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Study Finds Aid Reductions Cut Deep Into Berkshires

Staff Reports
iBerkshires
02:16AM / Monday, April 04, 2011
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Click on the town to see the reductions in state and education aid over four years, including the 2012 proposal.
Source: MassBudget's Fiscal Fallout: The Great Recession, Policy Choices, and State Budget Cuts - An Update for Fiscal Year 2012
NORTH ADAMS, Mass. — Berkshire County towns have lost 40 percent or more in state aid over four years as Massachusetts struggled through one of the deepest economic downturns since the Great Depression.

A study released Sunday by the nonpartisan Massachusett Budget and Policy Center details the billions cut from local and state agencies from the fiscal 2009 budget to Gov. Deval Patrick's proposed 2012 budget, including the disappearance of some $10.7 million in general aid to the Berkshires.

According to the report, "unrestricted local aid to cities and towns in fiscal 2012 is projected to decrease by 37.6 percent when compared to 2009 inflation-adjusted funding levels. A series of across-the-board cuts and other modifications to the funding formula have had the effect of reducing Chapter 70 education aid for K-12 schools."

Towns and cities have grappled with cuts, trimming programs, eliminating or simply not filling positions, raising fees and instituting freezes and furloughs. The intensity of the crisis isn't equal; some municipalities have fared better than others depending on their reliance on state aid.
 
"We're coping the best we can. This is the longest running stretch of reductions we've had to make and we're certainly heading toward being forced to restructure," said Lenox Town Manager Gregory Federspiel. The town has seen its state aid drop by $270,000 and school funding will be down $185,000, or 14 percent, in 2012. "I think we've done a decent job of protecting our services; we're still providing the services that people have requested and needed. We're a small county with a total population that could equal that of a small city, we need to rally and get creative."

Pittsfield has lost $4.4 million in unrestricted state aid from 2009 to the figure proposed for fiscal 2012, or from $11.1 million to $6.8 million. That's a 39 percent drop in aid but a fraction of the city's budget, which was $126.9 million for fiscal 2010. MassBudget also calculates the governor's budget will give the city 7 percent less than needed for fully funding Chapter 70 education aid. Chapter 70 funds are about a quarter of the city's budget.

State aid cuts have played havoc, however, with the county's other city. Over the past three years, North Adams has been forced to cut $2.2 million from its $36 million budget. In fiscal 2009, the city received about $5.7 million in unrestricted aid; the governor's proposal puts it at $3.5 million, or nearly 10 percent of the city's revenue. MassBudget also calculates it will get $1.2 million, or nearly 9 percent, below the amount for full Chapter 70 funding.

Mayor Richard Alcombright has pushed through a number of revenue-raising initiatives, includng a sewer fee, raises in property taxes and water fees, and the adoption of meals and rooms taxes.

"Despite all that, I still cannot close a $1 million gap," he said on Friday. "I think the city was just not responding over the years to new ways to raise revenues."

While he'd "take level-funding any day" in Chapter 70 aid faced with the alternative, it's not really level, said the mayor, because costs keep rising 2 to 3 percent a year.

"You've had four straight years of level funding; that's like having a 12 or 15 percent cut ... that money never comes back into your system."

North Adams' high poverty rate and elderly population also makes more vulnerable to cuts to state agencies; human services have been reduced by $162 million statewide and mental health services by $94 million.

Over the past year, city and Northern Berkshire officials have fought to keep Juvenile Court, the Department of Transitional Assistance, adult day health, respite care and early intervention services from closing or consolidating elsewhere.

"You have to look at the differentiation of dependency," said Alcombright. "Williamstown loses aid but it's more of a cut on the arm; where we're 50 percent reliant, it's a cut across the jugular."

Sheffield, for example, has lost $123,000 in aid since 2009, down from $314,000. It's not an insignificant amount for the small South County town but not devastating, either.
 
"The one thing about a small town like Sheffield is that we're not heavily reliant on state aid," said Selectmen Chairwoman Julie Hannum. "In fact, state aid makes up about 3 percent of our budget.

"What was good news for us was that the state aid to the school stayed intact. This sort of thing plays out differently in every town. Our regular local aid is less than $200,000 and while we would definitely be feeling that and probably have to keep trimming services, the Finance Committee is pretty conservative in their estimates. I'm not saying it's a rosy picture but the town finances are in very good shape."
 
Federspiel said Lenox has been taking advantage of the new municipal tools such as the rooms and meals tax to offset some of the increases, such as in health insurance. "We anticipated another reduction in the state budget but we feel like we've been making these efficiency measure quite a bit."

MassBudget traces the roots of the budget crisis back to the late 1990s dot-com bust, when the state lowered taxes, raised personal exemptions and enacted business breaks, thereby lowering overall revenue:

"As a result of these cuts and other changes, tax revenues declined to a little over five percent of total state income by 2009. This $3 billion dollar decline in tax revenue created fiscal instability in both good times and bad over the past 15 years."

Alcombright sees the more local budget troubles as caused in part by policies enacted under the Romney administration when the state suffered an economic downturn after the terror attacks.

"Basically, what he was saying was that we're not going to fund communities when they've got as a percentage of their budget more than the state has," he said, leading communities to raid reserves to maintain services. Reserves that have disappeared when they're most needed.

"We're in a place now where the federal government's not going to to do it, the state government's not going to, we have to take care of ourselves," said Alcombright. "If we want to maintain services, we have to do something."

Figures provided by MassBudget on state aid cuts to the Berkshires can be found here.

iBerkshires staff Tammy Daniels, Andy McKeever and Nichole Dupont contributed to this report.

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