BOSTON — State legislative leaders are getting bombarded with complaints from colleagues and constituents over a bill to allow the city of Lawrence to prop up its budget by borrowing up to $35 million.
Outrage over the bill has taken on statewide political overtones. One candidate for governor, Charlie Baker, denounced it on a conservative talk-radio show. Another, Christy Mihos, weighed in against it on a Facebook page set up by a disgruntled former Lawrence employee. Baker and Mihos are Republicans.
Gov. Deval Patrick, who faces re-election this fall, supports the legislation to allow the city to borrow the money to close its $24.5 million budget gap this fiscal year and to get a jump on next year's projected $15 million deficit. Under the bill, if the city's fiscal house isn't in order by January 2011, the state would take over.
State Rep. Karyn Polito, R-Shrewsbury, a member of the Ways and Means Committee, calls it a "bailout," and says Lawrence should be placed into "receivership."
Local legislators say much of the outcry is based on misinformation.
On Thursday, the chairman and vice chairman of the House Ways and Means Committee met with local legislators, including Rep. William Lantigua, who is also mayor of Lawrence.
"We discussed the possibility that our colleagues will need to be educated," said Rep. Barbara L'Italien, D-Andover, vice chairman of the committee. "It's not a bailout. It's a loan to be repaid. We talked about that, and we floated the idea of holding a public hearing about the bill, which would give an opportunity for our colleagues to hear, and for the public to hear, the particulars of the bill. People think it's a handout. It's not. It's a loan."
Committee Chairman Rep. Charles Murphy, D-Burlington, said he's getting "quite a few inquiries" from colleagues, and that he has spoken with House Speaker Robert DeLeo about holding a public hearing to clear the air.
Murphy said he is studying whether the language in the bill is strong enough to ensure that Lawrence doesn't misuse the loan.
Currently, the bill calls for allowing Lawrence to engage in what is known as "deficit borrowing" — allowing the city to borrow even though it doesn't have a balanced budget. The money would be used to balance this year's budget. That would enable the city to start the new year with a clean slate, even though it's projected the city is facing a structural deficit of about $15 million next fiscal year, said Lenny Degnan, Lantigua's chief of staff.
In addition, the bill would require the state to appoint a budget overseer, who would review all city expenditures and revenues and whose salary, estimated at about $120,000 a year, would be paid for by the city.
If, after a year, the city isn't making significant progress then the governor could appoint a five-person control board. The board would assume all of the power of the mayor and city council, including the ability to hire and fire people, negotiate contracts and increase fees, among other powers.
Murphy said it may be too soon to jump right to a finance control board, something being touted by critics of the Lantigua administration.
One of those critics is fired Lawrence Planning Director Michael Sweeney, who started a Facebook page earlier this week calling for a finance control board. Mihos joined to voice his opposition to the borrowing bill.
Mihos said a finance control board should be put into place, similar to what was done in Springfield in 2004. There, severe budget problems, exacerbated by an extreme crime problem, forced the state to appoint a board that took control of the city's finances, turning Springfield back over to local control last summer.
Baker said on a radio talk show hosted by Michelle McPhee on Wednesday that the city should be placed into receivership, much like what happened to Chelsea in 1991. The financial problems there were so severe that Gov. William Weld appointed James Carlin to run the city. Carlin restructured union contracts, cracked down on unpaid water and sewer bills as well as property tax scofflaws. His successor, Lewis Spence, rewrote the city charter. Within a year the budget was balanced. Within three years the city had budget surpluses.
Rep. Polito, said she thinks Lawrence is getting special treatment. She said in an interview yesterday that under normal circumstances, a city in such dire fiscal shape would already be in receivership or under the control of a finance board.
"Simply giving the city more money to spend appears not to be the answer, no matter what legislative strings might be attached to it," she wrote in a letter to Gov. Patrick. "There is no evidence that Lawrence has the municipal infrastructure in place to handle this problem on its own. Reminiscent of similar situations in Springfield and Chelsea in the past, it appears that receivership would be a better option."
But local officials, including Lantigua's chief of staff Degnan, warns that people should be "careful what they wish for" and that it would be a mistake to lose local control of city financial decisions.
He said Lantigua has a plan to trim expenses, including asking for givebacks from the city's unions, many of which just got a 3.5 percent pay raise based on contracts negotiated by the previous administration. He noted that layoffs will also be necessary, but will be made "with compassion." A control board, he said, "doesn't care" about the people who work in the city, and would take a more impersonal approach to cutting the budget.
Local legislators echoed those comments.
Rep. Barry Finegold, D-Andover, said the situation is nothing like Springfield. "Lawrence is asking to borrow money," he said. "This is not like Springfield, where the state gave them $50 million. Plus, Springfield had a massive crime problem. In Lawrence, (police Chief John) Romero has done an amazing job of reducing crime. In Springfield, businesses were leaving left and right. Here, we have doctors' offices leaving North Andover and coming to Lawrence. So it's really a different situation."
Rep. David Torrisi, D-North Andover, said some legislators and constituents might be against the bill because they dislike Lantigua.
"Do they want a control board because it's personal with Lantigua?" he asked. "Or do they want it because it's best for the city?"
Attempts to reach Lantigua for comment were unsuccessful.
