Reforming municipal aid in Massachusetts: the case for a gap-based formula

Abstract: This policy brief evaluates the distribution of municipal aid in Massachusetts in FY 2011 and suggests an approach for reforming municipal aid without redistributing current aid. We use the ?municipal gap,? a measure that is outside the control of local officials, to determine a community?s need for municipal aid. To show the general pattern of municipal gaps across the state, we compare five prototype communities -- large cities, job-center suburbs, higher-income residential suburbs, rural towns, and resort towns. The analysis shows that the distribution of FY 2011 municipal aid does not closely relate to municipal gaps. A 10-year simulation from FY 2012 to FY 2021 shows that with only modest increases to the aid pool, a gap-based formula can significantly improve the distribution of municipal aid in just a few years. This brief summarizes and expands on analysis in NEPPC working paper 10-4: Does Springfield Receive Its Fair Share of Municipal Aid? Implications for Aid Formula Reform in Massachusetts.

Keywords: Municipal finance - Massachusetts;

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Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: New England Public Policy Center Policy Brief

Publication Date: 2010

Order Number: 10-2