How Could the State Budget Cuts Affect Newton?

Gov. Deval Patrick on Tuesday announced plans to close a $540 million state budget deficit through a combination of cuts and transfers from the state's "rainy day" fund.

The proposed cuts, some of which require the approval of the legislature, would reduce the state's planned aid to Newton in the current fiscal year, fiscal 2013.

Starting with unrestricted local aid, Newton would see a cut if Patrick moves forward with a proposed 1 percent reduction in the state's unrestricted local aid, which "funds municipal services including police and fire protection, parks, and public works," according to the state budget center. This cut would require approval by the legislature.

In Newton, the $313 million fiscal 2013 budget includes about $4.9 million in unrestricted local aid, according to Chief Financial Officer Maureen Lemieux. A 1 percent cut to the unrestricted local aid would equal about $49,000, an amount Lemieux said she's not too worried about. 

"We do not think we will be severely impacted [by the proposed cuts]," Lemieux told Newton Patch this week. 

State Senator Cindy Creem (D-Newton) told Patch this week she is not in favor of giving the Governor the power to cut local aid. Instead of bringing "unexpected cuts" to cities and towns, she hopes the state can look toward the rainy day fund to fill in the gaps.

Creem said she is not one who typically jumps at using the rainy day fund, but notes that Massachusetts has the third-largest reserve fund in the U.S.

Specifically in Newton, Creem said she is concerned about the cuts' potential impact on the administration's override plan that was put together with certain budget numbers in mind.

"Now is not the time to cut," Creem said. 

Patrick's current budget gap plan includes $200 million from the Rainy Day Fund, bringing the total draw to $550 million in FY13 – leaving a balance of $1.2 billion. 

In addition to the local aid, Patrick's proposal cuts $11.5 million from the state's Special Education Circuit Breaker reimbursement program, a move that the governor can enact without the legislature's approval. 

Nevertheless, Lemieux said Thursday that the city is expecting the Circuit Breaker and Chapter 70 education funding to remain intact.

As of Wednesday, State Rep. Kay Khan (D-Newton) told Newton Patch that while school funding and local aid is not an ideal area to cut, nothing is ruled out quite yet. 

"Everything is in the mix at the moment," Khan said, who also expressed concern about potential cuts to health and human service programs.

The state is also still waiting on whether the lottery profits will increase, Khan noted. The governor has filed legislation that ensures if lottery profits exceed the $1.026 billion amount currently budgeted in FY13, all of such excess proceeds be committed to increasing the amount of unrestricted local aid.

One area where the city could feel some financial effects is through the assessments it pays to the Massachusetts Water Resources Authority (MWRA), Lemieux said.

If the MWRA is affected by the governor's cuts, the authority could increase assessments it collects from cities and towns, including Newton. This year, Newton paid $9.7 million in water assessments and more than $20 million in sewer assessments.

Lemieux is confident, though, that the city would be able to handle any increased assessments through its water and sewer reserve accounts.