Every tax is a pay cut. Every tax cut is a pay raise.
Citizens for Limited Taxation
|Framingham finance official offers grim outlook||October 27, 2009|
|Dan McDonald 508-626-4416||Metrowest Daily News|
FRAMINGHAM -- The forecast was grim, the news sobering.
Chief Financial Officer Mary Ellen Kelley expects the town's spending will outpace revenue in coming years by a large margin if significant changes are not made to the way it does business.
The gap is projected to be $11.8 million in fiscal 2011, and could be $21.2 million in fiscal 2015, Kelley told Town Meeting in Memorial Building's Nevins Hall.
That deficit does not include the use of additional room and meals tax or telecommunication tax revenues, said Kelley.
But even if those provisions are passed, which would mean $2.7 million in fiscal 2011, the gap will not be closed completely.
At some point, the town will have to cut services to bridge the fiscal divide.
"Again this is a forecast...so we're supposed to do something about it," said Kelley.
Later on in the night, Finance Committee Chairwoman Elizabeth Funk said "Business as usual is simply not an option."
Local revenues, said Kelley, are expected to drop by $645,461 or 3.7 percent from last year fiscal 2009 to this year.
Kelley chalked up that dip in part to the "nonexistent" vehicle market, which means that revenue from motor vehicles excise fell. She expects that tax to decrease next fiscal year as well.
Likewise, revenue building permit fees are also expected to remain stagnant.
For every $83 of residential investment or $66 of commercial, the town generates $1 from permit fees, said Kelley.
She expects that revenue to "remain relatively stagnant," in fiscal 2011, begin to increase modestly the next year, and return to "regular levels" in fiscal 2013.
State aid this year decreased by more than $4.1 million or 12.3 percent from the original fiscal 2009 level, said Kelley.
Over the next two years, she expects state aid to decrease and flatline. A cut to fiscal 2010 state aid is still possible.
Compounding matters, this year $2.5 million in stimulus funding was used to help fund the School Department budget. That money won't be there next year, which will contribute to the need for a 7 percent increase in spending from the town's general fund.
Health insurance costs are expected to increase by $2 million or 9.5 percent in fiscal 2011 and 8 percent in subsequent years, said Kelley.
Right now, health insurance makes up 15 percent of the budget, a number that could increase to 18 percent by fiscal 2015.
Property and liability insurance is expected to increase by 10 percent or about $101,000 every year, said Kelley.
Retirement costs are expected to grow by 3 percent next year. Energy, meanwhile, constitutes 2.6 percent of the budget or $4.8 million this year. That number could rise to $5.7 million by fiscal 2015.
Kelley suggested that now is not a time to panic, but stressed that Framingham must "reduce the cost and size of government."
"The town of Framingham is not that different than most towns," said Kelley.
In other business, Town Meeting posthumously promoted John Costanza, a Framingham Fire lieutenant to captain. He died while responding to a fire in 1979.
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