Tony Cabral Calls for New Local Aid Formula


TONY CABRAL MAKES CASE FOR NEW ADDITIONAL ASSISTANCE LOCAL AID FORMULA AT FEDERAL RESERVE BANK OF BOSTON FORUM ON SMALL CITIES

Decades old relic needs to be changed to reflect local government needs

Worcester, MA – State Representative Antonio F.D. Tony Cabral, a candidate for Mayor of New Bedford, made the case today that a new formula is needed for distributing so-called additional assistance local aid funds to cities and towns.  Cabral spoke in front of hundreds of public and private sectors leaders from around the state as part of conference entitled “Collaboration and Leadership in Smaller Industrial Cities,” hosted at Clark University in Worcester by the Federal Reserve Bank of Boston.

“This issue is a passion of mine,” Cabral told the crowd.  “I have been working for years at the State House to reform the formula by which we distribute additional assistance, because the current process doesn’t make any sense.”
Currently, unrestricted general government aid is awarded in Section 2 of the budget according to a formula that combines Lottery Aid and additional assistance.  There is no clear formula for distributing the additional assistance amounts, which have remained fixed since a budget debate in 1991.

Cabral noted that the current process is a relic of a decades-old political compromise.  “There was a compromise reached during a difficult budget year in 1991 that froze the amount of additional state assistance at $378 million, and froze the amount that individual communities receive,” Cabral said.  “Each year, Cambridge receives $18 million, and Chelmsford receives $2.5 million, while a city like New Bedford, which has a much greater need, receives just $715,000.   There is no correlation between a city’s need and its ability to generate revenue locally.”

Cabral, who co-founded and currently co-chairs the Gateway Cities Caucus in the legislature, filed legislation earlier this year (H.B. 3102) that would reform the distribution of additional assistance. The bill has received strong bipartisan support, and relies on a formula developed by the New England Public Policy Center at the Federal Reserve Bank of Boston.

The Bank’s economists analyzed regularly reported data to determine each municipality’s “municipal gap” – the difference between each community’s ability to raise revenue and its fixed costs.  It would distribute any new municipal assistance provided in future state budgets in a way that would begin to adjust current imbalances between communities to better reflect the fiscal needs of each community. The Bank’s research was presented at today’s conference prior to Cabral’s panel discussion.

“Since 1991, additional assistance has been allocated in the same undefined, unequal, and unfair way,” Cabral said. “The cities with the greatest need get the least. The cities with smallest need get the most. This bill would ensure that we help all Massachusetts communities in proportion to their need.”

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