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Senator Spilka Votes for Municipal Relief and Pension Reform Package, Champions Education Amendments

May 13, 2010

The Senate on Thursday unanimously passed a municipal relief bill that gives cities and towns new tools and local options to plan budgets, pool resources and save money, Senator Karen Spilka (D-Ashland) announced today. The legislation also includes new pension reform provisions that will generate millions of dollars in savings for local and state retirement systems.

“This legislation provides our cities and towns with tools to operate more efficiently and effectively during tough financial times, while continuing the Senate’s ongoing commitment to reforming pensions in order to save taxpayers money,” stated Senator Spilka.  “I’m proud that two of my amendments particularly aimed at helping our schools were included in the final bill.”

Senator Spilka successfully advocated for inclusion of an amendment that would direct the Department of Revenue and the Executive Office of Education to convene a task force to study and identify alternative, dependable sources for funding local and state aid to public schools other than the property tax.

“The current economic climate has placed more of a burden on municipalities to meet the education needs of their students.  Without identifying alternative sources, the property tax will continue to rise to meet the needs of educating our children, and we’ll continue to see the effects of across the board budget cuts, especially in the elimination of sports and the arts, decreased transportation and increased classroom size,” stated Senator Spilka.  “A study of this kind prepares us for the future – it identifies ways to provide our children with the best education while minimizing the burden on the citizens of the Commonwealth.”

Another amendment which Senator Spilka co-sponsored would relieve the administrative burden on schools by reviewing and consolidating reporting requirements currently imposed on public schools under state and federal law.

“A review of these requirements, along with consolidation and some elimination, will provide more time for administrators to focus directly on the students,” stated Senator Spilka.  It will also provide a more streamline and efficient system, eliminate unnecessary duplication and expense, and maintains transparency in our public schools.”

Senator Spilka also successfully advocated for an amendment that expands the ability of communities to use Community Preservation Funds (CPA).  These funds would now be available to be used by cities and towns to pay for capital improvements that increase energy efficiency, allow for the use of renewable energy or generate renewable energy, as well as for the replacement of playground equipment and other improvements that make areas more functional for recreational use.

The bill also gives municipalities the option to use electronic billing, if approved by a board of selectmen or mayor, and establish temporary tax amnesty programs that would expire June 30, 2011.  The idea of electronic billing for municipalities was originally proposed as a separate bill by Senator Spilka and incorporated into the larger Senate bill.

The pension reform provisions are a unique aspect of the Senate municipal relief bill and will apply to all current and new employees to the extent it is constitutionally permissible.

The key provisions include:

  • A cap on pension earnings, restricting them to a percentage of the federal limit and eliminating grossly inflated pension pay-outs;
  • Elimination, for all new employees, of the so-called “Section 10” termination allowance, which was removed for elected officials in last year’s pension reform legislation;
  • An anti-salary-spiking rule that would limit the allowable annual increase in pensionable earnings to no more than 7 percent plus inflation, but would not apply to legitimate and permanent job changes or promotions;
  • Adjusting benefits based on employment history by pro-rating retirement allowance for employees who have served in more than one service Group, eliminating an individual’s ability to jump to a higher Group just to receive a greater retirement benefit;
  • A buy-back rule, consistent with all other state employees, that would require retired public officials elected to a new office to repay received benefits plus interest in order to rejoin the system; and
  • A requirement for Supreme Court Justices, the only state employees who do not pay into the pension system, to contribute to their retirement benefits.

In addition to pension reforms, the bill also establishes cost-saving efficiency measures specifically for local governments and gives municipalities the ability to enter into shared-service agreements free from collective bargaining requirements.

Several regionalization measures in the bill would allow cities and towns to establish mutual aid agreements between fire, police, EMS, public works and other local services; and allow school districts to share superintendents and enter into collaborative bulk-purchasing agreements.

Other initiatives benefiting schools include:

  • Flexibility in municipal and regional school districts to finance projects over a term matching the asset’s useful life, not to exceed 30 years, spreading out cost over a longer term to reduce annual expenses (this provision applies to municipalities in general as well);
  • Streamlining procedures for regional school districts to access their stabilization funds, allowing them to draw funds by a two-thirds vote of all members of the district; and
  • Setting Special Education tuition rates by October 1 of each fiscal year, prior to the first of the year, making it easier for schools to plan their upcoming annual budget.

“This bill removes unnecessary requirements that stand in the way of regionalization and other options that can help save money, giving municipalities added authority and independence to make decisions and structure local programs,” Senate President Therese Murray (D-Plymouth) said. “It also builds off of landmark pension reform legislation we passed last year, closing more loopholes in existing law and ensuring a more equitable retirement benefit system for all public employees.”

Additional money-saving local options in the bill establish an early retirement program for municipal employees with at least 20 years of service. The benefit would be capped at 80 percent of the employee’s salary. Municipalities would be limited to the number of salaries they could replace.

A series of sound business practices in the legislation improves and streamlines the local bidding and procurement process, and allows municipalities to enter into cost-saving cooperative purchasing agreements.

Finally, the bill also increases the authorized term of municipal leases from 10 to 30 years, and it eliminates the need for legislative approval to rectify irregularities in town elections or town meetings if the secretary of state finds that procedural standards were met.

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