On May 5, Mayor Paul Lundberg presented his first budget to the City Council for consideration. The spending blueprint totaled $178.7 million, a 5.9% increase over last year.
Unfortunately, even with this modest boost, inflationary costs and expenses outweigh the city’s revenue streams so budget reductions are necessary to keep the place afloat.
A budget is among the mayor’s most important duties as it funds the operation of city government.
Today, Gloucester does not have the financial luxury of recent years when, for instance, the city held “listening sessions” to see how the public wanted to spend excess federal American Rescue Plan COVID-19 relief dollars.
At the national level, the president is doing all he can to kill federal grants and aid, especially to blue states such as ours. As a matter of fact, Massachusetts, a so-called “donor” state, sends roughly $46 billion more to Washington than it gets back in federal spending. That doesn’t sound right.
On top of that, last year the feds reduced funding to the commonwealth by almost $4 billion.
That type of cut is felt all the way down the financial food chain.
In the face of such unfairness, Gov. Maura Healey put a damper on municipal expectations regarding state sharing of any federal financial largesse. To help make up the difference, her fiscal 2027 budget proposal gives cities and towns $33 million more than this year.
Last week, state Senate budget writers proposed a $53 million increase, and the House bumped up local aid by $10 million. The legislators should reconcile their numbers by July 1 — the state budget deadline.
In the meantime, Lundberg’s fellow mayor, Samantha Squailia of Fitchburg, said that she is pleased to see lawmakers “move in the right direction, but it is not enough.”
The Massachusetts Municipal Association (MMA) points out that the State House is falling far short of the $351 million increase municipalities need.
As background, Proposition 2 ½, approved by Massachusetts voters almost 50 years ago, says a community cannot levy more than 2.5% of the total full cash value of all taxable property in the community. MMA says that such outdated constraints, that don’t keep up with inflation, leave places like Gloucester in a bind as they prepare their budgets with no new sources of cash.
Adding further uncertainty to the commonwealth’s fiscal stability is the fall election in which a ballot question will ask voters if they want to reduce the state income tax from 5% to 4%. If the measure passes, it would create a massive $5.1 billion hole in the state budget with implications for all. Emerson College’s polling unit released figures last Thursday showing 62% of voters favor the reduction. Who doesn’t like a tax cut.
The message to municipalities as they prepare their budgets: proceed with caution.
Like all cities and towns, as Gloucester feels the financial squeeze, its budget options are to reduce costs, raise taxes, seek a Proposition 2 ½ override, or a combination of those.
Making recent headlines is the school portion of the budget which makes up one-quarter of overall city spending. The School Committee doesn’t like what it sees from the mayor.
Lundberg, who is compelled by law to file a balanced budget, proposes to give the schools $1.25 million more than they got last year or $55.4 million in total. The schools want $56.8 million.
In the present fiscal climate, all city departments were required to belt-tighten as they prepared their budgets — the schools were treated no differently.
There are no extra tax dollars. There are no reserves at City Hall. And there is no free cash just lying around waiting to be spent.
What appears to drive the school budget is $9.1 million in required out-of-district special education costs; $9.2 million in out-of-our-control health insurance increases; and $51 million in contractually obligated teacher and paraprofessional wages and benefits.
So, with this $1.5 million discrepancy in the mayor’s and School Committee budgets, does that mean, as this newspaper headlined on May 1, that “20-plus positions” may be cut in the schools?
If the schools live within the city’s balanced budget like the police, fire, public works, and other departments, they will take the budget given to them and make the necessary adjustments and not argue that their budget is going to result in teacher firings. Or, as independently elected officials, they can take their case for more taxpayer dollars to the City Council and/or the voters.
Overall, this year’s rather austere budget seems fair to the taxpayers; is balanced as required by law; and helps secure the long-term fiscal stability of the seaport. The City Council should support it.
Gloucester resident Jack Clarke is a former Planning Board chairman and served as Mayor Paul Lundberg’s chief administrative officer during January as he took office.