Town Faces 1.5 million budget deficit
Published on January 17th, 2001
STONEHAM, MA - Lost jobs, pay cuts and reduced local services may be the ugly after shocks from a more than $1.5 million deficit shaking down the Town of Stoneham in fiscal 2002.
“Fixed costs are killing us,” said Selectman Cosmo Ciccarello.
An anticipated decline in state aid and sharp increases in utility prices and health insurance account for the bulk of the deficit. Town Administrator Jeff Nutting has reported figures predicting a 20-plus percent increase in health insurance costs and a 70 percent increase in natural gas prices. (Stoneham operates on a July 1 to June 30 fiscal year.)
Two thirds of the deficit comes from the School Department budget. The School Department projects a $1.9 million deficit and anticipates only $800-900k from town revenue.
Superintendent of Schools Joe Connelly said 10.3 percent of the 10.6 percent increase in the fiscal 2002 school budget comes from fixed costs.
“We have problems in areas we can’t control,” Connelly said.
The Superintendent defines fixed costs as contracted salaries, building maintenance and utilities, health insurance and state mandated special education programs and Massachusetts Comprehensive Assessment Systems (MCAS) exam training.
For the past few years Stoneham school budgets have risen only around five percent annually. But an anticipated decline in Chapter 70 state aid (aid to public schools), a new contract with staff, new state requirements to provide MCAS exam training and new school buildings coming online mean that an otherwise level-funded budget will increase more than 10 percent in 2002.
“We may have to look at the school projects,” Ciccarello said. “But we are getting the 63 percent reimbursement now, and you have to take it when you can get it.” (Reimbursement comes from the State Building Assistance Bureau which requires that schools be built by a certain date to receive funds.)
At the Jan. 11 School Committee meeting, State Representative Mike Festa (D-35th Middlesex) told the Committee that state aid to schools will be less than desired in the coming years.
“With hospitals asking for a $175 million Medicare bailout, the $350 million tax cut from Question 4 (on the November 2000 state ballot), declining state revenue and every school across the state looking for money...we will have to make cuts,” Festa said. “You will be obligated to make cuts, too.”
School Committee Chairperson Jeanne Craigie said that the Committee may have to consider “the dreaded override,” referring to an override of the Proposition 2 1/2 cap on property taxes.
Finance Committee Chairman Richard Gregorio called dealing with the budget a “policy decision.”
“Selectmen will have to decide if they want an override, or if not, where they want to cut,” Gregorio said.
Ciccarello said that the Town Stabilization Fund is more than a million dollars. But he added, “That’s for an emergency.”
Craigie said that if the schools are forced to cut jobs, middle school and elementary jobs will go first.
Send more money
The only other option is somehow getting more money than estimated.
In an effort to do so the School Committee voted 4-0, with Marie Christie absent, to join the Suburban Coalition, an organization of communities working together to convince Mass state legislators to make the public school funding formulas more equitable.
Three years ago Finance Committee member John Warren told the School Committee that state funding for public schools was out of whack. Under the 1993 Education Reform bill formula, Stoneham got $640 per pupil from the state compared to Wakefield’s $930 and Tewksbury’s $2,022 in 1998. The School Committee has been pleading with local legislators to help ever since.
Last year Festa, Representative Paul Casey (D-34th Middlesex) and Senator Richard Tisei (R-3rd Middlesex) suggested joining the Suburban Coalition. This year the School Committee joined and asked the legislators what else could be done to get more state money.
Besides waiting for the State Legislature to revise the funding formula — predictions ranged from 2002 to 2004 about when this would pass — and efforts to maintain minimum levels of funding, which did not make it last year, the legislators again turned to Stoneham Finance Committee suggestions.
Senator Tisei referred to Gregorio’s idea of “getting a payment in lieu of taxes for MDC land.” The state makes annual payments to communities instead of quarterly taxes for state owned land within those communities. But the state does not consider MDC land as state property because of a bureaucratic distinction between “the State of Massachusetts” and “the Metropolitan District Com-mission,” which is a state agency.
Passing legislation to qualify MDC property as state land could mean thousands of dollars. But Stoneham needs millions, and passing such a bill, like all others, will take time.
As Stoneham heads bravely into this new fiscal year, the future seems grim. The budget is tight, and the man who helped usher Stoneham through a similar crisis in the 1980s, Town Administrator Jeff Nutting, has given his notice.
But no one’s hanging it up yet. Town officials are preparing to save jobs and services, or at least, to help dull the pain of unavoidable cuts.
...if the schools are forced to cut jobs, middle school and elementary jobs will go first.
— School Committee Chairperson Jeanne Craigie
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