Revenue Increases

Governor Patrick has filed legislation that would 1) increase the state meals and lodging taxes by 1% to offset some of the proposed reduction of municipal aid, 2) permit towns to levy an additional 1% local meals and lodging tax, and 3) allow certain telecommunications equipment to be subject to property tax. The legislature has yet to respond to these revenue recommendations, but it is anticipated that up to $1.67 million could flow to the town of Amherst from these sources, if enacted.

 

The Federal stimulus plan is taking shape as the American Recovery and Reinvestment Act. One section would provide an increase in two grants that come directly to the schools: the Title I grant is aimed at helping disadvantaged students reach high academic standards, and the IDEA grant is to support mandatory special education costs so that other areas of education do not have to be cut. Another section of the Act provides funding that will go directly to states to be used to support education and to help reduce the need for cutbacks, layoffs, and other purposes. The State has yet to announce how it will distribute any federal funds it receives.

 

Other possible sources of additional budget support include the town’s use of reserves (free cash and stabilization funds), a Proposition 2 ½ override, and the renegotiation of salary contracts. None of these options are popular, but some or all may need to be considered if other sources of funding fail to materialize.