By Adam Swift
The town is looking toward a possible debt exclusion vote in the near future as it faces challenges with the school budget and other potential municipal needs.
Town Manager Tony Marino highlighted the proposed Fiscal Year 2025 capital and operating budgets at the annual spring forum at the senior center on Tuesday night.
“The draft of the FY25 budget was presented to the finance commission and the finance committee on April 4,” said Marino. “The final proposed budget will be presented to the Town Council on May 7. The finance committee has already started reviewing the budget and meeting with department heads. They started with the finance team and my department on April 11, and they have meetings coming up over the next … month, month and a half.”
The town manager is proposing a general fund budget of just over $61.2 million for FY25.
Sarah Johnson, the town’s finance director, highlighted the base budget document, the new process to determine the municipal budget introduced by Marino last year.
“We started with the base budget document last year,” said Johnson. “What this does is it shares the revenue that we get from the town between the schools and the town.”
In FY24, Johnson said the schools had $35,121,803 and the town had $24,486,799.
“We take that revenue, and we back out last year’s excluded debt, put in the new year’s excluded debt, we add back the governor’s state aid increases,” said Johnson. “We usually get a little more money, unless there is a recession, and the state does cut some of our state aid. But in this case, we are sharing more of the state aid.”
The state tells the town how much more the schools get in Chapter 70 funds, as well as for the unrestricted government aid for the town side of the government.
Last year’s property tax levy for the town was just under $34.5 million, Johnson said, which is the starting point for building the FY25 budget.
Under Proposition 2-1/2, the town is able to add 860,969 to the levy for FY25, Johnson.
In addition, she said the town is estimating that it is going to get $550,000 in new growth next year.
“The total estimated levy that we are expecting is $35,837,161,” said Johnson.
The starting point that the town looks at for all of its budgets for the next fiscal year is revenue, Johnson said.
“Towns can get in trouble when they start budgeting to their expenses versus their revenue, so we always want to be conservative and look at our revenues first,” she said. “We look at what the governor would give us for state aid and then we look at the tax levy, which is the biggest portion, and then the state aid is the next. So it is about 64, 65 percent that we get from taxation.”
A little under 25 percent of the revenue comes from state aid, and then the last big piece of revenue for the town is local receipts, such as automobile excise taxes.
The town then adds up all of the estimated revenues, as well as accounting for assessments from the state.
In the proposed FY25 budget, Johnson noted that this is also the first time in several years that the town will not be using ARPA federal Covid relief funds in the budget.
“That is $225,000 that we are not going to get this year,” said Johnson.
When all the revenues and assessments are added up, Johnson said the balanced budget figure for the town in FY25 is $61,205,014.
Marino discussed some of the budget challenges the town is facing moving forward, specifically within the school department.
“A lot of the grant money they got over the years and the ARPA money we were able to put in the budget, it masked some of the needs they had,” said Marino. “But they have school budget shortfalls, they’ve got a substantial one this year. Winthrop’s going to need to bring a budget override, school override forward sooner rather than later for the residents to vote one.”
Marino said the process is typically for the school committee to come in and request the debt exclusion from the town council, who would then approve moving it forward for a town vote.
“That will happen, hopefully in the near future, that’s got to come,” said Marino. “We haven’t done one here since 2009. With average increases between 5 and 7 percent for the schools every two to five years, it’s just not realistic to think that they are going to be able to live within 2-½”
Marino said the town is also looking at potential funding for large infrastructure projects over the next 10 years, including potential new fire and police stations and water and sewer projects.
In addition, the town also needs to manage the increased expenses for town and school health insurance and other related expenses.
“Our health insurance went up almost 10 percent this year, and that’s not just here, that is everywhere,” said Marino.
In addition, new collective bargaining agreements are coming and could impact the FY26 budget.
The town will also need to look at funding to deal with the impacts of sea level rise, which could include town funds as well as grant funding, the town manager said.
“We’re going to need grant funding at all levels over the next 10 to 20 years to deal with the sea level rise, sea walls and living levees and some of the other options we are looking at to address flooding,” said Marino.