BOSTON—Legislative budget leaders gave Massachusetts cities and towns grim news Friday, telling them to brace for a local aid cut of up to 4 percent in the coming budget year.
In a joint statement, Senate Ways and Means Chairman Steven Panagiotakos and his House counterpart, Rep. Charles Murphy, said unrestricted state aid -- often used to pay police officers and firefighters -- as well as state education funding would be trimmed up to that amount.
The reduction in education funding would be lessened, though, if a 4-percent cut meant a city or town would fall below so-called per-student "foundation" levels established in a 1993 school reform law.
Boston, the biggest city in Massachusetts, faces 4 percent cuts in both accounts. The North Shore city of Salem faces a 4 percent cut in unrestricted aid, but a cut of less than a half-percent in education funding. Anything more would push it below its designated foundation level.
The two-paragraph statement from Panagiotakos and Murphy contained no elaboration, except to preface the cuts by saying they continue "the Legislature's commitment to supporting core services at the municipal level through state-funded local aid payments."
Salem's mayor said the cuts will mean job losses in core services.
"A level-funded budget means layoffs: four police officers, 4 1/2 firefighters," said Democrat Kim Driscoll, citing what she viewed as the best-case scenario for her seaside community. "Anything more means even more personnel cuts. We've already looked everywhere else. Now, we're at people."
Driscoll called on House and Senate lawmakers to give cities and towns the same flexibility to trim insurance costs as is enjoyed by the state.
Under current law, the state can hike premiums and alter copays with the approval of the Group Insurance Commission. But municipalities need the approval of 70 percent of the members of each of their collective bargaining units.
Salem could save $1 million annually if it increased its copays for doctor visits from $5 to $15, but its unions have rejected such a change.
"As things stand now, you're going to your employees to ask them if they want to pay higher insurance premiums," said Driscoll.
An aide to Boston Mayor Thomas M. Menino echoed the sentiment.
"We're not totally surprised," said spokeswoman Dot Joyce. "Any cuts in local aid are difficult, and we hope the Legislature would take this opportunity to consider changes to municipalities' ability to change health care costs."
The legislative statement, delivered at a time of the week when politicians often try to bury bad news, reflects a turnabout from rosier projections made earlier this year by Gov. Deval Patrick.
In January, the Democrat released a $28.2 billion budget proposal for the fiscal year beginning July 1 that maintained unrestricted and education aid for cities and towns, while increasing taxes on candy and soda. It also scaled back a tax credit that has lured movie makers to Massachusetts.
The governor said the tax increases and credit reduction were necessary to close a deficit left by shortfalls in other state collections, but Republicans criticized the budget for being 3 percent bigger than the state's current spending plan.
On Friday, House Republican Leader Bradley H. Jones Jr. issued a follow-up statement saying: "It is particularly disappointing that our cities and towns are bearing the brunt of the poor choices made by the Democratic leadership."
Leaders in the Democrat-controlled House and Senate also said the plan proposed by Patrick relied too heavily -- by some $600 million -- on anticipated federal stimulus money, and drew too deeply -- to the tune of $200 million -- on the state's rainy day account. And they said the 160 House members and 40 senators had no appetite for tax increases.
While some said they feared Patrick was setting them up to deliver the bad news, Senate President Therese Murray, House Speaker Robert DeLeo and their respective budget leaders declared Friday their respective chambers will adopt a 2011 fiscal year budget that cuts local aid.
They have said doing so will lessen the blow of an even deeper cut projected for the 2012 fiscal year, after the Obama administration's federal stimulus bill ends.
The House will be next to unveil a budget plan, before senators outline their own proposal.
But the agreement signals that their position on local aid cuts will prevail in whatever is approved by the Legislature.
Patrick said in response that his proposal "was the right thing to do."
"It supports local services and keeps the pressure off the property tax," he said.
