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Patrick proposes $65M local aid cut in Mass.

Glen Johnson

Gov. Deval Patrick told Massachusetts city and town leaders Friday he will cut some of their local aid in the fiscal 2012 budget he proposes this week, but attempt to offset the reduction with legislation granting them long-sought power to trim municipal employee health insurance costs.

In his annual address to the Massachusetts Municipal Association, the governor said he will propose a $65 million cut in unrestricted local aid, reducing it to $834 million overall.

Simultaneously, he will propose increasing school aid by $140 million, to $4 billion overall. The roughly $20 billion budget will cover the period from July 1, 2011, through June 30, 2012.

Patrick also pledged to file legislation forcing cities and towns to join or adopt a program similar to the state’s Group Insurance Commission. It is free to adjust state employee premium payments and make other changes as it sees fit.

Municipal leaders have complained for years they have been blocked from shifting their employees into such a program – and gaining the savings latitude it would provide – by a requirement to get union approvals that is practically impossible for them to achieve.

The governor, who courted union support during his re-election campaign last fall, has resisted lowering that threshold – as high as 70 percent of union members in some communities — without union negotiation.

His new bill eliminates that union vote but requires union negotiation in a compressed timetable. If the bill were to pass, and a city and town were unable to negotiate a different health plan with its workers, they would be forced into the state program.

“Cities and towns negotiated their way into these situations, so we’re trying to help,” the governor later told reporters. “But as I said all along, labor is entitled to – and deserves – a meaningful role. They will have it, but not a veto.”

Another component of the bill would force municipalities to place eligible retirees into Medicare, which many have paid for but don’t use.

Patrick estimated estimates the changes will save about $120 million annually – offsetting the local aid cut.

“We are going to have to close about a $1 billion budget gap and just about every thing has been touched,” he said in defending the cut.

The governor received a standing ovation after his 10-minute remarks.

Senate President Therese Murray commended Patrick for working with lawmakers to help communities weather the economic downturn and give them the tools they need to grow stronger. She said the Legislature will give “careful thought” to his proposed local aid cuts.

Beverly Mayor William Scanlon, who also serves as MMA president, lauded the proposal.

“The process has required coalition bargaining, which is dominated by the teachers, in particular, and they haven’t been interested in changing it,” Scanlon said. “Why would you give up a benefit if you didn’t have to?”

Yet he is optimistic about momentum now because cities and towns are as cash-strapped as the state.

“Hopefully, they’ll finally see that it’s all about jobs, because right now the only way we have to meet the escalating costs is to lay union positions off, to take that money to save those who are left. And around and around it goes. Each time you take another bite off your tail,” said the mayor.

Associated Press