Roughly halfway through the fiscal year that started in July, tax collections are generally in line with projections of slow growth, Gov. Maura Healey’s budget maestro, Matt Gorzkowicz, told city and town officials gathered at the State House.
September’s numbers had been a little bit lower than anticipated; October’s had been a little bit higher, enough to justify the release of $125 million in earmarked spending that the administration initially held back.
“We’ll see this ebb and flow,” Gorzkowicz said. “We’re not going to panic if it’s a little below; we’re not going to get excited if it’s a little over.”
His even-keeled delivery won over Beverley Griffin Dunne, who has spent more than 20 years on Peabody’s School Committee.
“Every time you speak, my blood pressure goes down,” Dunne said.
Asterisks and caveats apply, as Gorzkowicz acknowledged “headwinds.” Others indicated some hypertension in the months ahead. Medford Mayor Breanna Lungo-Koehn said she was initially planning to note her 10% increase in health insurance costs, but as she went around the table before the meeting, she heard others have faced 39% and 36% hikes.
Her increase comes as she’ll be dealing with the cost of lead pipe removal, water and sewer infrastructure, and municipal building maintenance, funded by a multimillion dollar bond.
“My stress at night is funding the debt that’s going to come in 2027,” she said.
Brendan Sweeney, who was also at the table, brought a unique perspective: He’s a councilor in coastal Beverly, and an assistant town administrator in rural Boxford. Both municipalities are projecting deficits in fiscal year 2027, he said, while maintaining level services. In Beverly, the projected deficit is $4 million, while Boxford’s stands at several hundred thousand dollars.
He said the state should be providing more state aid. The Massachusetts Municipal Association noted in a recent report that what’s known as unrestricted general government aid to cities and towns is 25% lower than in 2002, adjusted for inflation.
The same report also took aim at Prop 2 1/2, the state law that caps how much local officials can raise through property taxes. The law creates a “revenue crunch,” according to the MMA.
The debate over Prop 2 1/2 aside — Sweeney called it the “only real tool we have statewide to keep property taxes in check” — cities and towns are overall pressing for more flexibility. Multiple local officials are supporting the Healey-Driscoll proposal, known as the Municipal Empowerment Act, to allow them to get more tax revenue out of meals and hotel stays.
Jill Hai, whose Lexington Select Board is facing a $4 million budget gap, said the Town raised $500,000 off the meals tax, and it could raise another $170,000 under the legislation.
The bill, which has been broken up and sent to several legislative committees, also includes an auto excise tax increase, which has drawn fire from Healey’s GOP opponents.
“While I personally, as a city councilor, probably wouldn’t vote for that increase in Beverly, I understand why there is a push to give municipal officials those options,” Sweeney said. “I think at the end of the day, local officials know their communities best.”
