Friday, July 8, 2011

"consciously and carefully readjust policy parameters over time"

This paper provides an updated analysis of underlying municipal fiscal health, using a measure of municipal gap and recent data for Massachusetts cities and towns. The analysis shows that large disparities in municipal gaps exist among cities and towns, and that the disparities have grown in recent years. 
Created for the purpose of fiscal equalization, unrestricted municipal aid is not highly correlated with municipal gaps in Massachusetts. In fact, municipal gaps cannot explain the majority of the variation in municipal aid. This partly reflects large ad hoc aid cuts over the past 20 years. The consolidation of municipal aid programs in FY 2010 has not improved the aid distribution—that consolidation has simply perpetuated the existing inequity.
For those really interested in the systemic fiscal problems that Franklin and by extension the Commonwealth of MA faces in the redistribution of state aid, this paper from the Boston Federal Reserve Bank is a good read. I would love to obtain the full data set used to see where Franklin falls on the charts. The paper identifies the top 10 cities but stops there.

For the full text of this paper you can follow this link to the Federal Reserve website and download or view the PDF.



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