PEPPERELL — Pepperell faces a possible loss of over $135,000 in local state aid as well as a loss of over $2 million in aid to its regional schools, a grim forecast that town officials said could adversely impact the budget and prove devastating.
According to a budget guideline letter sent out to department heads last month, the Massachusetts Municipal Association is estimating cuts of as much as 10 percent across the board. This is due to the fact that the state is facing an estimated $2 billion shortfall for fiscal year 2010.
“At this point we’re hoping for the best,” said Finance Committee Chairman George Zacharakis. “Right now, operationally, our department budgets are to the bone. If we start seeing huge cutbacks in our aid, we could be talking layoffs, less town services… but it’s still too early to tell.”
For the last few years, town departments have had to deal with painful operational budget cuts, totaling a loss of nearly 10 percent since FY 2009. Now in the midst of preparing the budget plans for the FY 2012, department heads must once again prepare themselves for the worst.
“We are all anticipating a cut, not looking forward to it by any means, but the size of the cut is what we’re concerned about,” said Town Administrator John Moak.
By Jan. 7, the Finance Committee has asked all department heads to present a budget plan indicating both a 1 percent increase and a 1 percent decrease to the department’s net 2011 budget. They have also asked for a detailed description of the impact to the department as a result of the requested budgets, as well as a list of capital program requests.
In the letter, they write, “The Finance Committee is well aware of the challenges facing our department heads under these difficult circumstances. Our goal is to work collaboratively with you through the entire budget process.”
Regardless, not much can be done with the town budgets until the state budgets come in, which will not be for another couple of months.
In addition, the rises in gas prices as well as union contract negotiations are two other tricky items department heads must work into their budgets. Union contracts are up this year, and, as of last month, gas prices in Massachusetts averaged $3.03 per gallon, 44 cents more than it was this time last year, according to a AAA survey.
Moak pointed out, “Town departments use quite a bit of gas; police, highway, fire. That may be outside of that 1 percent realm that they can do. Heating oil has gone up significantly.”
After the Finance Committee has received all of the budget proposals, they will meet and discuss with individual departments. In May, the committee will make suggestions at a town meeting as to how they think these budgets should be funded.
“In a nutshell, we’re proceeding with caution and we’re waiting for the state budgets to come in and let us know what our next step is going to be,” said Zacharakis.