When an abbreviated annual town meeting finally convenes in late June, voters will be asked to reduce the proposed fiscal year 2021 school and municipal budgets by as much as $2.2 million in response to declining revenue.
And those cuts will be relatively easy compared to the prospects for the following fiscal year, Town Manager Sarah Stanton told members of the Select Board at their virtual meeting Wednesday afternoon.
Stanton plans to have a detailed budget proposal at the May 27 Select Board meeting. She said she and Superintendent of Schools Jon Sills “will be working diligently to avoid layoffs if we can. But it is a significant amount of money.”
“I actually am more worried about fiscal 2022,” she commented. “We have reserves, we have a stabilization fund, we are accommodating our fiscal 2021 budget to this norm. Twenty-one is going to be a very interesting test year on what happens in ’22. It could be a much grimmer picture.”
Stanton is part of a fiscal planning working group that also includes Sills, Select Board Chair Ed Pierce, School Committee Chair JoAnn Santiago, Finance Committee Chair Ben Thomas and Finance Directors Victor Garafalo (town) and Julie Kirrane (schools).
She said they agreed that “we are not going to fill this gap with one-time funds because they may be needed in 2022.” Adjustments to the long-range capital budget also will be in play, she said. The town has actual and potential millions of dollars in its stabilization fund, free cash, overlay reserve and unused tax levy.
Pierce said, “The first thing you usually look at is expense cuts” for a multi-year scenario. “And these are going to be painful, there’s no question about it. We are going to have to really look hard at what is proposed.”
“I don’t want to marginalize how tough some of these cuts are,” Stanton agreed. “A lot of work went into budget preparation that reflected the needs of the town. It’s tough to make cuts but it’s a necessary step right now.”
There are two areas responsible for the projected deficit:
- Approximately $1.1 million in reduced local receipts, including projected 40 percent drops in hotel and restaurant taxes, as well as declining revenue from licenses and permits and jet fuel from Hanscom Field. The biggest likely hit will be a 60 percent reduction in the target for short-term investment receipts.
- A reduction of some $1.2 million in local aid. Although the two chambers of the Legislature and Gov. Charlie Baker are not aligned, Stanton said at this time she is projecting 15 percent reductions in unrestricted state aid as well as funding for schools.
Asked by Select Board member Bill Moonan about the fate of state aid for municipal road and bridge construction (Chapter 90), Stanton said that’s “something no one wants to seem to talk about.”
Stanton said the working group’s current estimates indicate a $1.2 million to $1.5 million shortfall in the school budget and a $600,000 to $700,000 in the municipal forecast.
There are actually savings during the current fiscal year that could offset some of the shortfall, Stanton noted, including a budget freeze, savings in the utilities budget from empty buildings, as well as debt restructuring and snow and ice removal. Indeed, there was no inter storm deficit this year, Stanton said. “Check one in the win column for 2022,” Stanton said.
Thomas thanked Stanton and Finance Director Victor Garofalo “for all the hard work they’ve done. It’s hard to move forward without firm data. We have lots of tools in our toolbox and we use different tools at different times. We are going to ride this out as best we can.”