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Sullivan prepares for future state budgets cuts

By G. Michael Dobbs

Managing Editor

HOLYOKE Mayor Michael Sullivan reported last week the city has a certified balance of $6,001,807 in its free cash account, which is good news for the city with possible mid-year budget cuts coming from the state.

Sullivan told Reminder Publications he would not be transferring any of the free cash into the city's stabilization account, which now stands at $9.6 million. Rather, he will use "some of it to soften the blow" of the expected budget cuts.

Over the years, he explained, improvements to roads, sidewalks and parks have often been underwritten by funding from the free cash account. He will look to use part of it for more capital investments, he added.

A number of municipal accounts will need additional funding, such as police and fire personnel accounts, heating, litigation and insurance. About $450,000 will be needed to balance the city's fiscal year 2009 budget and, according to a press release from the mayor's office, this infusion of necessary funding will be done before the next tax rate is set.

What concerns him is the on-going budget crunch on the state level. He is considering a number of options to take in reaction to the anticipated mid-year cuts this fall and to the reduction in state funding for FY10 that would occur next year. Among these measures are a hiring freeze, possible lay-offs and closing down City Hall for one day a week to save fuel.

He added that he would rather take those kinds of steps this year rather than next year when the next state budget is released.

"Six months later [from now] we'll have to make hard decisions," he said.

What is also complicating the budget picture is the possibility of the Question 1 passing that would decrease state revenues by 40 percent by with the elimination of the state income tax.

Sullivan predicted that whether or not Question 1 passes there would be reductions in services due to state budget cuts. He is concerned that grant programs, such as the Shannon Grant used to combat the gang violence, would be cut.

"I will continue to monitor the changing economic environment, prioritize out needs and look for cost-cutting alternatives," he said.