By Joshua Resnek
If Revere were a hostage about to be executed and the budget process a firing squad, then it could be said that the city dodged death following this year’s budget-making process. In fact, the city dodged many bullets, that is, it escaped the most drastic cuts and wholesale chops with the $127 million budget signed, sealed and delivered.
“We need reserves to survive fiscal year 2010, and after that, we haven’t much cash left to work with,” said Mayor Thomas Ambrosino.
The mayor said the proposed budget couldn’t have been accomplished if it weren’t for an enormous amount of cutting.
Although dramatic cuts were made, no fire stations have been closed, and the police department is slightly smaller than it was this time last year.
“A day of reckoning is coming at some point,” said the mayor, “but that day isn’t here yet.”
The city has been hurt by smaller state distributions, a soaring payroll, higher costs for city health insurance and unfunded pension liabilities.
The city’s pension fund assets dropped about $30 million with the near collapse of the stock market and the onset of the deep recession currently experienced.
Payroll, Ambrosino said, is about one-third of the city’s budget, or slightly over $20 million.
In order to reduce payroll, city employees must be laid off. At this point, the mayor believes everyone who can be laid off without disrupting city services are already gone.
However, there are other formidable hurdles.
Health insurance totaled $15 million for the year, up millions from the year before, and is an unsustainable expenditure, said Ambrosino. Also unsustainable is the city’s pension liability, he added.
The city budget is $73 million.
The School Department budget is $54 million.
Looking ahead is dreary, said the mayor.
With payroll costs rising and health insurance premiums for city employees soaring out of sight, the city will need $5-$6 million it won’t have on hand next year in order to maintain this year’s expenses, all of which, said Ambrosino, is a virtual impossibility.
“We need relief. Health insurance would be a good place to start. If the city’s unions all agreed to join the GIC – the Group Insurance Commission – the city could save almost $3 million with no difference in the quality of care,” he said.
The only difference would be in co-payments that would be slightly larger with the GIC plan.
The city’s unfunded pension liabilities were heading for a planned 2024 payoff.
“That’s out the window. Now we’re looking to extend the schedule,” said the mayor.
The mayor held out some hope for new revenues.
He talked about the possibility of added gaming revenues.
The state government is said to be ready to consider casino gaming licenses or slot machines in the fall for the state’s remaining dog racetracks and also for Suffolk Downs.
“That’s the only glimmer of hope I see,” said the mayor. “That, and smaller hikes in two local taxes on restaurants and hotel rooms.”
As of October 1, the city’s meals tax will be raised to .75 percent and the hotel tax will rise to 2 percent.
“City services have been reduced. We don’t have as many personnel. Sidewalk repairs and tree cutting will be cut back. You’ll still get city services in Revere, but those services will be delivered more slowly,” said Ambrosino.
2 comments for “Mayor closes the book on 2010 city budget; fears loom about ‘11”