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TR-2014-48 OPPOSING CUTS IN LOCAL AID J TR-2014-'42 A RESOLUTION OPPOSING MID-YEAR CUTS TO UNRESTRICTED GENERAL GOVERNMENT AID AND CHAPTER 70 EDUCATION AID Sponsored by Councilor George Bitzas Whereas, Chapter 70 and unrestricted municipal aid are vital to the stability of Agawam Municipal Budget,and Whereas, Governor Patrick has announced his intention to cut Chapter 70 and unrestricted municipal aid; and Whereas, at this point in the year, cuts in municipal or school funding accounts would be extremely painful at the local level;and Whereas, the Massachusetts Municipal Associations has met with Administration officials for the Governor's office and Administration officials responded that they appreciated the "input," but did not take local funding cuts off the table; and Whereas, the Administration is providing no specific explanation of the non-tax shortfall in the state budget, independent budget analysts expect that a significant cause is the breakdown in the state's health insurance exchange website, which forced state officials to enroll thousands of residents in temporary Medicaid plans,for which the state will not receive full federal reimbursement;and Whereas, last time Gov. Patrick faced a mid-year budget deficit was in December 2013, when state was projecting a$540 million deficit. The Governor used his budget powers to impose $28.75 million in mid- year cuts to important municipal and school aid accounts, which left cities and towns reeling from unexpected revenue losses. NOW, THEREFORE, BE IT RESOLVED BY THE AGAWAM CITY COUNCIL that the Agawam City Council strongly opposes any cut to unrestricted municipal aid and Chapter 70, because such cuts would destabilize local budgets in the middle of the fiscal year, and force reductions in community services; AND FURTHER RESOLVES that this Resolution be forwarded to Governor Patrick, Speaker De Leo, Senate President Murray,Senator Humason,and Representative Boldyga. Dated this day of 2014. PER ORDER OF THE AGAWAM CITY COUNCIL L C` V G f VChri opher C.Jo on, President P RQVE AST ORM AND LEGALITY �� ffo Vincent F. ,City Solicitor Cc (t- T7zl�J�th�P1Z� --rt-96113-LN MAYORAL ACTION Received this 41 day of-L-Va- M`x �' ,2014 from Council Clerk. Signed by Council President this �J day ofD&nIkr ,2014. APPROVAL OF LEGISLATION By the powers vested in me pursuant to Article 3 Section 3-6 of the Ag �aw>R�harter as ended, I hereby approve the passage of the above legislation on this L!� day of r 2014. Richard A. Cohen, Mayor DISAPPROVAL OF LEGISLATION By the powers vested in me pursuant to Article 3, Section 3-6 of the Agawam Charter, as amended, I hereby veto the passage of the above legislation on this day of 2014 for the following reason(s): Richard A. Cohen,Mayor RETURN OF LEGISLATION TO COUNNCEL CLERK Returned to Council Clerk this day of O Q(YI�& 2014. r TR-2014- A RESOLUTION OPPOSING MID-YEAR CUTS TO UNRESTRICTED GENERAL GOVERNMENT AID AND CHAPTER 70 EDUCATION AID Sponsored by Councilor George Bitzas Whereas, Chapter 70 and unrestricted municipal aid are vital to the stability of Agawam Municipal Budget; and Whereas, Governor Patrick has announced his intention to cut Chapter 70 and unrestricted municipal aid; and Whereas, at this point in the year, cuts in municipal or school funding accounts would be extremely painful at the local level; and Whereas, the Massachusetts Municipal Associations has met with Administration officials for the Governor's office and Administration officials responded that they appreciated the "input," but did not take local funding cuts off the table; and Whereas, the Administration is providing no specific explanation of the non-tax shortfall in the state budget, independent budget analysts expect that a significant cause is the breakdown in the state's health insurance exchange,website, which forced state officials to enroll thousands of residents in temporary Medicaid plans, for which the state will not receive full federal reimbursement; and Whereas, last time Gov. Patrick faced a mid-year budget deficit was in December 2013, when state was projecting a $540 million deficit. The Governor used his budget powers to impose $28.75 million in mid- year cuts to important municipal and school aid accounts, which left cities and towns reeling from unexpected revenue losses. NOW, WHEREFORE, BE IT RESOLVED BY THE AGAWAM CITY COUNCIL that the Agawam City Council strongly opposes any cut to unrestricted municipal aid and Chapter 70, because such cuts would destabilize local budgets in the middle of the fiscal year, and force reductions in community services; AND FURTHER RESOLVES that this Resolution be forwarded to Governor Patrick, Speaker DeLeo, Senate President Murray, Senator Humason, and Representative Boldyga. Dated this day of 12014. PER ORDER OF THE AGAWAM CITY COUNCIL Chri opher C.Jo on, President