Saturday, January 24, 2009

An update on budget cuts...

After reading Gov. Patrick's speech yesterday at the Massachusetts Municipal Association I learned that the proposed 9.7% cut will be applied to the "Lottery aid" and "Additional Assistance" line items in the FY09 Cherry Sheets.

Note: “additional assistance” provides unrestricted general purpose aid to municipalities

See summary below.

[click table to enlarge]

For Longmeadow the FY09 total of these line items is: $1.51 million .... so it looks like the financial hit will be $146,000. This is only my guess and not an official number.

It is possible that Gov. Patrick may elect to apply some other formula to decide how to distribute these cuts particular given the fact that the city of Boston has such a high amount of “additional assistance” in their cherry sheet allocation. A straight application of the 9.7% cut translates to $22 million cut for the city of Boston of which $16 million comes from the “additional assistance” line item.

For Longmeadow it looks like the underperformance of investment income and excise tax receipts (-$200,000) as FY09 revenue sources + higher than budgeted snow removal costs (-$25,000) that were discussed at this week's SB meeting (reported in an earlier post) will be larger items.

At this point total budget cuts required for FY09 may total ~ $371,000.

Looking forward to FY2010 Governor Patrick said that he will be proposing a level funding of Chapter 70 funds for education and a significant cut in “Lottery aid” and “additional assistance” funding with the net result of a total state aid reduction for cities and towns of 7.1%.

For Longmeadow this FY2010 budget reduction would amount to ~$480,000. It looks like the upcoming FY2010 budget process will be very difficult.

On Wednesday, January 28 the official FY09 budget cuts for each town will be announced. Hopefully, it will be equal to or less than the $146,000 estimate.

1 comment:

John J. Fitzgerald said...

Hello Jim,

Thanks for posting this information. It is helpful in our on going assessment of our financial situation.

Good work!


John J. Fitzgerald
School Committee