Romney eyes local aid hike

Governor Mitt Romney told a gathering of local officials yesterday that he wants to boost general aid to cities and towns by more than 17 percent in the next fiscal year, by far the largest increase in more than a decade.

The extra $197.9 million in nonschool aid might slow fast-rising residential property taxes and enable some communities to begin restoring the jobs and services they cut during the state's fiscal crisis that began more than four years ago. Local leaders are under pressure in many communities to hire more police officers and teachers.

Romney did not disclose his plans for education aid, which makes up more than three-fourths of the money the state funnels to cities and towns, but he promised a ''very significant increase" in that area, as well. The Republican governor is scheduled to begin Beacon Hill's budget debate on Jan. 25, when he unveils his complete blueprint, which will total more than $24 billion.

Yesterday, Romney cast the proposed increase as another sign the state's financial picture has brightened dramatically since he began his gubernatorial term in 2003 by enacting far-reaching budget cuts. ''You took a significant decline during the tough years; as things come back, you should take a disproportionate share as we go back up," Romney told local officials attending the annual meeting of the Massachusetts Municipal Association, a nonpartisan organization representing city and town officials.

The state has raised its spending on cities and towns by single-digit percentages in the past two years. If the Legislature adopts Romney's plan, the state will spend $1.35 billion on nonschool aid in fiscal year 2007, the first time the total will exceed the precrisis high of $1.27 billion. The Massachusetts Taxpayers Foundation puts that high-water mark in fiscal 2000.

The increases might pay political dividends for Lieutenant Governor Kerry Healey. She is the leading Republican candidate to replace Romney, who has said he will not seek reelection, and has served as his liaison to cities and towns, Until now, she has mostly been the bearer of bad news.

But Representative Robert A. DeLeo, the Winthrop Democrat who chairs the House Ways and Means Committee, said he was surprised by the size of the proposed increase and skeptical that it will be possible without significant cuts in other areas.

Romney said yesterday that his proposed state budget for the next fiscal year is based on predicted revenue growth of 4 percent.

''I'm just extremely interested to see how he's going to be able to do that," DeLeo said. ''You're talking about growth of 4 percent, yet this is an extra 17 percent. I'd just like to know where he's going to be cutting to make this work. Are we talking about a little bit of gimmickry on his part?"

As Romney finished his speech to the group, the last one he will deliver to its annual meeting as governor, the crowd gave him a standing ovation. The warm reception contrasted sharply with the frosty relations Romney had with local officials when he took office in 2003. At that time, many mayors and city managers were angry at him for trying to cut state aid to cities and towns at the same time he was attempting to change the formula for handing it out.

Mayor David Cohen of Newton, one of Romney's sharpest critics during those days, described yesterday's announcement as ''a magnificent start."

''He understands that cities and towns are really providing the base of service on which economic growth and economic stability depend, so I'm very pleased," Cohen said.

But other mayors were less enthusiastic. When the figures are adjusted for inflation, the $1.35 billion that Romney wants to spend is still significantly less than what cities and towns got before the fiscal crisis, and fast-rising healthcare and pension costs have been outpacing inflation.

Mayor Edward M. Lambert Jr. of Fall River pointed out that $158.7 million of the new money that Romney is proposing to spend on cities and towns comes from lottery revenue, all of which is supposed to be sent to communities. Since the fiscal crisis, the state has been keeping some of the money for itself.

''Look, this is a good announcement," Lambert said. ''But we also recognize that this was our money to begin with. What we want to do now is work with the governor and the Legislature . . . to get a steadier flow of state aid back to reduce the reliance on property taxes, because it's a regressive tax and it's killing working families across the Commonwealth."

Before Romney spoke, Mayor Thomas M. Menino of Boston said that cities and towns are ''struggling like never before."

Addressing Romney, Menino asked for the power to raise additional money through a restaurant meals tax or other sources. ''I simply cannot educate our children, police our streets, and make this capital city a wonderful place to visit unless you give me the tools to do so," he said.

One of the Democratic gubernatorial candidates, Deval L. Patrick, has endorsed the idea of allowing Boston and other municipalities to impose a meals tax, but Attorney General Thomas F. Reilly, a Democrat, opposes it.

Romney also dismissed the idea of new local taxes yesterday. He has said that local officials are largely to blame for their plight by signing generous contracts with city and town employees and blocking development that could spur new tax revenue. Romney, however, recently offered State Police a contract boosting pay up to 19 percent by January 2008.

''No new taxes, no increase in taxes," Romney said. ''We have to live within our means."

Scott Greenberger can be reached at greenberger@globe.com.