in October, and questions about whether even more mid-cycle cuts could come if the decline in state revenues is worse than predicted.
Localities are adopting the new meals and lodging taxes, maximizing their reliance on property taxes, collecting the personal property tax on telephone poles and wires, and cutting services dramatically. Cities and towns have laid off or eliminated thousands of municipal and school employees, far more than the number of positions reduced by state government.
Our communities and our states cannot continue this downward spiral without causing extraordinary harm to our overall economy, and without compromising our basic safety net and quality-of-life services.
That’s why the status quo just won’t do.
This must be a season of action and reform. The bottom line is that cities and towns need immediate and meaningful relief now. Fiscal 2010 is still not in balance, and fiscal 2011 will be more damaging than either of the past two years.
The MMA has identified five key action steps to bring immediate reform and relief to cities and towns. These are:
1. Removing municipal health insurance decisions from collective bargaining to save taxpayers tens of millions of dollars
2. Fixing the Quinn Bill to end the threat of a new $48 million unfunded mandate due to the state’s decision to walk away from its 50 percent funding promise
3. Closing the $25 million telecommunications equipment tax loophole, which benefits the telephone company but hurts local taxpayers
4. Reforming the flawed charter school funding system, which harms local school districts (This was not accomplished in the Senate version of the recent education bill on charter schools.)
5. Extending pension funding schedules to prevent needless cost increases next year
The failure to pass these five vital reforms will deepen the local fiscal crisis, and will harm our communities, local taxpayers, and our prospects for economic recovery.
Today’s fiscal problems won’t go away on their own. In fact, tomorrow will be even worse if we stand idly by and just hope for the best, or for some unexpected bailout. Any progress will come only after hard work and meaningful action.
We must remember that the status quo is our enemy. Massachusetts will become a true fiscal basket case if we fail to win real reform. The good news is that municipal officials won’t stop until the job is done.
Action, in fact, is the focus of the MMA’s upcoming Annual Meeting in January. “Local Leaders: Acting Today, Building Tomorrow, Creating a Stronger Future” is the meeting’s theme, because that is what municipal officials are doing every single day. And now, more than ever, we must stand united to call for similar leadership and devotion from our partners in state government.
We stand together for reform, we stand united in the cause of local government, and, in January at our Annual Meeting, we will gather together to support, encourage, inform, educate, rally, and build a stronger platform for recovery and renewal.
This is the time for action, not the status quo.
Advocacy Executive Director's Reports Time for action, not status quo
Time for action, not status quo
A recent report by one of the nation’s leading research organizations identifies 10 states that are in extreme fiscal peril. Myopic optimists who ignore the underlying facts would embrace with relish the news that Massachusetts is not one of the 10 fiscal basket cases. These optimists can put a good spin on almost anything. Sobering realists, however, would note that, according to the Pew Center on the States, Massachusetts is the 19th worst state in terms of fiscal peril, hardly any cause for comfort.
The Pew Center on the States is a richly informative initiative created by the Pew Charitable Trusts to identify key policy challenges facing state governments and to advance meaningful solutions (www.pewcenteronthestates.org). The Pew Center has analyzed the fiscal condition of all 50 states based on six key indicators: change in state tax revenue, size of the fiscal 2010 budget gap, change in the state unemployment rate, the foreclosure rate, legal obstacles to balancing the budget, and an earlier Pew grade on state money-management practices. Based on the Pew assessment, Massachusetts is certainly not in the league of California or Michigan, but it’s not too far behind.
The Pew authors also point out that the fiscal condition of state governments will deteriorate further in the coming months and will not receive any near-term bounce from a national economic turnaround. Next year will be the worst yet because state tax revenues will still lag, the federal stimulus money is almost gone, and government costs will continue to rise due to increased social service demands through Medicaid and unemployment.
Here at home, fiscal experts are predicting that the fiscal 2011 state budget gap will be as much as $3.5 billion. With only $600 million left in federal stimulus aid for education and other services, and $500 million in the “rainy day” fund, the lifelines that have prevented full-out disaster over the last two years will be inadequate. The governor and lawmakers will face their toughest budget year yet. And so will cities and towns.
In our communities, local leaders are grappling with the largest local aid cut in history, a new round of mid-year reductions imposed by the governor in October, and questions about whether even more mid-cycle cuts could come if the decline in state revenues is worse than predicted.
Localities are adopting the new meals and lodging taxes, maximizing their reliance on property taxes, collecting the personal property tax on telephone poles and wires, and cutting services dramatically. Cities and towns have laid off or eliminated thousands of municipal and school employees, far more than the number of positions reduced by state government.
Our communities and our states cannot continue this downward spiral without causing extraordinary harm to our overall economy, and without compromising our basic safety net and quality-of-life services.
That’s why the status quo just won’t do.
This must be a season of action and reform. The bottom line is that cities and towns need immediate and meaningful relief now. Fiscal 2010 is still not in balance, and fiscal 2011 will be more damaging than either of the past two years.
The MMA has identified five key action steps to bring immediate reform and relief to cities and towns. These are:
1. Removing municipal health insurance decisions from collective bargaining to save taxpayers tens of millions of dollars
2. Fixing the Quinn Bill to end the threat of a new $48 million unfunded mandate due to the state’s decision to walk away from its 50 percent funding promise
3. Closing the $25 million telecommunications equipment tax loophole, which benefits the telephone company but hurts local taxpayers
4. Reforming the flawed charter school funding system, which harms local school districts (This was not accomplished in the Senate version of the recent education bill on charter schools.)
5. Extending pension funding schedules to prevent needless cost increases next year
The failure to pass these five vital reforms will deepen the local fiscal crisis, and will harm our communities, local taxpayers, and our prospects for economic recovery.
Today’s fiscal problems won’t go away on their own. In fact, tomorrow will be even worse if we stand idly by and just hope for the best, or for some unexpected bailout. Any progress will come only after hard work and meaningful action.
We must remember that the status quo is our enemy. Massachusetts will become a true fiscal basket case if we fail to win real reform. The good news is that municipal officials won’t stop until the job is done.
Action, in fact, is the focus of the MMA’s upcoming Annual Meeting in January. “Local Leaders: Acting Today, Building Tomorrow, Creating a Stronger Future” is the meeting’s theme, because that is what municipal officials are doing every single day. And now, more than ever, we must stand united to call for similar leadership and devotion from our partners in state government.
We stand together for reform, we stand united in the cause of local government, and, in January at our Annual Meeting, we will gather together to support, encourage, inform, educate, rally, and build a stronger platform for recovery and renewal.
This is the time for action, not the status quo.
Written by MMA Executive Director Geoff Beckwith
