Foundation report: city and town finances 'relentlessly squeezed'

By Globe Staff

City and town governments, who have found themselves slashing programs and services or raising taxes in recent years because of tight finances, are likely to face even greater challenges over the next several years, a report by a government watchdog group said today.

"The finances are being relentlessly squeezed year by year," said Michael Widmer, president of the business-backed Massachusetts Taxpayers Foundation.

The foundation's 37th annual analysis of local revenues and spending found that fiscal 2007 saw a brief reprieve for municipalities with state aid to them growing by 8.1 percent. But the report saw storm clouds ahead.

The 2007 growth largely came from an increase in lottery aid, the report said, and there is "growing evidence that the lottery has matured to the point that it can no longer provide dependable increases" in revenue.

The report also said that municipal finances are being stressed by other factors, including escalating healthcare costs, a weak economy, and an increasing reluctance among voters to approve tax increases.

If solutions aren't found, the report warned, "there will be an acceleration of the cuts in programs and services that have already impacted a large number of communities."

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