January 11, 2011
Payment in Lieu of Taxes (PILOT)
The OSA called for improvements in the way the state compensates municipalities that have tax-exempt state property after finding that 285 cities and towns lost out on $56.7 million in reimbursement payments over a six year period. The problem occurred when the state's payments-in-lieu-of-taxes (PILOT) program was underfunded during the period in question.
Financial Impact of Property Tax Exemptions for Senior Citizens in Massachusetts
This report presents an evaluation of the financial impact of property tax exemptions on senior citizens and on the cities and towns of Massachusetts.
Through this study, DLM found that state reimbursement to communities for this important tax break for income-eligible elderly homeowners had been capped at $500 per exemption for 20 years. As a result, 26 municipalities determined that they needed to provide a voluntary, unreimbursed exemption to supplement the $500 reimbursable exemption authorized by state law. Also, 117 municipalities provided almost 2,400 exemptions without any reimbursement because the state's reimbursement responsibility is capped by statute. The combined impact on cities and towns was $2.2 million.
The report recommended that the Legislature increase the amount of the property tax exemption for elders to account for inflation, and that state reimbursement to municipalities be increased accordingly, as required by the Local Mandate Law. DLM also recommended an increase in the out-of-date financial eligibility criteria for elderly exemptions, and repeal of the provision capping the number of exemptions subject to state reimbursement.
This report includes an overview of the legislative history of the property tax exemptions for senior citizens as provided by Chapter 59, section 5, clause 41 and its local option successors, clauses 41B, and 41C. It also provides an analysis showing the impact of inflation on this exemption and its eligibility thresholds. Finally, there are appendices that provide for statistical review and comparison of exemptions granted in each city and town, and a review of the financial impact of unreimbursed exemptions on cities and towns.
Clean Environment Fund
The Clean Environment Fund (CEF) was established by the General Court to hold abandoned bottle bill deposits for the support of recycling, composting, solid waste reduction, and bottle bill related programs. Of nearly $100 million in CEF revenue collected from FY 1990 to FY 1998, less than $30 million was expended on these solid waste management programs.
This OSA report found that CEF spending had increased since FY 1996, with almost all of this increase dedicated to recycling programs. However, environmental agency spending not directly related to recycling and solid waste represented 65% of $19.5 million in CEF spending in FY 1998, while recycling projects were limited to 35%. The municipal grants component of CEF spending was $3.5 million in FY 1998, just 18% of FY 1998 CEF expenditures.
In prior reports, DLM recommended an increase in CEF appropriations for recycling programs. In a 1996 report, "The Clean Environment Fund and its Impact on State and Local Government", DLM recommended that the Executive Office of Environmental Affairs prepare a plan to begin to replace the CEF contribution to DEP's hazardous waste site program with increased contributions from other funds. Further, we recommended that the CEF contribution to the hazardous waste office ($7.9 million in FY 1996) be reallocated to the municipal recycling and solid waste grant program. Full implementation of this recommendation would return abandoned deposit spending to the purposes originally intended by the legislation that created the Clean Environment Fund, provide needed assistance to cities and towns, and help the state reach its recycling goals.
Massachusetts Education Reform
This two-part report disclosed that the state could not ensure that $1.5 billion in new state education aid was resulting in better student performance within the public school systems K-12 grade levels.
However, the report also indicated that the state was making progress toward achieving the goal of providing every school system with sufficient funding by the year 2000. The state share of school spending had risen from 30 percent during the year before reform to 39 percent, and was expected to reach 43 percent by 2000, significantly closer to the national average of 48 percent.
The report showed that the disparity in per-pupil spending between relatively wealthy and relatively poor districts was decreasing. Of 183 school districts that started with less than adequate spending, 163 districts had either reached or were making progress toward their spending targets under the reform law.
Financial Effect of Recycling on Cities and Towns
The purpose of this report was to determine the financial impact of legislative proposals that would require cities, towns, and solid waste districts to operate recycling and composting programs. This study examined the methods and costs of existing municipal waste management services and projected the cost of tailoring existing practices to comply with state-mandated recycling and composting requirements.
Closure of Unlined Landfills
This report disclosed that there were 90 unlined municipal landfills to be closed, at an estimated cost of $169,500,000. In addition, alternative disposal costs for the 90 communities would approximate $27 million per year.