In this first week of 2011, the political world is focused on the federal and state level inaugurations. Those of us at the local level, however, are getting our first view of significant projected budget shortfalls for next year.
On Monday night, I presented a financial projection for my town with a budget shortfall ranging from $1.2M - $1.5M in order to maintain a level-staff budget next year. The exact size of the shortfall will be determined by how much of a cut in local aid Millis is subjected to in the final state budget.
Tuesday morning, I see this article about Natick's beginning to 2011:
http://www.metrowestdailynews.com/newsnow/x224241661/Natick-facing-budget-gap-of-more-than-4M
Later Tuesday, while talking to a co-worker who lives in Wellesley, I find that they are also facing a significant shortfall. A shortfall that could mean scaling back the music an art programs in that district.
Yet, this reality is not unexpected. Many of us have been expecting it in each of the last 3 years...only to be bailed out by the Federal government "stimulus" bills each year. The idea behind the stimulus funds were to save jobs (no new jobs were created) until the economy turned around. A recovered economy would then allow the government to replace these funds with tax collections. This was a gamble that did not pay. The national and state economies have not fully recovered.
More importantly, however, there has been little done at the state or federal level to slow the rate of healthcare costs, nor any significant reforms to the public pension system. These two costs have absorbed all of the revenue generated by the slight economic recovery. The lack of reform at the state level trickles down to higher costs at the local level.
In response to these higher costs, local officials have engaged public unions to request re-open existing collective bargaining agreements, taking harder stances on costs of new contracts...and make cuts to the most basic public services.
As we move into this new year there appears to be no more stimulus money, higher health and pension costs, and no real reforms. The result is municipalities being left paying off the cost of this failed gamble.
