'Conservative' Worcester 2021 Budget Comes In At $721.8 Million

WORCESTER, MA — The Worcester City Council on Monday will officially take hold of City Manager Edward Augustus Jr.'s fiscal 2021 budget proposal. Like every city and town across the state, Worcester is dealing with an uncertain financial future due to slowdowns at the state and local level caused by the coronavirus pandemic.

Augustus has proposed a "conservative and flexible" 2021 budget that comes in at $721.8 million, which is about 4-1/2 percent — or $31 million — higher than the 2o2o fiscal year.

The budget is conservative because Augustus is holding the line on almost every department, except for fixed costs that increase every year — things like salaries across all city departments and paying off municipal debt. Fixed costs total about $137 million in fiscal 2021, $5.5 million higher than fiscal 2020. The city is also continuing under a hiring freeze through fiscal 2021, except for crucial health and safety jobs.

Augustus is also building a nearly $4 million contingency fund into the budget. That will allow the city some flexibility if there are larger cuts at the state level due to coronavirus, or a larger downturn in local revenue.

The effect of coronavirus on Worcester is apparent on the revenue side of the 2021 budget. Augustus is preparing for local revenue generated from car, hotel, and cannabis taxes to be much lower. Hotels and recreational marijuana stores are closed for now, and the Registry of Motor Vehicles is allowing drivers an extension on registrations due to coronavirus.

In total, local receipts may drop by as much as $2.5 million compared to 2020, according to the budget. That includes $550,000 less in hotel and meal taxes, $100,000 less from cannabis sales, and $250,000 less in permit and license fees.

Even with the pandemic downturn, many city departments are soldiering on. The police department is planning to field a new class of recruits to fill at least 17 vacant positions. The fire department is hoping to hire up to 20 recruits by next spring through a federal Staffing for Adequate Fire and Emergency Response grant. The Mayor and all City Council members are set for a raise in 2021, although very small — about $323 per Councilor, and $388 for Mayor Joseph Petty.

Augustus wants to maintain Recreation Worcester summer programs, if conditions allow. But the programs would likely be paid for with federal grants and donations.

The biggest increase in the budget is for Worcester Public Schools due to a nearly $20 million increase in Chapter 70 state education aid. A large part of that increase will go toward hiring dozens of teachers and educational support staff, plus three school psychologists and English learning instructors. Another big school budget driver is transportation. A new contract with Durham, the school bus provider, and an expansion of bus routes will cost about $2.4 million in fiscal 2021.

Another increase that many cities and towns are dealing with is recycling costs. China, the world's largest importer of recycled goods, has put tough new restrictions in place. The public works budget is rising by nearly $800,000, mostly due to higher recycling costs.

Also for 2021, the water and sewer rate is recommended to rise by 2.83 percent, or about $17.41 for the average single-family home over the whole year. The combined increase is based the sewer rate rising, the water rate for Worcester residents will remain at $3.67 per hundred cubic feet.

After Tuesday's City Council meeting, the Councilors will begin hearings on Augustus' budget proposal. The Council can cut items, and can ask for some items to be increased. The fiscal 2021 budget year begins on July 1.