Northampton facing roughly $800K budget gap next fiscal year

  • Northampton Mayor David Narkewicz, right gives his preliminary fiscal 2019 budget presentation before a joint meeting of the City Council and School Committee Tuesday night at JFK Middle School. GAZETTE STAFF/Bera Dunau

@BeraDunau
Published: 1/31/2018 12:19:50 AM

NORTHAMPTON — The city is expecting to face a roughly $834,000 shortfall next fiscal year, a gap that would be plugged from a special account created in the wake of an override that passed in 2013.

That’s the message that Mayor David Narkewicz gave in a presentation before a joint meeting of the City Council and School Committee Tuesday night. The meeting marked the official start of the budgeting process for fiscal 2019, which begins July 1.

“It’s just a great presentation to kick off the year,” said Ward 7 Councilor Alisa Klein, following the presentation.

In it, Narkewicz went over the city’s fiscal condition. He also showed how Northampton stacked up against nine other communities in the region — Amherst, Longmeadow, Easthampton, Westfield, West Springfield, Agawam, Greenfield, Holyoke and Chicopee — when it comes to home values, property taxes and other key statistics.

In these comparisons, Northampton was on the upper end of single-family home values and corresponding tax bills, while being on the lower end for residential and commercial tax rates and unemployment.

The mayor cautioned that estimates for the coming fiscal year are based off what is known now, and that numbers like health insurance costs and state aid could wind up different from the current estimates.

Based on the current data, however, Narkewicz showed new revenues coming in at $2,542,109 and new expenses coming in at $3,376,334 — for a shortfall of $834,225.

The mayor said, however, that the city will be able to cover this shortfall with money dedicated from a fund created after a $2.5 million override passed in 2013. The override was intended to allow the city to maintain level services for four years by placing money in the fund for three years and then drawing it down to help cover a projected shortfall in fiscal 2017. The fund, however, grew in both fiscal 2017 and 2018 and the city did not need to tap into it, Narkewicz said.

“This would be the first time we would draw from that fiscal stability fund,” said the mayor, if the city uses the money to plug a gap next fiscal year.

The fiscal projections that the mayor laid out Tuesday show that the fund will last until fiscal 2021 before it won’t be able to cover the predicted shortfall between new revenue and expenses. At this time, Narkewicz said that the city will have to ask for a new override or make cuts to the budget.

One of the things that Narkewicz highlighted in his presentation was the low amount of money Northampton gets in state aid, in comparison to its neighbors. He also said that the governor’s proposed fiscal 2019 budget would increase state aide to Northampton by $66,081, or 0.43 percent, over the current fiscal year.

The mayor’s presentation appeared to be received well by both the City Council and School Committee, whose members asked several questions after the presentation.

One new source of revenue for next fiscal year that was brought up by both Ward 2 Councilor Dennis Bidwell and Councilor At-Large William Dwight was recreational marijuana. The mayor noted that he was preparing to introduce legislation that would exercise the city’s option to place a 3 percent local tax on marijuana. However, both he and the councilors acknowledged that such revenues could not be counted on at this time.

“A gossamer thin hope,” was how Dwight put it.

Ward 2 School Committee Member Laura Fallon said that there would likely be a number of parents lobbying for increases to the school budget this year, and that the mayor’s presentation had shown her that the issue was with state funding.

“The problem is the lack of state aid,” she said.

Narkewicz said that such efforts should be directed at legislators around both the issue of state aid to schools and fully-funding charter school reimbursement.

Narkewicz also spoke favorably of the Fair Share Amendment, a ballot initiative that would institute a tax on millionaires to fund schools and infrastructure. However, he also spoke against a ballot initiative that would reduce Massachusetts’ sales tax. Neither will have an impact on next fiscal year.

The mayor’s presentation can be found at northamptonma.gov/DocumentCenter/View/9568


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