At Tuesday night’s Finance Committee meeting, Chairwoman Debbie Ricci distributed preliminary budget worksheets for FY08 that showed a potential deficit of $730,000, a number that was confirmed by Finance Director Lorraine Leonard Wednesday afternoon. With no significant new revenue sources, the predicted deficit continues to be driven by the costs of health insurance, special education, and the cost of labor in general, with the addition of estimated increased costs to operate the new library of around $170,000. The worksheet numbers do not include any cost-of-living increases for those union contracts that have not been settled, including teachers and police.
Ricci led the committee through preparations for its December 12 meeting, characterized by Ricci as the 2008 fiscal year budget “kick-off meeting” with the Board of Selectmen and the School Committee. Ricci’s suggestions included four major components: “Where we are now,” halfway through the FY07 budget cycle; some key assumptions that will affect future spending; first-draft budget summary for FY08, including some “what-ifs” on labor increases and capital expenses; and the anticipated property tax impact for FY08.
Frustrated with the chronic shortfall in revenue to support the town and school budgets, committee member George McKenna said, “We need to hear clearly from the Board of Selectmen and the School Committee how to address this deficit.”
“We are running cheap,” member Cindy Russo said, “We need to find more money, and that is beyond this committee’s charge.”
Current year budget position
Town Finance Director and Interim Town Administrator Lorraine Leonard presented a recap that included an update of anticipated overruns for the current fiscal year. The reserve fund transfer needed to cover these overruns could be in excess of $200,000, all attributed to the school department, mostly for special education costs. In addition, this figure does not reflect recent changes to the so-called circuit-breaker funding by which the state reimburses school districts for special education costs. According to Leonard, Gov. Mitt Romney cut $2.3 million from the state’s circuit-breaker budget line. A reimbursement figure of 75 percent of eligible costs, which was all but guaranteed and built-in to the current budget, is now predicted by Leonard to be closer to 72 percent, if that. The effect of this change, combined with unexpected out-of-district tuition increases, could result in up to $170,000 additional special education costs.
