David Pottier,
Chief Financial Officer
Today, at the Massachusetts Municipal Association (MMA)’s Annual Meeting, Governor Maura Healey and Lieutenant Governor Kim Driscoll announced that they will be filing a significant package of municipal reforms to help cities and towns generate the resources they need to maintain and deliver vital services, streamline operations and attract talented workers to local government.
The Municipal Empowerment Act will expand on tools available to municipal leaders to generate revenue by allowing them to increase local option taxes on meals and lodging. The bill would also create a new local Motor Vehicle Excise surcharge option – a provision that could benefit every city and town in the state. The bill would also make permanent a number of popular COVID-era allowances for hybrid public meetings, outdoor dining permits and to-go cocktail sales.
“Massachusetts is home to 351 cities and towns that are the bedrock of our state. From day one, our administration has been committed to giving them the support and resources they need to build strong communities and grow their economies,” said Governor Healey. “The Municipal Empowerment Act proposes multiple reforms that municipal leaders have asked for to improve the services they can provide to their communities and make operations more efficient. We are also proud to be increasing funding for roads, bridges, schools, and municipal services to improve quality of life in all of our communities.”
“I’ve spent the past year traveling the state and meeting with municipal leaders to hear directly from them about how the state can best support their needs. What we heard loud and clear was a desire for partnership to improve municipal finances and operations,” said** Lieutenant Governor Driscoll**. “The Municipal Empowerment Act is a direct result of these conversations. This package reduces red tape that municipal leaders far too often encounter and gives them more options to utilize tools that will make their communities stronger.”
The bill is a product of the municipal listening tour led last year by Lieutenant Governor Driscoll and other members of the administration. They heard from over 130 managers and administrators from 112 different municipalities and solicited input from professional associations representing local leaders and employees – receiving feedback from more than 20 such groups. What emerged from these sessions were concrete suggestions for how the state can better partner with our cities and towns – from solutions to acute workforce challenges, to relief from specific administrative burdens, to new tools to make local management more efficient and effective.
Governor Healey also detailed some of the Local Aid support cities and towns can expect to see when she files her annual budget proposal for Fiscal Year 2025 next week. The administration’s Fiscal Year 2025 budget will recommend increasing Unrestricted General Government Aid by 3 percent to $1.31 billion. Consistent with Governor Healey’s State of the Commonwealth address on Wednesday night, the budget will also propose to fully fund the fourth year of the Student Opportunity Act, boosting Chapter 70 aid to local public schools to $6.86 billion, a $263 million or 4 percent increase over Fiscal Year 2024. Overall, Local Aid in the budget will total $8.7 billion, a 3 percent increase over the current fiscal year.
“The budget we will file next week will reflect this administration’s commitment to Local Aid and desire to keep our partnership with cities and towns at the forefront of so much we hope to accomplish,” said Secretary of Administration and Finance Matthew J. Gorzkowicz. “The funding we have identified for unrestricted aid and Chapter 70 for schools will complement the reforms proposed today in the Municipal Empowerment Act to make sure our communities remain vibrant, attractive places to live and work.”
The administration also plans to file a two-year, $400 million Chapter 90 bill alongside the Municipal Empowerment Act, proposing a multi-year authorization to help build in predictability for municipalities looking to plan longer-term projects. The annual Chapter 90 authorization would be supplemented by another $100 million for local road and bridge repairs through Fair Share surtax spending proposed in the Fiscal Year 2025 budget, and an additional $24 million dedicated to rural communities. Additionally, Lt. Governor Driscoll has directed MassDOT and the Executive Office for Administration and Finance to assemble a working group of state and local officials to review Chapter 90 administration and recommend ways to reduce the complexity and burdens of applying for and receiving these vital transportation funds.
“Whether you drive, bike, walk, or take public transit, transportation impacts every part of our lives. I want to thank Governor Healey, Lieutenant Governor Driscoll, and the legislature for supporting Chapter 90 funding,” said Transportation Secretary Monica Tibbits-Nutt. “This funding will help us to repair roads and bridges and make key capital improvements and investments across the state. I look forward to working with the Healey-Driscoll administration as we continue to deliver equitable, reliable, and resilient transportation options for all 351 of our cities and towns.”
