Fiscal conditions have forced service, staffing cuts, according to data
Deep local aid cuts over the past two years, coupled with unavoidable growth in health insurance and other personnel costs, have forced cities and towns statewide to make thousands of personnel reductions, scale back services, and increase property taxes, according to data from the MMA, the Massachusetts Association of School Committees, and the Massachusetts Taxpayers Foundation.
More than 1,000 personnel on the municipal side of local government were cut through layoffs or attrition in fiscal 2003 and 2004 in the 135 communities responding to the MMA’s Fiscal Pressures and Service Delivery survey. Another 360 unfilled positions were eliminated rather than filled in fiscal 2004. (Respondents account for 38 percent of all Massachusetts municipalities.)
Of these personnel reductions, 41 percent were in the area of public safety (police and fire) and 59 percent were in other municipal (non-school) departments.
Communities also instituted hiring freezes (45 percent) and salary reductions or furloughs (14 percent).
The fiscal impact on the school side of local government also has been substantial, according to data from the Massachusetts Association of School Committee’s 2003 Management Information for School Committee Report (raw data).
More than 1,300 full-time equivalent teacher positions have been lost or reduced in fiscal 2003 and 2004 in just the 111 districts that reported data (31 percent of total school districts statewide), according to the MASC data. In addition, more than 110 administration positions were lost or reduced in these districts since the beginning of fiscal 2003.
According to the MMA survey, communities took a number of measures, in addition to personnel reductions, to balance their fiscal 2004 budgets.
On the revenue side, these measures included raising or instituting user fees, increasing property taxes, and drawing on reserves. Seventy-five percent of communities responding to the survey drew down reserves to balance their fiscal 2004 budgets.
To rein in expenses, communities also used service cuts and deferred asset management.
Sixty-six percent of communities deferred capital spending and 44 percent deferred road or building maintenance.
Communities also increased school class sizes (30 percent), closed a school or eliminated school programs (19 percent), and closed a library or reduced library hours (16 percent).
In the area of public safety, communities took the following measures in addition to personnel reductions: reduced the number of firefighters or police officers on duty per shift (24 percent), closed a fire station or eliminated a fire company (6 percent), or closed a police station or eliminated police specialty units (4 percent).
The impact of deep local aid cuts was also noted by the Massachusetts Taxpayers Foundation in its 33rd annual analysis of local revenues and spending, released Oct. 28.
“The state’s fiscal crisis is clearly placing a heavier burden on property taxpayers .… as well as forcing reductions in local programs and services,” said MTF President Michael Widmer.
After sustaining state aid cuts of $109 million in fiscal 2003 (including mid-year 9C cuts), local aid for fiscal 2004 was cut by more than $400 million when compared to original fiscal 2003 funding levels, or an additional $219 million compared to final fiscal 2003 levels.
After a difficult year in fiscal 2003, the fiscal 2004 local aid cuts were that much harder for communities to absorb.
The vast majority of communities (92 percent) responding to the MMA survey reported that they were less able to meet financial needs and provide core services in fiscal 2004 than in 2003. According to the MASC survey, the school-side personnel reductions in fiscal 2004 were almost twice the amount of fiscal 2003.
Looking ahead, 90 percent of communities are less optimistic about their ability to meet financial needs and provide core services in fiscal 2005 than in fiscal 2004, according to the MMA survey.
More than 75 percent of communities face structural budget gaps for fiscal 2005.
The experience of the last recession indicates that it takes cities and towns much longer than the state to recover from fiscal distress. Essential services and local economies were harmed beyond the duration of the last recession.
With communities forced to defer capital spending and maintenance and substantially draw down reserves, local government’s recovery from the current fiscal storm is likely to be prolonged as well.
The MMA survey, sent to all municipal chief executive officials, was designed to assess the impact of the fiscal distress on local services, finances and employment. The MMA received 135 surveys by Dec. 10.
