We are not alone…

The Massachusetts Municipal Association (MMA) has a new report detailing the financial strain on cities and towns across Massachusetts. Seeing recent override votes in places like Stoneham, Milton, Natick, and Brookline, the conclusions make sense. Importantly, it reinforces that Melrose’s challenges aren’t about waste or mismanagement—this is a statewide issue. Full report: here.

Some Key Takeaways:

• Costs up, revenues constrained. Municipal budgets are squeezed by inflation and state‐imposed limits on local revenue (no local income tax, very limited sales taxes, and Prop 2½’s 2.5% cap).

• Local spending growth has been austere. Real municipal operating spending in MA rose just 0.6%/yr (2010–2022) — well below both U.S. local governments and the MA state budget.

• MA relies less on state aid than most states. On average, 26% of local revenue in MA comes from state aid vs ~31% nationally.

• Two near-term pressures: (1) the 2.5% cap doesn’t adjust for inflation; (2) pandemic-era federal aid has ended.

• Flexible State aid (UGGA) has eroded. Inflation-adjusted UGGA is down ~25% since 2002 across all community types, and it’s one of the few truly flexible revenue streams.

• Education aid increases are uneven. Recent gains concentrate in urban and gateway cities; rural towns have seen flat or declining education support, even on a per-student basis.

• Overrides are a limited, costly tool. They’re slow, one-off, and used mainly by suburbs; many municipalities have pursued zero overrides in the past 15 years.

• Bottom line (report’s own summary): (1) MA state aid is less generous than U.S. average; (2) UGGA is down for all; (3) Prop 2½ makes overrides the go-to for suburbs; (4) rural/gateway communities lack capacity to respond; (5) rising education aid hasn’t helped rural/suburban towns equally.

  It doesn’t provide any solution or recommendations, but according to the MMA website, later this Fall they plan to release a set of policy recommendations to put cities and towns back on the path toward long-term financial sustainability.