ESP needed to figure out budgetsDate: 5/13/2009 By G. Michael Dobbs
Managing Editor
NEWS ANALYSIS
Elected officials in the Commonwealth may want to consult any tea leaf readers, palmists and folks with Ouija boards during this budget planning time. With the state budget's local aid to cities and towns remaining unclear at this time, local officials have prepared their own fiscal year 2010 budgets and are hoping for the best.
There are so many factors affecting local budgets that are unknowns -- from how much lottery money will come to municipalities to whether or not the Legislature allows for the taxing of telephone poles and the creation of a local meals tax.
Officials in Chicopee and Holyoke have not counted any of the potential revenue enhancers in local budgets.
Down to the wire
Chicopee Mayor Michael Bissonnette believes the Legislature will go right until the July 1 deadline before coming up with a finished document. He thinks there is even a chance the Legislature might not be able to agree on a budget and be forced to pass a monthly budget as a stopgap.
What might save Chicopee from a negative impact by the state budget is a healthy stabilization account.
"We've been fortunate to have been prudent with other resources," Bissonnette said. "I'm not ringing the alarm bell."
Bissonnette praised his department heads for submitting budgets that came in 1.4 percent higher than last year. He said he asked for and received greater efficiencies.
With the school budget bolstered with $7 million of federal stimulus money, if there are any cuts in Chicopee they would come from departments such as public works, fire and police, Bissonnette said. The prediction about schools comes with a caveat -- there would be no cuts if the governor's promise to level fund schools to the fiscal year 2009 level is carried to the final budget, he added.
To provide savings for the future, Bissonnette is looking to refinance the city's pension system and is also considering a program for early retirements for employees 55 years old and older who have 10 to 20 years service.
Mayor Michael Sullivan of Holyoke has submitted his budget to the City Council for approval. Using numbers from the second version of the House budget, Sullivan said there might be a $500,000 surplus, but he "suspects that will change with the Senate budget."
His budget is $400,000 less than last year's, he said.
Sullivan said his budget does have some layoffs. There are 20 positions cut, which he said affects 12 employees as some of the positions had gone "consistently unfilled." Of those, six police officers and four firefighters will be affected.
"Holyoke is in a good financial position to adjust," Sullivan said, thanks to a healthy free cash account and stabilization fund.
He said the future of city services would have to be built on greater use of technology and less people.
One unknown now known?
The current state budget gap is still one unknown factor that could affect municipal budgets during the current fiscal year as well as the next. Sullivan explained municipalities might have to use money from their free cash or rainy day accounts to cover any additional cuts that would have an impact on their next budget.
Gov. Deval Patrick has already made two rounds of cuts during this fiscal year and announced last week the state is still facing a budget gap for the current fiscal year of an estimated $953 million.
In a press release dated May 4, state officials reported "April revenue collections fell $456 million below the benchmark, bringing the fiscal year 2009 total budget gap to nearly $4 billion. April revenues, traditionally the Commonwealth's biggest revenue month, declined nearly $1 billion compared to last April."
By Friday, Patrick had announced a bill he submitted to the Legislature that would fill the gap without making cuts to cities and towns. The measures would include:
"Drawing up to $461 million from the state's Rainy Day Fund and suspend the $100 million deposit authorized in FY 2008. The bill also calls for a $15 million reduction to the Health Safety Net Trust Fund in order to meet projected deficiencies within the MassHealth program. Even with this reduction, the Trust Fund is expected to end its year with a surplus.
"Securing a commitment from the Massachusetts Convention Center Authority to contribute $50 million from its reserves to help close the deficit."
The Legislature will be considering his proposal. The governor probably wouldn't mind having his tea leaves read on the future of his bill.
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