State To Return $210M to Cities

Impounded Sum Will Be Rolled Into Massachusetts Deficit

BOSTON--The state intends to restore $210 million to cities and towns by the beginning of July after a court ruled the governor improperly withheld the money, House Speaker George Keverian '53 said yesterday.

"This is money that was promised cities and towns," said Keverian, (D-Everett). "We have both a moral and now legal obligation to provide for it."

Keverian commented after the House unanimously approved a resolution urging Gov. Michael S. Dukakis to include the $210 million in the final local aid payment scheduled for the end of the fiscal year June 30.

The resolution is not binding, but Keverian said he had "reason to believe the administration will comply with the request of the House."

"I have verbal affirmation...that they will do everything possible to make sure cities and towns have it in hand no later than the first week of July," Keverian said.

The House approved the resolution 145-0. Keverian proposed the measure, saying it would help ease the budget burden for cities and towns.

The state Supreme Judicial Court ruled earlier this month that Dukakis did not have authority to impound the local aid money when he cut the 1990 budget.

Dukakis has not specified when the state would restore the money, despite repeated pleas by city and town officials. Cambridge lost about $3.3 million in state aid.

In a statement after the vote, Secretary of Administration and Finance L. Edward Lashman said the administration is developing cash sources to meet the payment as soon as possible. "The action by the House is especially helpful in providing legislative direction as to how the obligation can be funded," Lashman said.

Keverian indicated the money would be folded into the current year's budget deficit, previously estimated around $1 billion. The state expects to pay off the deficit with bonds.

Keverian said bonding was a "less painful" method for paying the bill, since the tax burden would be spread over several years.

But he said this method should be used only when "absolutely necessary."

The resolution was passed during debate on the 1991 budget. Some legislators had proposed including the $210 million in next year's budget. But Keverian said "the money belongs in fiscal '90."

"I think this will go a long way to keeping faith with cities and towns," Keverian said.

The money will be returned to cities and towns along the same formula that it was withheld, legislators said.

Sheila Cheimets, head of the Massachusetts Municipal Association, said she was "delighted" with the developments. Also, she said it was acceptable for cities and towns to receive the payments at the end of the fiscal year.

Municipal officials have pushed lawmakers to keep 1991's local aid appropriation at the same funding level for 1990. Keverian said, however, the $210 million would not be considered part of the funding base for 1991.

But Cheimets said "everything is up for discussion. We will discuss the $210 million in the context of the whole budget."

State Rep. William Galvin, (D-Boston), warned that despite assurances that the money would be provided, the resolution "is a piece of paper."