Road to Flat Municipal Budget Will Require Layoffs
Down revenue from 2012, a preliminary budget offered to the council could not meet the sought zero percent tax and budget increases. Doing so would require cuts of at least $500,000, and in all likelihood, further layoffs.
The Village’s municipal budget is likely to fall short of a sought zero percent increase in 2013 unless the council is willing to slash more than $500,000, according to the proposal introduced to the council by manager Ken Gabbert Wednesday night.
Mayor Paul Aronsohn, Deputy Mayor Albert Pucciarelli, and Councilwoman Gwenn Hauck campaigned on a ‘zero based budgeting approach’ in the election last year that brought them to the council last July. This will be their first budget as a majority on the council.
The draft budget proposed by Gabbert, which council members called a “work in progress,” represents a 1.1 percent increase over last year’s final number of $45,2363,596. Two workers would be laid off and departments would have to be restructured under that budget scenario, the village manager said.
The drivers of the increase, said Gabbert, were a 7.5 percent rise in healthcare costs, $485,000 in contractual increases for public safety—primarily the police department—and $100,000 in negotiated salary increases for other union employees.
“We also have at this point a rather large decrease in revenue,” he said. By state statute, the Village can only include in the budget revenue it actually received in 2012.
“We had for whatever reason a drop in 2012, and we have to drop everything in 2013 even though we’re pretty sure that we’ll bounce back,” Gabbert told the council.
Federal money to repair damage sustained from Super Storm Sandy is unlikely to be received in 2013, Gabbert said. (A good portion of Hurricane Irene reimbursements from 2011 aren't even in purse yet.)
The council has been pushing Gabbert to explore scenarios where the town could pass a flat budget or one without tax increases.
Due to the drop in revenue, Gabbert said, a zero percent budget increase for 2013 would require $500,000 in cuts, all while a reassessment currently underway is expected to decrease assessed home values in the village.
“We had the budget going up 1.1 percent, we had the reduction in revenue,” he explained. “So we have a larger budget and less money coming from outside. So the totals of those two required additional 3.4 percent taxes over last year.”
Even greater cuts would be needed to pass a budget with a zero percent tax increase, Gabbert said. With the reassessment still ongoing, he said at least $1 million would likely have to be cut to hit a flat zero percent increase.
Both scenarios are almost guaranteed to require sizable layoffs. The village said goodbye to more than 30 workers in 2010, but has made few large-scale changes in staffing levels since. It's not yet clear how many would see the axe were the council to mandate deeper cuts.
With union contracts locked up over the next few years and revenue at a premium, it's clear the road to zero won't be easy. Complicating the matter, police manpower is at its lowest levels in years. Numerous firefighters are also expected to be retiring in the next two years, Patch has learned.
The average homeowner paid $3,970 in municipal taxes in 2012 and the volunteer 'Tiger Team' finance committee projected costs to soar in the next decade if taxes aren't controlled.
“Again...this is really rough stuff,” Gabbert cautioned council members during the budget scenario discussion Wednesday night.
Meetings between department heads and the council over the next two months will finalize line items on the budget, and Mayor Aronsohn indicated a desire to release the preliminary figures so that the public could be more involved in the hearings.
“I think it would be very useful for them to look at all the departments, all the proposals, all the recommendations,” he said, asking the council to consider making the numbers available on the village website.
Following meetings and public hearings, the final budget could be adopted as early as April 10, though it's more likely to be passed in June.
James Kleimann contributed to this report.