AP RQUE AST ORM ANQ LEGALITY Vincent F. c , City Solicitor Deval Patrick proposes cuts to local aid as part of$329 million in Massachusetts budget r... Page 1 of 3 r MUR Deval Patrick proposes cuts to local aid as part of $329 million in Massachusetts budget reductions 071414 deval patrick.JPG Massachusetts Gov. Deval Patrick is proposing cuts across state government, including to local aid, in order to fill an anticipated $329 million shortfall in the budget. (JIM COLE/ASSOCIATED PRESS FILE) _ Shira Schoenberg I sschoenberg@repub.com By Shira Schoenberg I sschoenberg@repub.com Follow on Twitter on November 19, 2014 at 6:09 PM BOSTON — Massachusetts Gov. Deval Patrick, a Democrat, is proposing cuts across state government, including to local aid, in order to fill an anticipated $329 million shortfall in the budget. "We are principally solving this gap through spending reductions crafted with the care and thoughtfulness that has qualified prior efforts by Governor Patrick to close emerging budget gaps," said Secretary of Administration and Finance.Glen Shor. "We have done our very best to protect investments that are critical to the Commonwealth's future and avoid negative impacts on the most vulnerable of our residents." Patrick will make $1913.1 million in reductions to the executive branch, something he can do unilaterally. But some of the cuts will require legislation, including Patrick's proposal to cut local aid by $25.5 million - returning it to the level it was funded in fiscal year 2014. Patrick had proposed funding local aid at that level this year, but the Legislature, which has historically balked at cutting local aid, decided to add the extra $25 million. Patrick is not cutting local education aid. But some of the other line items he is cutting will also impact city and town budgets. Cities and towns have already passed their municipal budgets, so cuts will force them to reconsider their spending. Geoff Beckwith, executive director of the Massachusetts Municipal Association, accused the governor of "deficit-shifting" from the state to cities and towns. "The governor's package is very bad news for cities and towns in every corner of the state and will shift the state's fiscal problems onto communities in the middle of the fiscal year," Beckwith said. Beckwith said the executive branch cuts will immediately cut $40 million from city and town budgets through cuts to regional school transportation, special education reimbursements, vocational school transportation, charter school reimbursements, extended learning time grants and other programs. Beckwith said municipal leaders will lobby the Legislature to oppose the local aid cuts, but cities and towns will have to deal with the loss from specific municipal and local education programs. http://blog-masslive.com/politics_impact/print.html?entry=/2014/l l/deval_patrick_propo... 11/20/2014 Deval Patrick proposes cuts to local aid as part of$329 million in Massachusetts budget r... Page 2 of 3 V January 15, 2013 - Shor said local aid cuts are no different than executive branch agencies being Springfield -Glen Shor, state secretary of asked to recalibrate their expectations. "They've been creative and thoughtful in administration and finance. identifying savings and being able to fulfill their core mission even with less Mi Gordon funding than originally anticipated. We hope cities and towns will be able to do Gord likewise," Shor said. Sen. Stephen Brewer, a Barre Democrat and the outgoing chairman of the Senate Committee on Ways and Means, said he does not anticipate that the Legislature will cut local aid. "You really have to hit Armageddon to do that," Brewer said. "Past is prologue, and past history does indicate that those exercises aren't received all that well by the Legislature," Brewer said. Asked where the Legislature might find $25 million if it does not cut local aid, Brewer said he is hopeful that revenues will increase as the economy improves and there will be "an ongoing discussion" as the fiscal year progresses. Brewer said he disagrees with the cut to regional school transportation funding, but agrees with the governor's decisions to fulfill obligations to the pension fund, not withdraw money from the rainy day fund and protect senior home care and scholarship programs. "There is no cutting mechanism that is devoid of any pain," Brewer said. "I don't envy (Patrick) having to cut $329 million." Rep. Brian Dempsey, a Haverhill Democrat and chairman of the House Ways and Means Committee, could not immediately be reached. The Department of Children and Families - where recent cases of children who died under supervision shed light on management, staffing and caseload problems - will not be cut. Early education and childcare funding, scholarship money and public college funding were also spared. The executive branch cuts span a wide range of agencies. Some