Linsky, House Pass Balanced Budget Reflecting State’s Fiscal Challenges

BOSTON – State Representative David Linsky (D-Natick) joined his colleagues in the Massachusetts House of Representatives in passing a $27.4 billion budget on time that balances the urgent need for additional revenues with necessary relief for cities and towns.

The conference budget contains a sales tax increase from 5 percent to 6.25 percent that will generate $759 million in new revenues for fiscal year 2010 and help restore core services and programs for the citizens of the Commonwealth. Even at 6.25 percent, 30 other states will have a higher aggregate state sales tax rate than Massachusetts.

“Our Commonwealth is facing unprecedented and tremendously difficult choices in crafting our budget as a result of the global recession we are faced with,” said Linsky. “We believe the revenue plan we have put forth – in conjunction with the passage of comprehensive transportation and pension reform bills – alleviates the need for a toll increase on July 1 and will prevent further cuts to local aid, education, and other human services.”

Sales tax revenues will help restore important services that were previously cut, including $10 million for Prescription Advantage, $6.5 million for youth violence prevention grants and $4 million for universal pre-K. The conference budget also generates approximately $80 million from the removal of the alcohol sales tax exemption. That money will be used to restore safety-net services such as substance abuse programs, community health centers, domestic violence prevention, elder care and early intervention programming.

The budget also includes a municipal relief package that allows cities and towns to raise additional revenue locally to maintain essential services provided by schools, police and fire departments. The plan allows municipalities to adopt a local option meals tax of .75 percent and also a 2 percent lodging tax that combined could generate nearly $95 million for cities and towns.

In this year’s budget, Chapter 70 figures for every city and town in the Commonwealth were cut by 2% and local aid cuts ranged between 19 and 29% not accounting for local option taxes. In FY10, Natick will receive $5,727,110 in Chapter 70 money and $3,3357,406 in local aid. In addition, Natick will receive $1,733,013 in State Fiscal Stabilization Fund money through the federal stimulus package. This money is allocated to those school districts that fall below the targeted foundation level and is aimed at averting teacher layoffs and program cuts for K-12 education. With the money it will receive from the stimulus package, Natick will receive $693,041 more than in FY09.

Sherborn will receive $528,026 in Chapter 70 money and $190,846 in local aid. Dover-Sherborn will receive $1,436,198 in Chapter 70.

This year Millis will receive $3,493,858 in Chapter 70 money and $922,449 for local aid. Millis will also receive State Fiscal Stabilization Funds in the amount of $718,540 from the federal stimulus package. With these funds, Millis will receive $393,617 more in FY10 than in FY09.

Chapter 70 money for both Keefe Tech and Tri-County Vocational Schools also went down by 2%, with their allocations being $2,548,930 and $5,319,115 in FY10 respectively.

“I am well aware of the devastating impact that funding cuts will have for schools and municipal services on the three towns in my district,” added Linsky. “Luckily, with the money allocated through the federal recovery package, the blow is significantly lessened. I hope that we are seeing the worst of our budget woes this fiscal year and that we can work to restore local aid and Chapter 70 with the new revenue options we have before us.”

The municipal package also eliminates the property tax exemption on poles and wires located on public property and public rights-of-way that could generate another $26 million locally. It also includes an incentive to develop cost-cutting regionalization agreements to share resources with neighboring communities.

The conference budget also raises the so-called Pacheco Law restrictions on private contractors to a threshold of $500,000; allows Massachusetts to participate in the popular multi-state Powerball lottery game which would bring in additional money; and raises health benefit contributions for all state employees by 5 percent, saving $50 million for the Commonwealth.