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Working Paper
Designing formulas for distributing reductions in state aid
Local governments depend on state aid to provide residents and businesses with vital public services, such as education, police and fire protection, and safe public roads. However, in response to the recent fiscal crisis, many states are quickly and deeply cutting local aid. The Congressional Budget Office reported that 22 states reduced aid to local governments in FY 2010, and 20 states have proposed additional cuts in FY 2011. ; States tend to cut aid either on an ad hoc basis or across the board, with every community receiving the same percent aid cut. This paper proposes a new, more ...
Briefing
Reforming municipal aid in Massachusetts: the case for a gap-based formula
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 ...
Working Paper
Walking a tightrope: are U. S. state and local governments on a fiscally sustainable path?
This paper develops a new measure of state and local fiscal sustainability called the "trend gap," which is based on socioeconomic and other fundamental factors and removes the short-term influence of the business cycle. The paper estimates the trend gap and finds that the nationwide per capita trend gap has been on a growing path over the past three decades, a different conclusion than found in previous studies. Social insurance and income maintenance programs have played a major role in the growth of the trend gap, while pension and other post-employment benefits (OPEB) plans have become ...
Briefing
A more equitable approach to cutting state aid
Local governments in New England rely on state aid to finance the provision of essential public services. Yet in response to the recent and ongoing fiscal crisis, state governments across the region have cut local aid deeply, often by the same percentage in each community. This across-the-board approach ignores differences in underlying local fiscal health and places a larger burden on many resource-poor communities. To address this concern, this policy brief provides a new, more equitable approach that allocates smaller aid cuts to communities that are in worse underlying fiscal health and ...
Journal Article
An overview of New England's economic performance in 2010
In the first calendar year following the Great Recession, signs of an economic recovery began to take shape across New England. An improving labor market picture, growth in income, indications of a stabilizing housing market, and booming exports spurred economic growth in the region in 2010. As a result, New England?s overall performance surpassed that of the nation as a whole.