of the largest cuts come from the Department of Health and Human Services, which will lose $80 million in state money, which translates to $111 million counting federal matches. A large amount will come from MassHealth, and will include cuts to hospital and nursing home reimbursement rates. The state will delay the implementation of new programs at the Department of Mental Health and in welfare, where the state had planned to start a pilot program to provide job and education training to welfare recipients. The administration also proposed a $10 million cut to the Department of Transportation and $21.8 million in reductions of 1.5 percent at non-executive agencies, such as the attorney general's office, the court system and the secretary of the commonwealth. These must be approved by the Legislature. Patrick also reached an agreement with quasi-public agencies to return $29 million to the state. These are organizations that were supposed to get money from an economic development bill - including a transformative development fund, which pays for building projects in Gateway Cities, a brownfields cleanup http://blog.masslive.com/politics_impact/print.html?entry=/2014/11/deval_patrick_propo... 11/20/2014 Deval Patrick proposes cuts to local aid as part of$329 million in Massachusetts budget r... Page 3 of 3 fund and MassDevelopment, which offers financing and real estate development services to projects that strengthen the state's economy. Emme Schultz, assistant secretary for budget and fiscal operations, said the programs will scale back or find other sources of funding. Finally, the state anticipates taking in $44.6 million in additional revenue from federal reimbursements and other sources. The new Legislature will take seats in January, at the same time as Gov.-Elect Charlie Baker, a Republican, takes office. The spending bills are likely to be taken up only once the Legislature returns. Currently, the Legislature is meeting only in informal sessions, where it can pass bills that do not face opposition. Shor first said earlier this month that the administration was facing a $325 million shortfall in the current fiscal year, which started in June. A reduction of the state income tax from 5.2 percent to 5.15, which will happen if the state meets certain economic triggers, will cost the state $70 million. Patrick signed an $80 million economic development bill in August, which legislative leaders said then would be paid for by money left over in the 2014 budget. But Shor said the bill was counting on increased 2015 revenues, which never materialized. Shor also cited a $175 million drop in non-tax revenues, which include fees and fines, federal reimbursements, and transfers from funds such as the rainy day fund. The Massachusetts Taxpayers Foundation, a think tank that deals with fiscal issues, estimates that the budget gap is even larger — $500 million to $600 million. Andrew Bagley, director of research and public affairs for the foundation, said that estimate is based on factors like the rate of corporate tax settlements and costs for health and retirement benefits for employees and retirees. The total state budget is $36.5 billion. © 2014 massiive.com. All rights reserved. http://blog.masslive.com/poiitics_impact/print.htrnl?entry=/2014/11/deval_patrick_propo... 11/20/2014 Vincent Gioscia From: George Bitzas <GBitzas@agawam.ma.us> Sent: Wednesday, November 19, 2014 11:40 AM To: Vince Gioscia Subject: Fwd: Governor's Office Reveals$325M State Budget Deficit in FY 2015 Sent from my iPad Begin forwarded message: From: Massachusetts Municipal Association <alerts .mma.org> Date: November 13, 2014 at 337:06 PM EST To: George Bitzas <GBitzas(cr,agawam_.ma.us> Subject: Governor's Office Reveals $325M State Budget Deficit in FY 2015 Reply-To: "vsclafaniamma.org" <vsclafani@,mma.org> Thursday, November 13, 2014 GOVERNOR'S OFFICE REVEALS $325M STATE BUDGET DEFICIT IN FY 2015 • Gov. Patrick Plans to Announce $325M in Budget Cuts Next Week • Municipal and Education Accounts Could be Targeted for Mid-Year Cuts $325M State Budget Shortfall Announced -Last week, Gov. Patrick's Secretary for Administration & Finance announced that the state is facing a $325 million shortfall in its fiscal 2015 budget, and said that the Administration would be unveiling plans to close the budget gap at some point during the week of November 17th. He said that the plan would not draw from the state's $1.2 billion stabilization fund, but instead would rely exclusively on mid-year spending cuts. The MMA has Called on the Patrick Administration to Avoid any Mid-Year Cuts Targeted at Cities and Towns - In a face-to-face meeting with A&F Secretary Glen Shor and top Administration officials at the November 12 meeting of the Local Government Advisory Commission meeting. the MMA and local leaders presented a strong case that cities and towns should not be hit with