K-School Study Pushes Change In Aid Grants

Legislative observers have singled out a provision allocating revenue based on the specific needs of cities and towns as the key component of a compromise local aid bill released last Friday and suggested that articles by a Harvard professor may have spurred its adoption. Currently the state and system gives money to communities with more people and small property tax bases, but does not take into account the overall ability of the municipality to raise revenues or its service needs.

Changing the aid distribution formula to favor cities with greater service burdens has been suggested several times over the past decade, but has never made its way into legislation.

One factor that may have helped this year was a pair of articles appearing in the New England Economic Review, authored by Helen F. Ladd, associate professor of City and Regional Planning at the Kennedy School of Government.

The articles, which ran in the January/February and March/April issues of the publication, criticize the current state aid distribution formulas. "The costs of providing basic local government services (e.g., police, fire, schools) do not vary in proportion to local tax resources, even as augmented with intergovernmental transfers. Thus cities and towns with smaller per capita tax bases would be forced to provide fewer or lower quality services to their residents," Ladd wrote.

Ladd said yesterday that in the past, "the state has used local aid distribution as means of balancing the budget," adding that what is needed is a more predictable program of "revenue sharing."

The aid proposal, endorsed by Gov. Edward J. King and leaders of the House and the Senate, includes provisions insuring a minimum amount that communities with low revenue-raising abilities should receive.