BOSTON - Despite a spike in homicides, Brockton cannot afford to replace retiring police officers who account for nearly 8 percent of its force. Franklin is cutting nearly $142,000 in overtime salaries for firefighters. Randolph schools are so short on funds that a selectman describes them as almost "a day care instead of a school system."

As state government faces a $1.3 billion budget deficit, Massachusetts towns and cities are being overwhelmed by a budget predicament of their own. Increasing costs of energy, health insurance, pensions and construction materials are forcing hard decisions.

Some say there is no end in sight.

"It's going to get worse year by year before it gets better," said Michael Widmer, president of Massachusetts Taxpayers Foundation. "And I don't know what will make it better."

There is ample evidence that Widmer is not overstating his case: E The state's own financial troubles, going back to 2003, have meant less money for local aid. Geoffrey Beckwith, executive director of the Massachusetts Municipal Association (MMA), said that after adjusting for inflation, total local aid is still $566 million below 2002 levels.

E The same math shows that the combined total of local aid's Additional Assistance and Lottery distributions is 11 percent less this year than 2002 levels, the MMA said. Chapter 70 and school transportation aid is down 10 percent.

E In the past two years 121 communities, 34 percent of the state's cities and towns, voted on Proposition 2 1/2 overrides that would raise local property taxes above the 2.5 percent annual limit. According to the Department of Revenue; 78 passed. So far this year, six overrides have been rejected out of 10 votes.

As local aid has limped behind inflation rates, communities face above-inflation increases for everything from health insurance to asphalt.

Between 2004 and 2008 heating oil prices increased by nearly 65 percent. Gas prices increased by 185 percent between March 2005 and 2008.

"The costs increase is having a huge impact," said Beckwith. "The fuel for heating buildings and gas prices have spiked enormously and hit the communities hard."

Soaring health insurance costs have grown by an estimated $1.3 billion for the state since 2006. Local budgets were hit even harder. A Department of Revenue study found municipal health insurance costs increased by 91.17 percent between 2001 and 2006 compared to 48 percent for state government.

Pensions for municipal workers are also taking a bigger budget bite. A 2006 study by the Pioneer Institute, a tax policy group, said cities and towns have lost more than $1.6 billion in pension investments since 1996, leaving it up to taxpayers to keep the funds afloat.

These combinations of factors have made life a day-to-day struggle for municipal officials.

Fitchburg School Superintendent Andre Ravenelle has had to cut more than 170 of the city's 850 school positions since 2004, 50 of them during the last year alone. "My budget this year for fiscal 2008 is $100,000 less than it was for fiscal year 2007, which is kind of unheard of," Ravenelle said.

Salem Director of Finance Richard Viscay said 30 non-teacher positions were cut to help close the school department's $2.9 million 2008 fiscal year budget gap.

Over the last four years Brockton schools cut about 35, nearly 3 percent, of its school positions.

School Superintendent James Marini said North Andover's elementary school libraries are essentially closed.

"We're trying to allow students to sign out books through parent volunteers," Marini said.

School superintendents are not the only officials cutting programs, staff and services.

Wayne Sampson, the executive director of the Massachusetts Chiefs of Police Association, said the statewide personnel shortage, close to the national average of 10 percent, is forcing departments to operate shorthanded.

And fire departments are facing the same slow degradation of cuts and attrition.

The Brockton Fire Department cut about 20 firefighters, or 10 percent of its workforce, over the past four years.

Marshfield will likely see one or two of its fire fighters, an estimated 3 percent of its workforce, laid off next year. Last year, the city cut four positions.

Many local governments around the country are facing some of the same problems as the economy flirts with recession. But Massachusetts is in a in a worse position because it never fully recovered from the post-9/11 economic downturn.

A 2004 study by the Urban Institute, a non-partisan economic and social policy research group, found the 2001 national recession led to massive revenue shortfalls in the states across the country.

The study, which analyzed 10 states, said Massachusetts reduced local aid by 5 percent between 2003 and 2004 to compensate for budget gaps.

Massachusetts and Michigan, which saw a 3 percent decrease, were the only two states to cut the local aid budget drastically. The others, such as New Jersey, cut programs and tax exemptions or imposed local tax increases to reduce the strain on local aid.

With little additional help expected from state government, Massachusetts communities are pooling finances, resources and staffing to make scarce local aid funding go farther.

Beckwith of the municipal association said more than 100 communities across the state have joined MUN Energy, a program started in 1998, to help communities purchase energy together at lower prices.

Many communities have also developed mutual aid pacts, approved by vote at town meetings, which allow municipalities to share costs and increase the efficiency of local services.

For the most part, these pacts share libraries resources, allow bulk purchases of goods, and coordinate police and fire departments through dispatch centers. Some communities are consolidating public works, sharing equipment for trash collection and waste management.

"It's not happening only because of the fiscal crisis," Beckwith said. "Cities and towns are really interested in doing this anyway. They want to increase efficiency as much as they can."

Beckwith said 70 percent of the municipalities in central Massachusetts have established or agreed to vote on a mutual aid pact. Statewide, more than 250 communities are sharing resources and limiting costs by joining public health mutual aid pacts.

That may increase. Legislation supported by the municipal association would allow cities and towns to enter aid agreements without the approval of voters.

While communities are experimenting with regionalism, state officials are also proposing their own cost saving measures.

Gov. Deval Patrick's Municipal Partnership Act, proposed in February 2007, would allow municipalities to add up to two cents on meal taxes and end a waiver on property taxes for utility company poles and facilities.

The Legislature passed another Patrick initiative to allow cities and towns to join the state's pension and health insurance funds.

But one of the state's top politicians thinks more needs to be done.

House Speaker Salvatore DiMasi recently announced that he was considering the creation of a Municipal Audit Bureau to monitor the ways communities are spending money.

But ultimately, many municipal leaders think the crisis will only end when the state develops a guaranteed funding plan for the cities and towns. Widmer and the municipal association have proposed a revenue sharing plan that would provide municipalities a 40 percent share of the state's income, corporate excise and sales taxes.

But such a plan is unlikely until the state recovers from its long-running budget problems.

"It's unlikely local aid will increase anytime soon, which puts enormous pressure on municipalities," Widmer said.

This story was written by Rachel Kolokoff and Maite Jullian and reported by Kolokoff, Jullian, Travis Anderson, Candy Chan, Cara Hogan, Rick Ahrens, Matt Kakley and Neil Mirochnick. They are reporters in the Boston University Statehouse Program, of which The Sun Chronicle is a member.