The Municipal Empowerment Act is designed to arm local governments with greater tools and supports to chart their own course and make local management more efficient and effective.
Like state government, businesses and households across the state, municipalities have budgetary challenges that impact their ability to deliver services that residents depend on and expect. To empower communities to generate more local revenue, the bill includes several local options:
**Increasing the maximum local option lodging tax on hotel, motel and other rentals **from 6 percent to 7 percent of the price of a room (6.5 percent to 7.5 percent for Boston)
Increasing the maximum local option meals tax from .75 percent to 1 percent of the sales price of a meal at a restaurant or local store
Adding a new 5 percent local option Motor Vehicle Excise surcharge, a fee charged by every city and town on vehicles registered in their communities based on the vehicle’s value
Other highlights focused on fiscal and staffing stability include:
**Creating new property tax exemptions for seniors **to allow cities and towns to adopt a Senior Means Tested Property Tax Exemption for qualifying seniors and to increase existing senior property tax exemptions.
Addressing long-term benefit funding pressures by establishing a new OPEB Commission to take a fresh look at opportunities to address unfunded liabilities from non-pension employee benefits.
Allowing the creation of Regional Boards of Assessors to allow municipalities to create streamline duties and reduce significant staffing challenges.
**Creating additional flexibilities in post-retirement employment **by expanding the process for seeking exemptions to post-retirement employment rules.
The flexibility for municipalities that began during the COVID-19 public health emergency to permit outdoor dining and takeaway liquor sales, as well as hosting hybrid public meetings to encourage remote participation, would also be made permanent by this legislation.
Additional reforms proposed in the Municipal Empowerment Act include:
Clarifying that groups of cities and towns can award multiple contracts through an RFP process under Chapter 30B and purchase both supplies and services from collectively bid contracts;
Equalizing 30B thresholds for advertised procurements to $100 k for all municipal purchasing – not just schools;
Eliminating the requirement to publish notice of invitations for competitive bids on COMMBUYS;
Streamlining procurement for electric school buses and charging infrastructure by allowing single procurements for both under Chapter 30B.
**Enforcement of double pole removal **after 90 days by giving municipalities enforcement authority, with penalties for utilities that fail to comply.
Establishing central valuation of telecom and utility property through the Department of Revenue’s Division of Local Services (DLS) to relieve cities and towns of the cost of individually hiring experts and consultants.
Updating borrowing rules for school projects to increase from 30 years to 40 years the bond term to more closely reflects the life expectancy of the project.
The Governor intends to file the Municipal Empower Act and Ch. 90 bill on Monday. The full bill texts will be available at that time. More details on the provisions of the Municipal Empowerment Act can be found in the policy briefs on **Fiscal & Staffing Stability, Local Flexibility and Operational Efficiency, Rural Supports and FY25 Local Aid. **
**Statements of Support **
**Adam Chapdelaine, Executive Director & CEO, Massachusetts Municipal Association (MMA) **
“The MMA is deeply grateful to the Healey-Driscoll Administration for this robust proposal, which would benefit each and every one of our Commonwealth’s 351 cities and towns. The Municipal Empowerment Act includes strong recommendations based on input from local officials, with a focus on supporting our communities, modernizing practices, and improving efficiency in the delivery of essential services provided by our cities and towns.”
**Easthampton Mayor Nicole LaChapelle, incoming President of Massachusetts Mayors Association **
“Municipal government is entirely unique in that the work we do has a direct and immediate impact on the lives of our residents. We must be nimble and flexible, but most importantly, we must be efficient because municipal budgets are small and tight. The efforts here by the Healey-Driscoll Administration help us enhance and balance the needs of our residents and the changing financial landscape municipalities experience. I want to thank Governor Healey and Lieutenant Governor Driscoll for their commitment to supporting cities and towns in every corner of the Commonwealth.”
**Michael Ward, Director of the Edward J. Collins, Jr. Center for Public Management University of Massachusetts Boston **
“This bill contains many great improvements and fixes to help municipalities operate more efficiently and effectively. In particular, the improvements to procurement and financial processes will reduce burdens on managers and finance officials, freeing up significant time and energy to focus on other critical issues. We are also thrilled to be able to assist the Administration with its new workforce development initiatives, given the overwhelming recruitment and retention problems facing local governments across the Commonwealth.”
