Wednesday, February 16, 2011

Economy looms large for Braintree budget

By Joseph Markman

Local lawmakers dove into the "arduous" budget process Tuesday night with the Braintree Town Council, expressing optimism over the economic direction of Massachusetts but also frustration about the ongoing lack of resources available to cities and towns.
 
What began as a slow night – four councilors were absent and the meeting began 20 minutes late – simmered over the next hour or so as Rep. Mark Cusack, D-Braintree, Sen. John Keenan, D-Quincy, and Sen. Brian Joyce, D-Milton, presented the governor's proposal and fielded questions on job creation, local aid and cost cutting measures.
 
"We've probably weathered the darkest hours of this economic storm," Joyce said. "This is just the beginning. The governor's budget is the first step in a somewhat arduous process."
 
Councilors Leland Dingee, Charles Ryan, Tom Bowes, Paul "Dan" Clifford and Sean Powers also agreed on Tuesday to continue a public hearing on re-zoning a portion of Franklin Street to March 15, heard from the town's outside auditors on the fiscal year 2010 budget and sent a letter supporting the East Braintree Civic Association's effort to bring forward more accurate information about the Fore River Bridge project.
 
Unemployment in Massachusetts dipped 1.3 percent from January 2010 to 8.2 percent in December, according to the legislators' presentation. Revenue also improved, increasing $208 million, or 11.3 percent over the past year, and the state's bond rating was raised slightly by Standard and Poor's.
 
"Despite revenues modestly increasing over the last year, we no longer have those federal stimulus dollars," Joyce said.
 
The net effect of that loss, hitting the budget that begins July 1, along with the lack of a serious rebound in state receipts, resulted in Gov. Deval Patrick proposing a $30.5 billion budget, 1.8 percent less than the current fiscal year.
 
General and special education funding would be hiked, though, to the tune of a 5 percent increase in Chapter 70 money for Braintree, totaling $12,154,000. Combine that with an unrestricted local aid cut of 7 percent for the town, and officials will likely see state aid in the amount of $17,170,685, a "modest increase" of $214,336 from fiscal year 2011 – which makes for some difficult choices as the mayor prepares to submit his own budget this spring.
 
The school department, for instance, is requesting a nearly $3.7 million increase in its upcoming budget, 7.8 percent more than the current $47.3 million appropriation.
 
"As you see, it's not a pretty picture," Cusack said. Joyce predicted that Patrick's numbers would not go up or down significantly as the House and Senate weighs in, and that Braintree can reliably use them during its upcoming budget discussions.
 
Still, even without level-funded local aid, as councilor Powers requested the lawmakers shoot for, officials generally agree that Braintree, with its cash reserves of about $7 million and lower-than-average property taxes, is positioned to stay ahead of the recovery curve compared to other cities and towns.
 
State aid accounts for just 14 percent of the town's revenue sources (some communities rely on the state for more than 50 percent). The rest comes from property taxes (60 percent), local receipts such as the car excise tax (25 percent) and other items like federal grants (1 percent).
 
Of the property tax portion, 59 percent is residential, 31 percent commercial, 7 percent industrial and 3 percent personal. "Braintree has an enviable mix," Joyce said.
 
Councilor Clifford pressed the legislators on how they plan to further stimulate the state, saying "We should talk about jobs," and especially incentives for small businesses "to move this economy forward."
 
Last week, the state Senate unanimously approved a measure to freeze the rate businesses pay for unemployment insurance. House members gave an initial g0-ahead on Tuesday. The Senate bill would save $228 per worker on average.
 
"By freezing it, we're keeping $500 million in the private sector where it belongs," Cusack said.
 
Another way to stimulate small businesses, Joyce said, is to cut back on health care costs – a giant chunk of state and private spending – by encouraging cities and towns to join the Group Insurance Commission. Those costs are "drowning" businesses, Joyce said, though he acknowledged that Braintree has already worked on its own, so-far successful change.
 
Clifford also brought up the corporate tax rate, Massachusetts film tax credits and the amount spent on services for illegal immigrants. "Let's just take a look at the numbers," he said.
 
His data, from a number of nonprofit organizations across the country, were hotly disputed by Joyce, who believes the state spends far less on illegal immigrants than the $1.9 billion or $1 billion Clifford quoted. "I accept your premise [on looking for savings], but I do not accept the figures," Joyce said.
 
"I am by no means looking at harming anybody," Clifford responded. "We all came across as immigrants... What is relevant is the monies themselves."
 
Joyce said he is optimistic that the town and the state will be in much better shape within 12 or 18 months. There is "never enough" money for communities, he said, but "our stock and trade is how many of those state dollars we bring back to our cities and towns.
 
Powers urged the delegation to try and improve on Patrick's proposal.
 
"Nobody can complain about that given the current economic climate," he said. "But it can't hurt to ask."