To help ease some of the impact of property tax limits, Proposition 2 1/2 included provisions establishing the Local Mandate Law and the Division of Local Mandates (DLM) within the State Auditor's Office.  With limited financial resources, cities and towns would find it increasingly difficult to support unfunded state mandates.  Accordingly, the Local Mandate Law sets the general standard that post - 1980 state laws and regulations that impose new costs on cities, towns, regional school districts or educational collaboratives must either be fully funded by the Commonwealth, or subject to voluntary local acceptance.  See Chapter 29, Section 27C of the General Laws.  DLM is responsible for determining the local financial impact of proposed or existing state mandates.  Any  community aggrieved by law or regulation that is contrary to the standards of the Local Mandate Law may request an exemption from compliance in Superior Court, and submit DLM's fiscal impact determination as prima facie evidence of the amount of state funding necessary to sustain the mandate.

DLM maintains a Legislative Review Program to analyze pending legislation on mandate-related issues.  To ensure that the local cost impact of legislation is considered by the General Court, DLM reviews significant bills, prepares preliminary cost studies, and contacts members of the Legislature to make them aware of the Auditor's concerns.  In addition, DLM responds to requests from individual legislators, legislative committees, municipalities, state agencies, and governmental associations.

Chapter 126 of the Acts of 1984 expanded the Division's mission by authorizing DLM to examine any state law or regulation that has a significant local cost impact, regardless of whether it satisfies the more technical standards for a mandate determination.  The statute is codified as Section 6B of chapter 11 of the General Laws.  Known as municipal impact studies, Chapter 126 reviews include cost-benefit analyses and recommendations to the General Court.

Through these functions, DLM contributes to the development of state policy that is more sensitive to local revenue limits, so that cities and towns can maintain more autonomy in setting municipal budget priorities.