Williamstown Moving Ahead With Month-to-Month Spending Plan
WILLIAMSTOWN, Mass. — The town is moving ahead with a plan to pay its bills in the short term but is a long way from knowing what the budget picture looks like for the rest of the fiscal year.
With fiscal year 2020 ending on June 30 and no plans currently to hold the postponed annual town meeting, Town Manager Jason Hoch on Tuesday received the blessing of the Select Board to submit a "1/12th" budget to the commonwealth for approval of the town's July expenditures.
He explained the month-to-month spending plan to both the Select Board and Finance Committee in video conferences on back-to-back nights.
That plan is relatively straightforward and received full support from both panels. But Hoch was unable to provide any answers to what the town's finances will look like going forward because he cannot get the answers he needs to start redoing the budget in light of the COVID-19 pandemic.
The good news is that the primary source of town revenue, property taxes, appears to be stable. Receipts from the spring tax bills are comparable to those in years past, Hoch reported. The town will take a hit from lost tax revenue from the hotels and meals tax and the marijuana sales, although the latter resumed on Monday after a two-month break due to the commonwealth's closure of non-essential businesses. And local excise tax receipts figure to be down because, as Hoch said, "There's less of a rush to go buy new cars."
The big unknown is state aid, which accounts for a large percentage of local spending when both town hall and school spending are factored together.
"The state is similarly situated — with many more zeroes after them — as we are," Hoch said. "Their other revenues are also declining, and our share of that is likely to decline. We don't have any firm estimates yet. There are no shortage of estimates. … The range is anywhere from an unhelpful 10 to 50 percent.
"No one knows yet. We haven't figured out the actual impact of the lockdown period. What is going to happen in the transition? And is there a period where we need to plan for things slowing again?"
Fin Comm member Melissa Cragg noted that between state aid and cannabis and lodging/meals tax revenue, the town receives about $5.8 million of a $26 million total budget.
"That's about 22 percent of the whole budget," she said.
And it likely will be a while before Hoch knows just how much the budget will be blown up.
"The state process is notoriously slow in a good year, so it is unlikely that we'll see something in the next month," he said. "In the conversation we had earlier today with the [Mount Greylock Regional School District], the school also has received a range of guidances from 5 to 25 percent [cut in state aid].
"Again, it's going down, but that makes all of this harder at this point understanding what's the math problem I'm trying to solve? Am I going back and combing out $500,000 in expenses? A million dollars in expenses? $1.5 million? $2 million? It can be all over the map."
To help municipalities deal with the inevitable uncertainty, the Legislature in March passed legislation that allows towns and cities to operate on a month-to-month spending plan for a period that will extend 30 days after the end of the state of emergency declared by Gov. Charlie Baker.
Williamstown's budget for July, which has to be approved by the Department of Revenue, represents more than one twelfth of the annual spending for town operations included in the FY21 budget the Fin Comm reviewed this winter. That is because July's expenses include a number of bills that only come up once or twice a year, including half of the town's annual payment to the Berkshire Retirement System.
The July expenditures, all in, are more than $1.3 million; the total town spending proposed for FY21 was $9.1 million, making July's portion about 14 percent (one-twelfth would be closer to 8 percent). By contrast, Hoch supplied a rough estimate for the "1/12th" figure he will submit to the DOR for August, and that would be about $542,000, or 5.9 percent of the $9.1 million.
Neither July's nor August's spending plan include Willliamstown's assessment from the Mount Greylock Regional School District, which is paid quarterly, Hoch said. The next payment from the town is due in September, and he said that 1/12th budget, if he still is using that method by then, would include that figure.
Hoch said he more than likely will need to bring an actual FY21 spending plan to town meeting by early October at the latest in order to send out property tax bills.
And the town always could have foregone the month-to-month spending approach and proceeded with town meeting, dealing with the social distancing implications that would entail. But even if it could overcome the myriad logistical concerns, Hoch argued that the 1/12th budgeting makes sense for now.
"There will be a point where we have clarity around state aid and a bit more clarity on hotels and meals, there's a point at which we can set a number and hope we get there," he said. "Right now, on the town side, looking at almost $2 million play between state aid and the entirety of rooms, meals and cannabis taxes, that's a big roll of the dice right now.
"Once we approve an appropriation, we're committed to raising that money. So if revenues don't perform, when we set a tax rate in the fall, we're looking at taxes for that. I don't want to do that."
The Finance Committee voted unanimously to support Hoch in continuing to budget month-to-month as long as he can. He will need to come back to the Select Board in June for approval of a 1/12th August budget to send to DOR for final sign-off.
The school district, meanwhile, is finalizing its own 1/12th budget, which it will submit to the Department of Elementary and Secondary Education for review, Hoch said.
In other business on Wednesday, the Finance Committee welcomed its newest member, Dan Caplinger, who was appointed to fill the seat previously held by Susan Clarke, and voted to endorse a sentiment expressed by the Select Board one night earlier advising the Mount Greylock Regional School District about the need to hold onto reserve funds.
As for the cloudy FY21 budget picture, Hoch did note one silver lining for Williamstown taxpayers: They were not looking at a local tax increase prior to the pandemic.
"This is a more comfortable position to be in because of the budgets that town and school were able to bring," Hoch said. "Our starting point had no tax increase, which is reassuring as opposed to — if we'd stopped everything in February, we were at the finish line and we had a 7 percent tax increase just to do like for like, these impacts would be even more painful to try to contemplate."
Revised Summary 2021 Budget for Williamstown, Mass. by iBerkshires.com on Scribd
Tags: fiscal 2021, williamstown_budget,
