Merrimack Valley cities are on life support, with financial collapse one or maybe two years away, the mayors of those communities say.
The mayors of Lawrence, Haverhill, Methuen, Amesbury and Newburyport say unless they start receiving more money from the state, their cities must resort to drastic changes like laying off workers, cutting services and making residents pay more in local taxes and fees.
All of the mayors say their cities face large budget shortfalls, and that the 50-year-old system used to pay for local government and public schools — mainly property taxes and state aid — no longer works.
Since 2001, Massachusetts communities have faced either diminished real estate growth or reduced state aid. For the first time, both are expected to affect communities at the same time during the new fiscal year that starts in July. The likely result, the mayors say, is worker layoffs, reduced services and increased taxes and fees for residents.
The mayors, who have been talking and meeting as a group for about a year, discussed their most pressing needs and problems, and pitched their ideas for solving them, at a recent Eagle-Tribune editorial board meeting.
"We tell our legislators we are dying, and they tell us they have their own problems, that we are on our own," said Amesbury Mayor Thatcher Kezer, a former lobbyist on behalf of cities and towns for the Massachusetts Municipal Association.
"That's fine," Kezer said, "but if they want us to solve our own fiscal problems, they need to give us the tools to do it."
The mayors want the Legislature to give them the ability to tax restaurant meals and hotel revenues, reduce escalating health care costs by making city workers pay more for their insurance, and give cities more state tax revenue.
First and foremost, the mayors want the power to join the massive state health insurance pool, which offers lower rates and less-expensive coverage plans. Although the state insurance pool is cheaper, communities cannot join without the approval of 70 percent of their labor unions, according to state law.
Haverhill Mayor James Fiorentini said the 70 percent threshold, called a poison pill by some, is impossible to achieve.
"I invited the 19 unions to a meeting to talk about it, and only one showed up," Fiorentini said. "The unions say they won't even talk about it until they get new contracts and pay raises."
The mayors said they aren't afraid to take on labor unions. In fact, they said, their popularity among the public soars when they do. The problem, they said, is state law gives too much power to the unions, specifically by allowing them to go to binding state arbitration when city leaders try to get tough or save money.
As an example, Lawrence Mayor Michael Sullivan described what happened when his city tried to generate an extra $400,000 in annual bank interest by paying its workers every two weeks instead of weekly.
"The unions found out and wanted the money," Sullivan said. "They filed a grievance and won. The city then went back to every-week paychecks."
Newburyport Mayor John Moak said getting a larger share of state tax money is the only way to truly fix local budget problems. The Valley mayors are backing such a plan being pushed by the Massachusetts Municipal Association.
That proposal would eventually devote 40 percent of all state tax revenue to municipal and school aid. The plan would bring a consistent amount of aid to communities, compared to aid from the state Lottery. As a result, the plan would reduce reliance on local property taxes, according to the Municipal Association.
"Property tax cannot sustain cities anymore, and it pits people who want good schools against people on fixed incomes," Methuen Mayor William Manzi said.
The mayors said towns have it a little easier because residents typically agree to pay more taxes in exchange for limiting new growth. Cities want and need growth to survive, the mayors said.
In addition to speaking with a unified voice on regional issues, the so-called Merrimack Valley Mayors Coalition is also working together to buy and share equipment and supplies like road salt.
Sullivan recently let Haverhill borrow its Fire Department ladder truck when Haverhill's truck broke down, for instance. Lawrence is sharing one of its ladder trucks with Methuen, while Methuen's truck is in Wisconsin being repaired.
Valley mayors: It's a question of survival
The problem — not enough money to run cities
The risk — worker layoffs, reduced services and increased taxes and fees for residents
The solution — Cities getting a larger share of tax money raised by the state
SOURCE: The mayors of Lawrence, Haverhill, Methuen, Amesbury and Newburyport, based on a plan being pushed by the Massachusetts Municipal Association
