Patrick gives and takes aid from citiesDate: 1/26/2011 Jan. 26, 2011
By Katelyn Gendron and G. Michael Dobbs
GREATER SPRINGFIELD — Under his budget plan for fiscal year 2012 (FY12), Gov. Deval Patrick would increase funds to municipalities in some areas and decrease monies in others, prompting area mayors to approach his proposal with a degree of cautious skepticism.
In his speech delivered last week at the Massachusetts Municipal Association's Annual Meeting and Trade Show in Boston, Patrick said, "I am confident better days lie ahead so long as we all work together. With the initiatives announced today, our cities and towns, and their public employee unions, can contain health care costs, continue to assure quality affordable care for workers, and maintain public services."
Local aid to cities and towns will decrease by $65 million. The press release from the governor's office asserted, "While this is a $65 million reduction from fiscal year 2011, it will be offset by the savings realized through the Administration's plan design proposal."
Chapter 90 funds for roads and Chapter 70 monies for schools are both increasing over the current budget by $45 million and $145 million, respectively.
Patrick also believes that cities and towns will be able to save money by joining the Group Insurance Commission (GIC). The governor would have to mandate such a measure by drafting new legislation by 2012. Municipalities can only avoid joining the GIC if they have a plan in place with rates equivalent to the GIC.
Chicopee Mayor Michael Bissonnette said the cut to local aid was "not unexpected." He noted that three years ago Chicopee received $15 million in local aid and now it can expect $8 million.
This continual decrease places pressure on municipalities when added to factors such as the state only picking up a reimbursement rate of 5 percent for Quinn Bill costs instead of 50 percent.
In Chicopee, Bissonnette anticipates a level funded budget with no raises for employees, but hopefully also no layoffs. He said 19 employees are expected to take early retirement, with only five to six of those positions continued. That should provide a savings of about $500,000.
Chicopee is not in the GIC and Bissonnette said city officials are in negotiations with the city's two insurance carriers. In the last three years, private companies have saved the city more money than if it was part of the GIC, he said. He believes cities and towns should have an option to be part of the GIC.
Bissonnette said the city's budget is "very tight."
"It gets tougher every year," he added.
Westfield Mayor Daniel Knapik said he was "very encouraged" by Patrick's proposal to increase state aid for public schools, special education and infrastructure repairs. However, he's skeptical the governor will follow through with his plan.
"Last year when he made his pronunciations, he said we'd receive level funding and we received a 4 percent cut," Knapik recalled. "I take news like that with some interest but will wait until the [State Legislature's] Joint Weighs and Means Committee comes out with their numbers and go from there.
"I don't want to [use] any unduly scare tactics that comes out in public business," he added, referring to the budget process and possible cuts on the municipal level.
West Springfield Mayor Edward Gibson noted that while he's pleased about the governor's proposal to increase school funding, the boost would still not be equivalent to the Chapter 70 funding and stimulus monies the town received last year. "Overall, if you look at it, it's a decreased educational package," he added.
The increasing costs of building and paving materials has inhibited West Springfield from repairing or repaving as many roadways as they'd like, Gibson said, adding that any increase in Chapter 90 funds would be "greatly appreciated."
The mayor said he does not agree with Patrick's mandate requiring municipalities to join the GIC or institute a program equivalent to the policy as West Springfield is self-insured. "By comparison we believe that we are less costly to the GIC," he added.
Gibson, like Knapik, said he'd wait for more concrete local aid figures before making any major budgetary decisions just yet.
Agawam Mayor Richard Cohen concurred, adding that he's not sure the governor's plans will really save municipalities money in the long run.
"It works on paper," he said, noting that any change to health insurance or Medicaid would have to be negotiated with the unions.
"It's a wonderful concept but if the unions don't agree with it, we don't have any recourse," Cohen explained. "We saw a 5 percent increase [in insurance costs last year] when other communities saw a 12 percent increase. Why would communities, like Agawam, want to be melded together with bigger cities, helping [them] to reduce their costs while paying more?"
The mayor believes Agawam's insurance costs are lower than that of the GIC, while providing greater benefits to subscribers.
Cohen said he'd also like to see level-funded state aid. He's asked all department head to prepare level-funded budgets until otherwise informed of cuts by the state.
Springfield Mayor Domenic Sarno said he knew FY12 would be "a difficult year."
"I'm not surprised," he added.
The city receives 60 percent of its budget from the state and Sarno said he has been working with his department heads to cut costs. He starts the city's own budget process in the next few weeks.
A "judicious use of reserves" will help Springfield get through this budget year, he said.
Noting that Springfield is already in the GIC, Sarno said the city has saved "millions."
"I'm hopeful this will be the last year we will face another state reduction in aid," he said.
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