State budget impact on Somerville

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By Elizabeth Sheeran

State lawmakers lauded passage last week of a $32.5 billion fiscal year 2013 budget that increases state aid to cities and towns from $5.1 to $5.4 billion, with nearly $900 million in unrestricted local aid. But city officials said anyone thinking that means Somerville will have more state money to work with this year will be disappointed.

According to the so-called “cherry sheets” – the detailed spreadsheets that spell out state aid for every municipality in the commonwealth – the state has committed $42.4 million in local aid payments to Somerville for the fiscal year that began a few days ago on July 1, compared with $40.9 million in last year’s budget. That looks like an increase of $1.5 million, or almost four percent.

But the fiscal year 2012 cherry sheets didn’t include $1.5 million in supplemental funding the state released to the city after the budget process closed last summer. In fact, Somerville received a total of $42.4 million in state local aid during fiscal year 2012, and the city is slated to get $42.4 million again in this year’s budget, of which about half is unrestricted “direct” local aid and the rest is mostly educational funding.

“We’re grateful to the Governor and to our state delegation for working to sustain state aid to cities and towns. But when all is said and done, the fiscal year ‘13 local aid and education package for Somerville represents a zero percent increase over last year,” said Mayor Joseph Curtatone, who last month presented a city budget that had already assumed no increase in funding from the state.

It could be a lot worse. This year’s level-funded number might even be seen as a positive turn, given that local aid has been dropping for years, since reaching a high point in 2002. City Finance Director Edward Bean said for every dollar Somerville received in net transfers from the state a decade ago, the city today gets only 57 cents. No matter that the costs and challenges of running a growing, diverse, densely populated city like Somerville have risen exponentially over that same period.

Ten years ago, state aid funded 40 percent of the city’s budget. Today, local aid accounts for only 25 percent of city revenues, and that difference has to be made up with property taxes, fees and fines and other local taxes. But mostly property taxes, which now fund close to 60 percent of the city budget.

The mayor said Somerville has sustained and even added services by managing costs and promoting development. “These are challenging fiscal times at every level of government, and we know we’re never going to see a return to the levels of aid promised by the state when it implemented Proposition 2 ½. We’ve been both cautious and prudent in our spending and aggressive about growing our local tax base, so we’ve been able to manage even with declining or flat levels of state aid,” said Mayor Curtatone.

In some ways, Somerville’s success has been a double-edged sword when it comes to local aid, since cherry sheet allocations are based on complicated formulas that take into account demographics, property values and incomes, so the city’s increased affluence means it’s starting to get a smaller slice of the state local aid pie. And Somerville is also seeing a rise in assessments, the money it has to pay back to the state for things like vocational and charter schools. The city’s MBTA assessment was up nearly $200,000 in the new budget, for instance.

But State Representative Denise Provost, who voted for the 2013 budget along with the rest of the Somerville delegation on Beacon Hill, said its impact here goes beyond what shows up on the cherry sheets. Budget items that will benefit Somerville include an increase in the “circuit-breaker” funds available to give communities relief for special education costs, and $11 million statewide to fund transportation for homeless students while they are sheltered outside their school district. The latter is a federal mandate that cost Somerville over $100,000 last year.

And Provost said state money flows into Somerville in many other ways throughout the year. “There is a lot of money in the state budget that goes directly to people in Somerville without ever passing through the city finances,” said Provost.

She said this year’s state budget put money into a long list of programs that serve Somerville residents, including housing, mental health and other social services, Department of Conservation and Recreation facilities like the Mystic riverfront, transportation infrastructure like the new Orange Line station at Assembly Square, the Massachusetts Cultural Council, which funds a range of local programs and artists, and numerous other grants.

“These aren’t necessarily things that you hear about,” said Provost, “but money is money.”

The fiscal year 2013 state budget was sent on June 28 to Governor Deval Patrick, who has 10 days to sign it or amend it.