Mass. Senate proposes ‘historic’ increase in local aid. Is it enough?

Cities and towns across the South Coast are counting pennies as they craft their fiscal 2027 budgets. New Bedford Mayor Jon Mitchell has proposed shuttering Fire Station 9. Fairhaven elected officials are asking the Town Meeting to raise property taxes. Dartmouth Town Administrator Cody Haddad warns of potential service cuts a year from now. 

Local officials across the region point to the same challenge — they say the state is not providing enough local aid.

The Senate recently proposed a $53 million increase — or roughly 3% — in unrestricted local aid. But while senators celebrate this “historic” amount, towns and cities are struggling to make ends meet. 

Greater New Bedford area faces budget challenges

New Bedford is facing a projected $32 million deficit, according to Mitchell, who plans to address it with higher taxes, layoffs and service cuts, many of which City Council members object to. 

Mitchell proposed closing Fire Station 9, leading firefighters to protest. Last week, Sen. Mark Montigny, D-New Bedford, secured $500,000 in the Senate budget to keep the station open temporarily, though the budget still has to go to a conference committee with the House. 

Mitchell told The Light that the city has become “much more efficient,” including saving millions on energy costs because of its solar-energy program. But with insufficient state aid, he said these efficiency measures can’t make up the difference. He described the Senate’s proposed increase as a “drop in the bucket.” 

Fairhaven Town Administrator Keith Hickey said balancing municipal budgets has become increasingly challenging, partly because of inflation, but also because of “unfunded mandates from the state.” 

“I think [the state] would acknowledge that the revenues they provide to communities is not what was anticipated when some of these formulas and funding resources were first established,” Hickey said.

Fairhaven is facing a $649,000 budget deficit in its 2027 fiscal year, which begins July 1. Town officials plan to seek a Prop 2½ override — a permanent increase in property taxes — from the Town Meeting to cover the shortfall. Hickey predicted that the town will do the same in fiscal 2028. 

The town has proposed eliminating the tourism department and a “handful” of full- and part-time positions. Hickey added that if the state doesn’t provide relief, Fairhaven may have to make cuts to public safety in fiscal 2028. 

Haddad, Dartmouth’s town administrator, said it’s “undeniable that the state has underfunded municipalities across the commonwealth.” He added that he was “excited” to see the Senate’s proposal, but said one increase won’t make up for years of underfunding, and he hopes the rate continues to grow.

Unlike New Bedford and Fairhaven, Dartmouth is not facing a budget gap in fiscal 2027. The budget — which still needs to be approved by the Town Meeting — is a 4.7% increase from fiscal 2026. Haddad said the town couldn’t fund all the requests, but that it would add 8½ positions to the School Department. Haddad credited this to the town’s “conservative” financial approach, not help from the state. 

But the lack of state aid will catch up with the town as soon as fiscal 2028, Haddad said. 

“We’re becoming more and more reliant on our residents,” Haddad said. “If we don’t see a significant change in aid, you’ll see either a Prop 2 1⁄2 override on the ballot in the next several years, or you’ll start to see service levels significantly decrease.”

Municipalities across the commonwealth are facing the same financial challenges, said Adam Chapdelaine, executive director of the Massachusetts Municipal Association. 

A report by the association shows that unrestricted local aid has not kept pace with inflation since the Great Recession. According to Mitchell, New Bedford would have received an additional $187 million — an average of roughly $12 million a year — in unrestricted aid since 2010 if unrestricted local aid had kept pace with inflation. 

According to a Fiscal Alliance Foundation study released last month, state aid is 24% of local revenue in Massachusetts, compared with a national average of 28%. If the state funded municipalities at the national-average rate, local aid would rise by $1.82 billion, the report says. 

Senate proposes more unrestricted aid than House 

Each year, Massachusetts cities and towns receive a “Cherry Sheet,” named for the cherry-colored paper on which the document was originally printed. The document breaks down total local aid for cities and towns. The majority of local aid is distributed in two categories — Chapter 70 for schools and unrestricted general government aid. 

Aside from property taxes, unrestricted general government aid (UGGA for short) is municipalities’ primary source of non-education funding. As the name suggests, there are no restrictions on how it can be used. 

The House budget, released in April, includes $1.33 billion in unrestricted aid, a $10 million increase over fiscal 2026. The Senate budget proposed increasing unrestricted aid by $53 million, for a total of $1.38 billion. 