mid-year cuts, especially since the shortfall is in no way related to i local government or the overall performance of the economy, and is primarily due to state spending decisions and the administration of state government. At this point in the year, cuts in municipal or school funding accounts would be extremely painful at the local level. However, Administration officials responded that they appreciated the "input," but did not take local funding off the table. State Budget Gap Caused by Shortfall in "Non-Tax" Revenues, Spending in the New Economic Development Act, and a Cut in the Income Tax Rate —A&F Secretary Glen Shor stated that the $325 million shortfall is caused by several factors. First, although state tax revenues are still expected to meet expected levels, the state income tax rate will be automatically reduced from 5.2 percent to 5.15 percent, effective on January 1, a cut that will be triggered by existing law. This will reduce the state's fiscal 2015 tax revenues by $70 million. Second, lawmakers and the Governor approved an $80 million economic development bill late last summer, and state revenues are not growing fast enough to offset the cost. Finally, and most importantly, the Patrick Administration is now reporting a $175 million shortfall in non-tax revenues and agency fees. While the Administration is providing no specific explanation of the non-tax shortfall, independent budget analysts expect that a significant cause is the breakdown in the state's health insurance exchange website, which forced state officials to enroll thousands of residents in temporary Medicaid plans, for which the state will not receive full federal reimbursement. Governor Can Impose Mid-Year Cuts on Spending in State Agencies Under His Control, and Ask Legislature for Authority to Cut Local Aid, the Judiciary and Others—Facing a $325 million budget shortfall,the Governor has the authority to unilaterally cut spending in executive branch agencies under his control. In addition, the Governor can ask the Legislature to grant him expanded budget-cutting authority over other accounts outside of the executive branch, such as Unrestricted General Government Aid, Chapter 70 school aid, constitutional officers, the judiciary and independent agencies, a step he has taken in the past. With the Legislature in informal session and only able to pass items with unanimous consent, it is unlikely that legislators would grant Gov. Patrick expanded budget reduction powers targeting local aid, but if that is one of the Governor's proposals, local officials will need to contact their Representatives and Senators immediately. Important Municipal and School Aid Accounts May be Targeted for Mid-Year Cuts—The last time Gov. Patrick faced a mid-year budget deficit was in December 2013, when state was projecting a $540 million deficit. The Governor used his budget powers to impose $28.75 million in mid- year cuts to important municipal and school aid accounts, which left cities and towns reeling from unexpected revenue losses. In 2013, the mid-year reductions included a 5% cut to the Special Education Circuit Breaker program, a 47% cut to the McKinney-Vento homeless student transportation account, a 70% cut to the Chapter 70 pothole account, a 3% cut in Veterans' Benefits reimbursements, a 1% cut in regional school transportation funding, a 1.4% cut to charter school reimbursements, and other important accounts. In addition, the Governor asked the Legislature to cut $9 million from Unrestricted General Government Aid, a request that lawmakers rejected. 2 • PLEASE ASK YOUR LEGISLATORS TO OPPOSE ANY PROPOSAL TO IMPOSE MID-YEAR CUTS TO UNRESTRICTED GENERAL GOVERNMENT AID OR CHAPTER 70 EDUCATION AID -- The MMA will strongly oppose any cut to unrestricted municipal aid or Chapter 70, because that would destabilize local budgets in the middle of the fiscal year, and force reductions in community services. Unrestricted municipal aid has already nearly $400 million below original fiscal 2009 levels, and any additional cuts would be painful for cities and towns across the state. in addition, please tell your legislators that you are very worried about potential cuts to important municipal and school accounts in the state budget, including the Special Education Circuit Breaker, McKinney-Vento funding, charter school and regional school transportation accounts, and other programs. Please Call Your Representatives and Senators Today and Ask Them to Oppose Any Proposals to Cut Municipal or Education Aid, and Share Your Concerns About the Impact of Mid-Year Cuts to Local Programs and Services. x 1Massachusettss1MunicipalfAsso'ciation one.Vl i tfi6 Sgtaare,-8ost on,•MA 02110 (617)426-7272 All contents copyright 2014,,Massachusetts'.Wnicipal Association Td-Opt-Out of future Legislative Alert Notifications Click Here. 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