Municipal Relief Testimony

Statement of the Suburban Coalition

Before the Joint Committee on Municipalities and Regional Government

May 15, 2009


Thank you for the opportunity to speak to you this morning regarding the recommendations of the Special Commission on Municipal Relief.  We most certainly appreciate the creation of this commission and the in-depth look at ways to help communities continue to provide the essential services of public safety, education and infrastructure maintenance to our citizens.  We also appreciate the willingness to look both at changes that would help us be more efficient and at revenue enhancement opportunities.


We’d like to highlight a few areas of the report that we believe are particularly important:


In the area of health insurance, the Suburban Coalition believes that more management rights should exist to make plan design changes.  Ideally, this would fall fully within the purview of management, without the need for negotiation, as long as the plan met standards defined by the state.  While the recommendations in the report would be a step forward from where things stand now, we don’t believe they will allow communities to fully recognize the costs savings we are all seeking.  When employees know that a municipality must reach an agreement within a time certain or face sanction by the state, it puts the union in a particularly strong, and uneven, bargaining position to win concessions in other areas of the contract.  This could certainly mitigate the gains from changes to a different plan design. 


We are, and have been for a number of years, supportive of codifying the Appellate Tax Board decision on the telecommunications tax loophole. Further, we would urge you to add machinery and equipment to the list of properties that are subject to the property tax.  Repeal of this antiquated loophole will provide much needed revenue to our municipalities.  Further, the current loophole is inequitable to the companies which are taxed on the same equipment for which other companies are not. 


In addition, we urge you to accept the Commissions recommendations on local option revenues.  We have long held that there is an over-reliance on the property tax on the local level.  Institution of a hotel and meals tax would broaden the revenue streams available to municipalities and provide new sources of revenue which are sorely needed. 


The Suburban Coalition has, for many years, asked that rates for private providers of Special Education services be set by the beginning of the fiscal year and that these rates be held to increases in Chapter 70 funding.  We are fully in support of the recommendation to set rates by the beginning of the year, with changes only if the level of service changes on an Individual Education Plan.  Special Education out-of-district costs are the “snow and ice” of school budgets.  Changes in tuition that can top 30% in the middle of the year wreck havoc.  Most often, it is the in-district students, both regular and special education, who are negatively affected when changes must be made to other parts of the budget to cover these unexpected and unbudgeted changes.  In the written copy of our testimony, we are submitting a chart showing the rate increases that some of our member districts have endured during the course of the current fiscal year.  These increases come with no warning and can sometimes be retroactive.


We’d like to make just one comment on the issue of unfunded mandates.  We believe that more investigation and discussion is needed on this issue.  For example, districts used to receive reimbursement for regular education students we are required to bus within our districts.  This money is no longer there, yet we are still required to bus those students and not allowed to charge fees for bussing services.  We must also bus students attending private schools within our districts. If money was received for a required activity, but the money no longer exists, we fail to see how this has not become an unfunded mandate.


Secondly, as the report correctly points out when the Federal IDEA law was passed in 1975 there was a pledge to provide 40% of the costs.  We’re sure that never happened!


We recently learned that we will be required to measure and report to parents on the BMI of students in our district.  Yet, no funds are forthcoming to cover the costs of instituting this protocol.  When an additional activity, which will draw administrative time and resources from other places, is instituted with no commensurate funding increase, is this not an unfunded mandate?  These are just some examples from lists that have been generated by multiple organizations.  We need to avoid getting bogged down in discussions of semantics and have some serious discussions on alleviating the burden imposed on municipalities and school districts so we can redirect as many resources as possible to directly serving our citizens


An item we would like to see considered is to establish a threshold of $25,000 to $50,000 to require the use of prevailing wage on municipal budgets.  This would save money and allow communities to use local contractors for smaller jobs.


The Suburban Coalition is glad to see the proposal for a commission to consider whether certain types of Home Rule Petitions may be excluded from the requirement of state legislative approval. 


In conclusion, these are interesting economic times and reform is an important part of the solution to the fiscal problems that we are facing.  However, revenue enhancement will have to be an important part of the solution.  Tough times require innovative solutions. 

 Again, thank you for the opportunity to appear before you today and thank you for your service to the Commonwealth.

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