The $128 million question

Governor Deval Patrick announced to a packed house of municipal officials today that he’ll cut municipal aid by $128 million immediately and seek $375 million in further cuts next year.  Patrick also proposed:

  • A 1% increase in the state hotels and meals taxes
  • Cutting more local aid to cities and towns that don’t join the state’s Group Insurance Commission
  • Allowing cities and towns to pass their own meals and hotel taxes

Locally, the cuts are expected to hurt deeply.  While local politicians are relieved at Patrick’s assurance that he wouldn’t touch the $3.9 billion in educational aid this year, that relief is more than tempered by the fact that talk about “core services” is moving from rhetoric to reality.

City Manager Michael O’Brien had already asked his department heads to come up with plans anticipating up to 10% in aid cuts, but sources say that 5%-6% was considered much more likely.  Many of the efforts carried out by the city so far-leaving positions unfilled, etc-would have helped close the gap to 5% quickly; 10% is considered a lot more difficult to meet.

Compounding the problem is that, seven months into the fiscal year, a 10% cut has a much more drastic effect than it does at the start.  If you follow the logic used by O’Brien last week that a 5% cut has a 10% effect halfway through the year, Worcester could be looking at a $12 million effective cut in funding (or $6 million in actual dollars).  Already, the Worcester Parks Commission has expressed their concern over what such drastic cuts could mean.

And Patrick’s heavy-handed move forcing cities and towns to join the GIC could restart the delayed effort here, opposed by some Worcester city unions.

City Councilors will continue to talk about maintaining core services: Streets, sidewalks, public safety, and education.  But the interesting thing to watch will be what services they are OK with cutting when the time comes to meet the heavy gap this year and, to a large extent, in the next budget cycle.

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