Not a Great Budget… Not a Bad One

Let’s get something out of the way right now: There is no such thing as a “good” budgetary year for cities and towns.

We do not pretend to be experts, but based on our research (from writing our through the years columns for the past 30 years or so),  the only time that municipal governments were fairly flush with cash was during WWII. Wartime was good for the economy, and city and town budgets were the beneficiaries.

But other than that four-year period from 1941-45, the annual budget process has been a difficult one each and every year. In Massachusetts, the approval by voters of Proposition 2 and 1/2 in the early 1980s that limited year-over-year budget increases by a complicated formula added further constraints on how much city and town officials can increase their budgets to meet their needs.

Since the imposition of the strictures of Prop. 2 and 1/2, local aid from the state has made up an increasing share of the budgets for cities and towns, especially for our older cities. Municipal budgets now are extremely dependent on state revenues to an extent not imagined pre-1980.

The proposed town budget put forward by Interim Town Manager Terence Delehanty — which breaks the $50 million figure for the first time — falls in the above-average range thanks to the strong national economy and an anticipated increase in local aid from the state.

However, even in a relatively good budget year, there still are many difficult choices to be made by our town officials. The School Department says it will be facing a shortfall of $385,212 for the FY 2019 — hopefully, state aid will make up some of that projected deficit.

The Town Council will have to make difficult choices in other departments as well. In addition, there is the issue of pension liability and OPEB funding for retired town employees, otherwise known as the problem-everyone-wants-to-avoid-dealing-with-until-next-year. (We would note that, as the famed economist John Maynard Keynes once said, in the long run we are all dead — so maybe kicking the OPEB tin can further down the road may not be such a bad idea, other than for our children.)

However, all in all, our town is in pretty good shape for the year ahead. In the municipal budget game, we’ll take that outcome any time.