Friday, January 31, 2003
Searching for a silver lining in the state deficit budget
"I think what you're going to see is a re-invention of government," said Carlisle's state representative Cory Atkins when she discussed the state's budget crisis at the selectmen's meeting on Tuesday. She cited forecasts of a $900 million deficit in the current fiscal year (FY03) state budget, and a much larger, $3-$4 billion-dollar shortfall in FY04. The one positive note Atkins found in the situation is that lawmakers are now willing to consider a wide variety of money-saving changes, and, she said, "Everything's on the table."
Selectman Vivian Chaput suggested the state eliminate the requirement that towns pay "the prevailing wage" for municipal building projects, and said that "those prevailing wages add a significant cost" to the projects. Atkins said that this "very tight labor law" would never be addressed except in this economic environment, and pointed out that this is the type of suggestion she was seeking.
Atkins expects the legislature to pass a budget early next week, following the governor's announced cuts on Wednesday night, and the legislature's caucus today. But, Atkins predicted, further cuts will be needed and the legislature will probably revisit the FY03 budget in as little as a month.
The town expects state aid totaling about $500,000 quarterly, and selectman John Ballantine asked Atkins if school building assistance (SBAB) funds would be cut. Atkins had "no clear signals" from the governor, but thought "he can't get to his targets if he leaves out Chapter 70 funds."
Finance committee (FinCom) chair Larry Barton pointed out to Atkins that towns waste money whenever state aid payments are late, because the towns must then borrow money temporarily to meet daily expenses. He also asked for more flexibility for towns to recalculate the tax rate if the state reduces aid that was actually promised and included in the town's budget.
Barton favored augmenting the town's budget by tapping into funds devoted to specific purposes. The example he gave was the town's Community Preservation Act (CPA) fund. Atkins thought it would be better for the town to borrow from those funds with a specified repayment schedule; "otherwise it kinda doesn't get paid back."
Chaput asked what other towns were doing to deal with cuts in state aid. Selectman Tim Hult noted that a deficit of $4 billion in the FY04 state budget (out of a total state budget of about $22 billion) would result in an 18% smaller budget. He asked if towns should be counting on an 18% cut in state aid. Salaries make up a major portion of the town's budget and Ballantine thought salary cuts might be needed to avoid laying off people during severe budget reductions. Atkins said that negotiated contracts can be renegotiated. She added that she thought any such talks should be done in public rather than executive sessions.
The selectmen concluded the discussion by asking town administrator Madonna McKenzie to draft a letter to all town departments urging them to stay within their budgets.
© 2003 The Carlisle Mosquito