Cities and towns across the Commonwealth are facing enormous fiscal pressures which will only worsen over the next two years and likely beyond. Confronted by structural deficits in good times, municipalities have had to deal with major cuts in local aid during two recessions this decade. There will be further cuts in state aid in fiscal 2011, made worse by the end of federal stimulus dollars which have been supporting Chapter 70 education aid.
The dramatically increasing costs of health insurance and the large jump in unfunded pension liabilities must be addressed through comprehensive reform. Controlling the growth of municipal health care costs, which have increased at five times the inflation rate since 2001, is the most important step cities and towns can take to weather the fiscal storm ahead.