EagleTribune.com, North Andover, MA

March 5, 2013

Legislators make pledge to press for more state aid

By Paul Tennant

---- — NORTH ANDOVER – The two Republicans and two Democrats who represent North Andover in the Legislature told local officials yesterday morning they will try to secure as much financial help for cities and towns as possible.

Senate Minority Leader Bruce Tarr, R-Gloucester; Sen. Kathleen O’Connor Ives, D-Newburyport and Reps. James Lyons, R-Andover and Diana DiZoglio, D-Methuen also said they would urge the state Department of Transportation to make Route 114 safer for pedestrians and to include North Andover’s name on Interstate 495 signs.

Town Moderator Mark DiSalvo suggested that the town’s entire name be inscribed on the signs instead of the abbreviated form of “No. Andover.”

Gov. Deval Patrick has submitted a budget of $36.5 billion – an increase of 7 percent over last year’s spending plan. Tarr called it a “dramatic expansion of spending.”

Selectman Rosemary Connelly Smedile called the proposed increase “outrageous.”

To pay for the higher budget, Patrick wants to raise the income tax from 5.25 percent to 6.25 percent and trim the sales tax – which climbed from 5 percent to 6.25 percent two years ago – to 4.5 percent. The governor also seeks to eliminate several personal exemptions and deductions from the income tax.

The tax hikes Patrick is recommending amount to nearly $2 billion. Tarr, who has served as a state lawmaker for more than two decades, said Patrick’s budget “will not be adopted in its entirety by the Legislature.”

Lyons has been outspoken in his opposition to the tax increases Patrick advocates. Patrick, he said, is “out of touch with communities” and wants to keep money in the “state bureaucracy” while he and other GOP legislators want to provide more dollars for cities and towns.

Lyons supports legislation that would guarantee each community state aid equal to 17.5 percent of its “foundation” school budget – the amount determined by the state Department of Elementary and Secondary Education to be what’s needed to provide adequate learning.

Smedile and fellow Selectman Tracy Watson lamented the loss of income tax deductions. Watson noted many taxpayers look forward to receiving a refund check in the spring so they can catch up on bills or make home improvements.

Smedile and other town officials have called for modification of the state prevailing wage law, which requires cities and towns to pay union rates for construction projects. Tarr noted there are several bills before the Legislature that would do just that, including one that would exempt projects of less than $500,000 from prevailing wages.

Finance Committee Chairman Alan LeBovidge asked about the “prognosis” of such legislation being passed.

“I think you’re going to see some movement on this,” Tarr said. He pointed out that a few years ago, no one would have expected the Legislature to allow cities and towns to enroll their employees in the Group Insurance Commission health care plan.

Yet it finally happened. Selectmen Chairman William Gordon, who directed yesterday’s session at Town Hall, noted North Andover employees recently joined the Group Insurance Commission and saved the town thousands of dollars.

Town Manager Andrew Maylor called for a “more creative approach to retirement reform.” Maylor has warned for quite some time that towns and cities are going to have to deal with the liability of “other post-employment benefits,” also known as OPEB.

Sooner or later, according to Maylor and other officials, communities will be required to carry “other post-employment benefits,” including health insurance for retirees, on their balance sheets. This in turn could make it more difficult for towns and cities to borrow money.

“We are a long way from dealing effectively with OPEB,” Tarr said.

Meanwhile, House Speaker Robert DeLeo said he is exploring “any and all alternatives” to the governor’s plan to boost the income tax to 6.25 percent from 5.25 percent.

“I told the governor that I would keep an open mind but I will tell you that the income tax tends to cause a bit of concern shall we say amongst the electorate,” DeLeo said during an interview that aired Sunday morning on WCVB’s “On the Record” program.

DeLeo said he knew that Patrick was thinking about an income tax hike but said he was surprised that the governor sought to raise that tax a full point, saying he thought Patrick would propose raising it to 5.5 percent or 5.75 percent. While committing to advancing transportation financing legislation, DeLeo identified only two funding priorities that he said must be dealt with - a $140 million budget gap facing the MBTA and the state’s practice of using borrowing to pay $250 million in annual transportation employee salaries.

Noting that MBTA officials last week said they’d squeeze $15 million in new savings out of their budget, DeLeo also said, “We have to do more of that.”

Material from the State House News Service was used in this report.