Cities welcome stimulus funds, but still wary

Question how far money will go in preventing layoffs

An estimated $12 billion in federal aid and tax cuts could flow to Massachusetts as a result of the new stimulus law, but don't expect to find city and town officials celebrating, at least, not yet.

The money is likely to arrive too late for hard-hit communities that have already laid off employees, and the way it will be distributed means it may not prevent widespread layoffs next year, either.

"The stimulus bill is the galloping ghost; I've yet to see anything," Mayor Edward J. Clancy of Lynn said yesterday, as he prepared for an evening School Committee meeting that centered around 120 immediate layoffs and a possible pay furlough to save jobs. More layoffs could follow July 1.

Most of the money in the $787 billion American Recovery and Reinvestment Act signed by President Obama Tuesday is earmarked for particular programs and projects.

The remaining amount that will filter through Beacon Hill to help city and town operating budgets remained unclear yesterday, and may not be known before the end of the month, officials said.

Governor Deval Patrick, in a speech yesterday to the Greater Boston Chamber of Commerce, said the stimulus act will not be a panacea, adding that "difficult choices" remain ahead for state and local officials.

The federal legislation could forestall some local layoffs, particularly in schools, but will not close broad budget gaps or address structural problems at the local level caused by constrained revenues and rapidly rising costs.

"It helps to relieve some of the pain, but not to avoid the pain," Patrick said.

Patrick estimated that the federal act will provide $6 billion to $9 billion in direct assistance to Massachusetts. That does not include tax relief or grant programs that combined could be worth a few billion dollars, a spokeswoman for the governor said. The total package should be worth about $12 billion to Massachusetts, according to an estimate from the Center for American Progress.

That includes roughly $1 billion for infrastructure projects that the state will distribute, a portion of which will help fix roads, bridges, and schools. Most money will not be available for operating budgets, where the payroll costs are tallied.

Take Boston, where officials estimate that the stimulus act will provide roughly $125 million in direct funding. That does not count money Boston will receive from the legislation through grant applications or money distributed by Beacon Hill, said Jake Sullivan, the city's director of federal relations.

Most is federally targeted for specific programs, such as $30 million for capital, maintenance, and energy-efficiency upgrades to public housing and $2 million for summer jobs. That money will provide real benefits to Boston, but it will not defray an estimated $140 million gap in the city's budget for the fiscal year that starts July 1.

"It can definitely help, but it's not going to solve all of our problems," Sullivan said.

Boston officials estimate the city will receive about $69 million through the education components of the stimulus package, primarily for programs that serve low-income and special-education students.

But that money will have to be divided among the public school district, the charter schools, and the parochial schools, and the state will also receive a portion, said Michael Goar, chief operating officer for the Boston schools.

That could leave the School Department with as little as $25 million, which would be spread over two school years, said Goar. Because it is one-time aid, Superintendent Carol R. Johnson would like to use the money to make long-term investments, such as replacing antiquated textbooks and computers or buying science equipment, rather than saving jobs that might have to be cut a year later, Goar said.

That's a dilemma many officials will face. Mayor Scott W. Lang of New Bedford - who this month laid off about 180 municipal employees, including 76 from the police and fire ranks - said he hopes sufficient money will come from the stimulus package to help prevent substantial layoffs anticipated for the city's schools July 1. He also wants the state to target money specifically for law enforcement.

John C. Drake and James Vaznis of the Globe staff contributed to this report.