Rising costs and sluggish growth in state aid are leaving municipal budgets in Massachusetts in a tightening bind and increasingly unable to adequately respond to demands for better local services, according to a new report that could set the stage for future tax debates in the Legislature.

The Massachusetts Municipal Association , the trade group representing cities and towns, highlighted the issue in its report while also objecting to restrictions on local property tax increases and a ban on local income and sales taxes that they say prevents municipalities from raising revenue to meet community needs.

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Between 2010 and 2022, inflation-adjusted spending on operations in Massachusetts municipalities grew by 0.6

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