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Page history last edited by PBworks 13 years, 3 months ago

January 13, 2006


The 17 percent increase is biggest in years, will support wide range of local services


At the annual meeting of the Massachusetts Municipal Association, Governor Mitt Romney today revealed that his Fiscal Year 2007 budget will boost state aid to cities and towns by $197.9 million, or 17 percent, over last year’s spending plan, increasing funding above the pre-fiscal crisis level of 2001.


“We owe a debt of thanks to our cities and towns that shared in the sacrifice as we succeeded in getting the state back on its feet again. It's been a long road back, but we are once more in a position to share our growth revenues with local communities,” said Romney.


The budget to be filed by Romney later this month will propose to increase the aid distribution to localities from $1.155 billion in the current year to $1.353 billion, partly by immediately uncapping lottery revenues. During the fiscal crisis, the lottery revenue distribution to cities and towns was capped in order to help the state balance its budget, and was due to be phased out over a period of years.


In 2001, local aid totaled $1.276 billion, the high point in the state’s history, but that number shrank as state revenues collapsed and the Commonwealth struggled to balance its own budget. The 2007 figures announced by Romney are $77 million higher than the pre-fiscal crisis level of 2001.


While total state revenue growth in Romney’s budget is forecast at four percent, local aid will grow by more than four times that amount, or 17 percent, one of the biggest increases in recent history.


Specifically, the Governor announced that:



The immediate, 100% uncapping of the lottery will yield an additional $158.7 million for cities and towns.


The category of local aid known as Payment in Lieu of Taxes, or PILOT, which compensates cities and towns where tax-exempt state properties are located, will go up by $9.2 million to $25.3 million.


An additional $30 million will be available to cities and towns through a new Housing Incentive Program to be distributed via the lottery formula. Municipalities that demonstrate improvement in the creation of new housing will be eligible to receive these funds. Nearly two-thirds of all communities have already submitted municipal scorecards to the Office of Commonwealth Development demonstrating progress in this area.

“The successful partnership between the Commonwealth and our cities and towns over the past three years has yielded some important new efficiencies and helped the state through difficult times,” said Lieutenant Governor Kerry Healey, the administration’s liaison to municipalities. “Most of our citizens experience government at the local level and we are pleased to restore funding that improves the quality of life for everyone.”


The Governor’s budget for the fiscal 2007 year that starts July 1 is due to be filed with the Legislature on January 25.




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