By Jim O'Sullivan
State House News Service
December 09, 2008 12:01 am BOSTON — Predicting a reduction in state aid to cities and towns of up to 10 percent next fiscal year, Massachusetts House Speaker Salvatore DiMasi said yesterday he would seek to help municipalities cut costs by removing an organized labor obstacle that prevents some municipalities from opting into the state-run health insurance program. Neither Gov. Deval Patrick nor Senate President Therese Murray foreclosed the prospect of local aid cuts up to 10 percent, with all three pointing to flagging revenues. Tax collections through the first five months of this fiscal year are running 1.2 percent off last year's pace, and state leaders are predicting a deepening downturn in the economy. DiMasi signaled willingness to go along with a version of Gov. Deval Patrick's bid to impose new property taxes on telecommunications equipment, and new receptivity to Patrick's hopes to allow cities and towns to add an extra penny to the meals tax. The suggestion that local aid could see a 10 percent cut, and that a smaller reduction could be made during the current fiscal year, will likely rattle municipal budget writers who rely on Beacon Hill aid to provide services. State leaders took pains in recent years to increase local aid, which last fiscal year totaled just over $5 billion, and this year is projected to top $5.3 billion. "There's going to have to be some cuts made across the board in fiscal 2010," DiMasi told a group of reporters assembled in his office. "Now, how much of a cut local aid will take is a matter of how much. It's not a matter of whether they will take a cut. Barring any super-bailout from the federal government, cities and towns, from all the information that we have, will take a cut. Whether that be five or 10 percent, I suggest it's going to be at least five and as much as 10 percent." The cuts could affect local education aid, DiMasi said, although he called the Chapter 70 account a priority.
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