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Area lawmakers say local aid outlook improving

  • State <br/>Rep. Stephen Kulik<br/><br/>GAZETTE FILE PHOTO
  • <br/>Northampton Mayor David Narkewicz, left, and State Rep. Peter Kocot<br/><br/>GAZETTE FILE PHOTO
  • <br/><br/>KEVIN GUTTING<br/>Tony Clarke, left, speaks at an event billed by MassDevelopment as 'Milestones at V

Several speakers at an override forum held at the Bridge Street School Wednesday, including Mayor David J. Narkewicz, said the city’s precarious situation stems largely from the drop in state aid, which stood at $13.5 million in 2002, but has remained in the $9 million range for the past four years.

The situation is prompting voters to decide for the second time in four years whether to raise their taxes to save jobs and fund city and school services. City residents approved a $2 million general override in 2009.

While efforts are under way to lobby Beacon Hill legislators to reform the formula that determines state aid to cities and towns, including a 20-year-old education funding program, that doesn’t help with the immediate problem, many say. Taxpayers’ frustrations are mounting.

“I have a question about why (state Sen.) Stan Rosenberg and (state Rep.) Peter Kocot aren’t here,” said Leeds resident Garson Fields as he stood up during the question portion of Wednesday’s forum to address the state’s role in the city’s budget situation. “Are those guys alive?”

Fields’ comment provoked cheers from the audience and at least one person in the crowd muttered that Rosenberg and Kocot, who represent Northampton in the state Legislature, should have been at the forum to take part in a difficult community conversation.

In fact, both Kocot, D-Northampton, and Rosenberg, D-Amherst, were at the Statehouse on Wednesday working on budgetary and financial matters, including bond and health care bills. At one point Wednesday, Kocot had to interrupt a phone interview with the Gazette to enter the legislative chambers to take a roll call vote.

In interviews this week, the area’s veteran lawmakers expressed optimism that state revenues are improving amid a slow economic recovery and will continue to improve over the next several years.

Kocot said while he understands the financial pressures faced by Northampton, they should not be pinned on the western Massachusetts delegation but on larger forces.

“It was a messy financial crisis and it was a worldwide crisis,” he said in reference to the Great Recession. “Obviously, state revenues have not kept pace with salary increases and health insurance increases. That’s a clear fact.”

But he said there’s reason for hope.

“Slowly but surely, we are coming out of this economic crisis,” he said. “Economists are telling us that in 2014, growth in Massachusetts is probably going to jump 4 percent. I do think it’s going to change.”

Kocot is co-sponsor of a tax reform bill known as “An Act to Invest in Our Communities” that would raise $2 billion in revenue. The bill, introduced for the second time, seeks to raise money through a combination of income tax and capital gains tax rate increases while increasing personal and other exemptions. The legislation is in committee and the revenue projection mirrors the $2 billion tax package that Gov. Deval Patrick proposed, but which has been picked apart by lawmakers.

“My progressive colleagues and I are all working very, very hard to change the tax code,” Kocot said. “We’re trying to make the tax code more transparent and more common-sense based.”

Kocot said he and Rosenberg have repeatedly filed bills for state constitutional changes that would bar graduated income tax rates and recently found support from only 20 of 160 House members for increasing the state income tax, he said.

Meantime, Rosenberg said he is working to boost revenues through an Internet sales tax and by identifying unproductive loopholes in the state’s tax code that should be closed or changed.

New revenues from gaming will be on the books in the near future to add to revenue growth, and state Chapter 90 highway money for cities and towns is pegged at $300 million this year, up from $100 million last year, he said.

“Local aid is always a high priority in the budget,” Rosenberg said. “We keep pushing for more to go into the local aid formulas.”

State education aid

As for calls to reform the education aid formula at the state level, Rosenberg indicated that’s not happening anytime soon. Northampton, both Kocot and Rosenberg acknowledged, has never fared well financially under the state education aid system which takes into account a host of factors including per capita wealth and property values.

“It is really a circuitous conversation,” Rosenberg said. “Changing the formula is extremely difficult because every time you change it to improve one set of communities, another set of communities gets whacked.”

Rosenberg said changing the formula to a system that is truly equitable is easier said than done.

“People take liberties by simply saying, ‘It’s the formula,’ ” Rosenberg said. “We don’t know what they would have us change. We’re stuck every time we raise the question.”

Asked whether he believes the education aid formula is broken, Rosenberg said, “I know that it doesn’t produce the results that people want.”

“All communities should benefit; they won’t all benefit equally,” he said.

State Rep. Stephen D. Kulik, D-Worthington, said he’s been sponsoring bills to get a review of the foundational formula used in the Chapter 70 education aid program created in 1993.

“I think it’s something we need to look at,” Kulik said. “It hasn’t been updated and I think it’s probably inadequate by today’s cost measurements. The baseline level of spending really needs to be reviewed.”

Like Rosenberg, Kulik said the state needs to provide another multi-year commitment to boosting education aid as it did in the 1990s after the initial reforms, but that would still require an enormous pool of money the state does not have. Regardless, he said, a review of the funding formulas would be beneficial.

“We need to know what we should be spending on education and try to figure out an equitable way to support it,” Kulik said.

Meanwhile, Kulik said lawmakers have given cities and towns some tools to raise new revenues and find costs savings, such as the local hotel and meals taxes and municipal health insurance reforms.

Narkewicz said the city has taken advantage of all of the options the state has made available, though he intends to lobby legislators for more local authority to generate revenue. He’d also like to see the state share a larger percentage of some of these taxes with the city. For example, the city receives about $600,000 a year in meals tax, but that’s a fraction of what it collects.

Kocot said increased state revenues will be the key to getting state lawmakers refocused on examining the education funding formula to ensure that it is as equitable as possible. “The way to get at changing that formula is, politically, you have to assist every community,” he said. “You’re going to need a substantial infusion of new dollars for communities like Northampton.”

Gazette reporter Chad Cain contributed to this story. Dan Crowley can be reached at dcrowley@gazettenet.com.

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