Budget Issues Force Cutbacks

Q. Do you feel the "lights out" program is achieving its goals for the community?

A. I believe the majority of Town residents support the elimination of non-priority street lights, although about 50 residents who are dissatisfied with the plan have contacted us in various ways to express their objections. While not all 400 lights have been removed yet, the taxpayers will definitely realize an avoided cost of $35,000 in the first year, and increasing savings each year after that as electricity becomes increasingly more costly. The program's secondary goal of lowering the Town's overall energy consumption will also clearly be realized during the course of the coming year. I proposed to the selectmen a goal of reducing energy consumption by town departments, facilities and vehicles of 5 percent in the coming year. I believe we can actually do better than that, and the streetlight reduction program will help.

Q. Can the town expect more cuts in services? 

A.Yes, I think we can expect one more year of budget cuts. It would have required a 3.5 percent increase in the FY11 budget to maintain all of the services we provided in FY10. However, in order to try to stop the growth in property tax bills, the selectmen set a goal of a 0.0 percent tax increase and asked me to present a zero-growth budget. This required eliminating $550,000 from the "level services" budget. We saved $90,000 by eliminating one of two Deputy Police Chiefs, $77,000 in Fire Dept. overtime, eliminated the Park Rangers, and a made a variety of other cuts. We haven't yet seen the impact of diminished police and fire services, because the staff work hard to try to maintain services levels despite the cuts. But these reductions already baked into the budget.                          

For the next budget (FY12), I proposed a goal of a "no override budget"," NOT a "zero-increase" budget.  My hope is that the selectmen will allow a budget increase of 3.0 to 3.5 percent, so that we can keep the (reduced) services we now have. If the selectmen strive for another no-increase budget, we will likely need to cut another $600,000 in services.

This level of reduction will be far more visible to the public, as it will likely result in the elimination of staff positions. The result might be lower hours of operation in some departments, or longer response-times in other departments. Tony Logalbo is anticipating "another difficult year budget-wise", which means we can't expect an increase in state aid, and our local revenues are likely to show only anemic growth.

At the same time, our costs for mandated expenses such as funding the Retirement System and employee group health insurance are increasing at a rate well-above the Consumer Price Index.  So I think we can expect one more year of difficult budget development.  And with the low-hanging fruit like eliminating employee training and seasonal employees already picked, the cuts that come next year will likely be more visible, as the streetlight cuts were this year. 

I DON'T expect to propose further reductions in the streetlight account unless the economy turns dramatically worse than it is now.

Q. Are you making cuts like these so that you can meet the obligations of the pension funds and union contracts?

A. Yes, in part. As mentioned above, our pension and group health insurance costs are increasing well-above the CPI. 

In addition, the police and fire unions are scheduled to receive a 3.4 percent salary increase on July 1 (today) in the third year of three-year contracts.  All other employees are receiving 2 percent salary adjustments. In a zero-increase budget, all salary increases (both union and non-union) must come from operational accounts in order to keep the increase at zero. 

So yes, salary increases are forcing us to trim other areas of the budget. But I feel a modest salary increase is reasonable, given that the demand for services has increased and the staff are generally "out-straight" with services requests.  The Library is but one example, where the poor economy has resulted in a 10 percent increase in circulation of materials, as people are less able to buy books and music.  This 10 percent increase in activity is taking place in the context of no increase in staff. 

For this reason, I think it is important to request a modest salary increase to recognize the staff's efforts – and I am pleased that the community has supported that. (Please note that although the Police are due for a 3.4 percent salary increase on July 1, the Legislature's failure to fully fund the State's 50 percent share of the Quinn Bill program will result in a net salary DECREASE for most officers).

Q. Would it help the town to have the local income tax revenue, or would you still be looking for places to cut?

A. As I understand the income tax proposal, a two percent local income tax would cover about half of the $70 million tax levy. But any budget increase, for salaries, pensions, or health insurance, would still be subject to the Proposition 2-1/2 process. It would have the effect of lowering property taxes by about 50 percent, and theoretically would benefit folks like retirees on a fixed income, by lowering their property taxes while having a minimal impact on their income taxes. But high income folks would be hit fairly hard. So it would change who the burden of paying for local services falls upon; but I don't know if it would make town residents more or less likely to support higher spending for those local services.

Q. Is meeting those contractual obligations creating an undue burden on the town budget? Or not?

A. The police and fire union contracts, while slightly more costly than the 2 percent increase for non-union staff, are not out of line with what other communities are providing.  So I don't believe those agreements are placing an undue burden on the town.  And we will begin negotiations for successor agreements in a few months.

Q. What is the purpose of the selectmen's appeal?

A. In the first year, I believe some of the funds were used for fuel assistance and paying other important bills for those with financial challenges, as determined by the Hugh Cargill committee. More recently, I believe the vast majority of the money has been dedicated to property tax relief for residents in need. I believe qualifying residents are eligible for up to $300 per quarter or $1,200 total off their property taxes. I know, as Stan Black mentioned, the program has been consistently over-subscribed for some time. 

Selectmen's Administrative Assistant Ruth Lauer said the selectmen's appeal started in 2006 to provide tax relief to qualified homeowners. Lauer said the first allocation was made in 2007.

"Since that time there have been allocations each quarter to a generally increasing number of households," said Lauer. Starting with seven, for the past few years at least 50 households have applied for assistance, Lauer noted.