NORTHAMPTON — As local officials scramble to fund next year’s budgets, many are praising a new report illuminating the financial strains unfunded state mandates inflict on cities and towns with ideas to help them.
State Auditor Suzanne Bump on Wednesday released a 49-page review that examined 1,560 laws created over the past five years and identified 97 provisions that have a “significant fiscal impact” on cities and towns, most notably in areas of education, employment benefits, public safety and elections.
In addition, the review by the state agency’s Division of Local Mandates found that from 2003 to 2015, cities and towns have had to fund a greater percentage of their operations through local taxes and receipts amid a corresponding decrease in state aid.
The trend has been felt in Hampshire County communities for years, including Northampton where taxes and local receipts have been relied on increasingly to balance the budget during that span.
“When you pass a law, it does have costs,” Northampton Mayor David Narkewicz said. “The unfunded mandate is a concern.”
Bump has recommended two statutory changes designed to provide greater transparency into the fiscal impacts that decisions by policymakers have on cities and towns.
One would require state agencies to file municipal impact reports when creating, amending or repealing new regulations to ensure they take into account the impact their actions have on local governments.
The second would grant the Division of Local Mandates authority to research and develop reports on the financial impacts proposed legislation has on municipalities — reports that would be shared with lawmakers, legislative committees and staff.
In a statement last week, Bump said the policy recommendations would allow the division to serve as a more effective resource for lawmakers by providing them with more information that agencies should take into consideration when crafting regulations.
“I’m very pleased to hear the state auditor is taking a very serious look at unfunded mandates,” said Hadley Town Administrator David G. Nixon. “There are so many that it’s almost hard to talk about them. The taxpayers have to pick up the burden.”
In Hadley, approximately 70 percent of the town’s budget is funded through the local tax levy while about 13 percent comes from state aid. By contrast, the auditor’s report finds statewide that tax levies accounted for about 51 percent of total municipal revenues and state aid 27 percent in fiscal year 2015.
Nixon said Hadley has felt the financial impact as new programs and reporting requirements get handed down by the state, from administering trench permits and complying with voting booth requirements to funding actuarial reports for post-employment benefits and a raft of educational programs.
“Any school system is going to be loaded with unfunded mandates,” he said.
Among the education-related laws that have put added financial pressures on cities and towns are requirements for public schools to compile and maintain data for evaluation systems, to train evaluators and school teams and to submit plans for training.
Others in the past five years include complying with new nutrition standards and requiring all school districts to fingerprint and obtain criminal background checks on current or prospective employees, volunteers and subcontractors who may have unmonitored access to children.
“There’s not funding from the state to pay for it,” Narkewicz said of the fingerprinting program that not only triggers collective bargaining issues, but requires the city to hire an outside vendor to do the work.
State Rep. Stephen Kulik, D-Worthington, said many laws are created to have uniformity across the state and that many of the educational requirements, such as fingerprinting and creating bullying prevention plans, for example, are just good practice and things school districts should be doing.
Kulik acknowledged that a lot of regulations are promulgated in the commonwealth without always taking a look at the financial toll and that the auditor’s policy recommendations sound sensible, particularly the idea of having an independent arm like the Division of Local Mandates to examine the financial impacts of proposed laws. He compared such reviews to the work of the federal Congressional Budget Office.
“If there was a capacity to put a dollar figure on it, I think that would be good,” Kulik said. “We don’t have that capacity in the Legislature to do what the Congressional Budget Office does. It’s an interesting idea that seems to make sense to me. It would be helpful to have a service like that.”
Some laws and regulations highlighted in the auditor’s report are very specific in nature, such as requiring municipalities to pay for damages to livestock or fowl by stray dogs, for dam inspections and the costs of reclassifying municipally owned dams, for example.
“I think many of these policies are created with positive intentions, but I do think for every public policy, there is a cost benefit that also goes along with that,” Narkewicz said. “It’s less clear to me that there’s been much time devoted to the costs of these policies. It’s a bit of a blind spot and I think it’s something that needs to be addressed.”