The Senate proposed distributing the additional $53 million in unrestricted local aid on the basis of population, with no city or town receiving more than 4% of the total state funding. Senators say this is a step toward a more equitable formula, but advocacy group MassBudget warns the approach could disproportionately benefit wealthy communities. 

MassBudget’s director of research and policy analysis, Phineas Baxandall, said he’s “heartened” to see a larger increase from the Senate. But he said the population formula would make the unrestricted aid distribution less progressive. 

Today, cities and towns with lower incomes tend to receive more aid. According to a MassBudget report, 15 municipalities with above-average incomes still receive above-average UGGA, but none with very high per-capita incomes receive very high per capita UGGA. 

Baxandall warned that this would change under the Senate’s proposed formula, which doesn’t factor in need.

In fiscal 2025, Weston — one of the wealthiest towns in the state — received about $40 per person in unrestricted aid, according to The Light’s calculations. The same year, New Bedford received about $280 per person. 

Under the new formula, wealthy cities like Weston, which got the least aid per person, would do relatively much better than cities like New Bedford, which were favored in previous UGGA distributions. Weston would see a 20% increase in unrestricted aid, MassBudget has calculated, while New Bedford’s unrestricted aid would rise by only 2.8%. 

Other mid-sized Gateway Cities would also see modest increases. Fall River’s unrestricted aid would grow by 2.5% and Lawrence’s would increase by 2.9%. Meanwhile, Edgartown would receive 50.6% more unrestricted aid and Nantucket’s aid would rise by 117.1%. 

Baxandall added that outside of local aid, municipal governments are largely funded through property taxes — a “very inequitable system.” Wealthy towns like Weston have higher property values and can provide more services to their residents. This inequity makes local aid even more important, he said. 

“The gap between municipalities’ own fiscal capacity and its residents’ needs can be filled through that local aid,” he said. “That’s why the targeting of local aid is so important, and that’s why we were concerned to see a proposal that lacks that targeting.” 

Senate Ways and Means Chair Michael Rodrigues (D-Westport) did not respond to a request for comment about the proposed UGGA formula. 

In a press release, Montigny said the Senate’s proposed increase in state aid will help “offset the heavy burdens and tough choices local taxpayers are grappling with.”

Montigny’s press release notes that the net state aid provided by the Senate budget to New Bedford — including unrestricted aid and other funding — represents a 6.3% increase, while the current inflation rate is 3.8%. During the Senate budget debate, lawmakers adopted an amendment to establish a commission to further review the UGGA formula. 

New Bedford representatives open to increasing aid 

Each New Bedford lawmaker said they see the need for increased local aid. 

Rep. Christopher Markey, D-Dartmouth, said the House’s proposed amount “is satisfactory under the circumstances of the entire state budget” but that he’d support the Senate proposal if the state can afford to do it. Rep. Steven Ouellette, D-Westport, also said he’d support the increase. 

“I always want more for my communities,” Ouellette said. 

Rep. Christopher Hendricks, D-New Bedford, told The Light that cities and towns need more support, noting that a lot of New Bedford’s public infrastructure spending comes from unrestricted local aid. 

Rep. Antonio F.D. Cabral, D-New Bedford, previously said that he has submitted legislation every year since 2010 to “fix or create” a fair state aid formula. Rep. Mark Sylvia, D-Fairhaven, is co-sponsoring Cabral’s legislation this session. 

During the House budget debate, three amendments that would have increased the total by $168 million were rejected (1308, 1316 and 1325). All of New Bedford’s representatives voted against each amendment, including Ouellette, who co-sponsored one of the amendments he voted against. 

Ouellette told The Light he voted against the amendments because they were “argued out on the floor,” but did not offer further reasoning. The other representatives said that the amendments — all filed by Republicans — were not realistic or fiscally responsible. 

Several representatives pointed out that the minority party also filed an amendment to cut the sales tax by 1.5%, which would have resulted in at least $1 billion in budget cuts. 

“Voting in favor [of the amendments] would have been a symbolic gesture rather than a meaningful step forward for the communities I serve,” Rep. Mark Sylvia, D-Fairhaven, said. “Symbolic votes may make headlines, but they do not fix roads, they do not fund schools, and they do not support the families counting on us to get this right.”

Jamie Perkins is a graduate student in journalism covering state government for The Light as a summer intern. Email them at jperkins@newbedfordlight.org.