LANESBOROUGH, Mass. — The town will need to close deficit gaps averaging $1 million per year over the next decade to keep up with the expected capital projects.
Finance Committee member William Stevens and Selectman Robert Barton averaged expected revenues and expenditures into a 10-year plan that showed deficits growing from $250,000 to more than $1.5 million. They met with department heads Monday night to get ideas on how to close that gap.
The forecast assumes a 2.7 percent increase in revenues so override votes were not considered, but may still be needed to tackle the deficit.
"We're looking at compounding $1 million-a-year deficit," Barton said. "We all need to look at what we can do differently."
The two officials looked at upcoming building projects — such as a new Mount Greylock Regional High School, renovating the police station, maintenance work on other town buildings and purchasing new vehicles — and leveled the costs out for 10 years. From there, they factored in average increases and decreases in the rest of the budget to paint the "sobering" picture.
"While there is a little bit of gloom here, there isn't panic," Barton said. "The purpose is to let everyone here have a whack at this."
The town is hoping department heads can find ways to reduce costs or delay capital projects to both whittle down the deficit and to give the town further insight on those expenditures. Selectman John Goerlach said he could already see places to reduce in the forecast.
On the brighter side, Barton said the town is expecting a larger amount of free cash than expected to roll into the next budget, which will close the gap in 2013, and that the town's median income, based on the 2010 Census, has become the third-highest in the county, which could be a sign that residents have higher incomes and would support an override vote.
Then again, Stevens said that since the town only has about 3,000 people, it only takes one family with a very large income to throw that number off so the support may not be there.
Either way, there is still projected to be a deficit and town officials need to find a way to close the gap between revenues and the expenditures. That deficit, however,is based on many assumptions that Stevens and Barton believe "makes sense." With extra input they hope to turn those assumptions into actual figures.
The biggest factor to the deficit is the recent decrease in state aid. The town is expecting a net decrease in funding this year of about $90,000. While Gov. Deval Patrick's proposed budget calls for level funding, there is an increase in mandated charges, Stevens said. The forecast assumed a 5 percent decrease in state aid over the next 10 years.
The financial forecast shows the town taking the biggest jump in revenues and expenditures in 2014; that will continue to increase into 2020, then take a small drop in 2021 as current debt falls off the books before continuing to climb.
The largest capital project would be a new high school and that was estimated at $7 million. The town is not expecting that project until the 2017 budget.
Many of the capital expenses were previously delayed because of the economic crash. Barton said the town will still need to be careful for at least the next year when it comes to taking on larger projects.
Lanesborough 10-Year Forecast