Municipalities Face ‘Perfect Storm’ of Fiscal Pressures

Massachusetts cities and towns are grappling with what municipal leaders are calling a “perfect storm” of fiscal pressures. Rising costs for health care, energy, construction, and schools, combined with sluggish growth in state aid and restrictions on local revenue, are straining municipal budgets. According to a new Massachusetts Municipal Association report, local spending has grown just 0.6% annually since 2010—far below the state budget growth of 2.8%—highlighting the impact of Proposition 2½, which caps property tax increases.

Photo by: Henry Epp/NEPR

Most municipalities are already near their levy limits, making tax overrides an impractical solution, particularly for rural towns and gateway cities with limited wealth. Amherst Town Manager Paul Bockelman emphasized the challenge, saying, “We clearly need to have serious conversations about how we can adequately support municipal services.” While state aid remains a critical lifeline, it lags behind other states.