Acton’s proposed budget for next year includes over $2M in deficit spending. This deficit will be covered by spending down the reserves by $2M, which is contrary to the advice from the Mass Department of Revenue for towns like Acton. But this is Acton’s plan for the next two years, until the reserves are at risky low levels. Then, presumably, Acton boards will be forced to do something to face the economic reality of this recession.
Acton boards will be forced to do something, but there are only three possibilities for them. The first possibility is that State aid picks up enough to cover the deficit … which no one is suggesting as possible. The second possibility is that Acton’s boards will stop deficit spending and bring budgets in line with revenue, something none of Acton’s boards has shown the political will to do. The third possibility is that when the reserves run out, Acton’s boards will be forced into proposing a major override to raise taxes enough to cover the deficits, a risky course of action that no one will talk about openly.
There is a fourth possibility for Acton. The voters could speak. Voters could go to Town Meeting and vote down this year’s proposed deficit spending budgets. The Acton boards would then need to come back with another budget accordingly. This possibility would require about 1300 voters come to Town Meeting and just vote “no,” 1300 out of Acton’s’ 13,000+ voters; a Town Meeting attendance that happens every five years or so.
Discussing the first possibility, does anyone believe that State aid will increase anytime soon? This year the Governor’s budget is promising to cut State aid by only 5%. Some skeptics think that this 5% will turn into a 10% cut after the election in November, and Cory Atkins even hinted that up to 15% is a possibility. Whatever happens, it does not sound like an increase this year, and anyone reading the economic news can not predict improvements in the next several years.
As to the second possibility, could Acton begin to live within its means, and stop deficit spending? This would require a political will not in evidence. This year Acton boards will propose to Town Meeting new budgets based on spending as much as they can without an override. This means a tax increase of nearly 2.5%, and use of $2M of the reserves. Acton needs large scale savings to avoid this alternative.
Are large scale savings available to Acton? Would they potentially allow retaining school and town services substantially as they are, but end deficit spending? The answer is a qualified “yes,” qualified, because many cost reduction proposals to reorganize Acton to operate more efficiently have been outlined in Fincom cost reduction proposals, but Acton boards lack the political will to implement them.
With reserves being spent down to risky low levels, what is the plan by the Acton boards to restore the reserves? Everyone hopes the economy improves substantially such that State aid improves and things get better, but is anyone able to predict this? According to Acton’s bond rating agencies, Acton should keep reserves above 5%, but this is not the plan based on the recent Acton Leadership Group forecast.
As to the third possibility, a future override, this seems to be what is headed Acton’s way. In two years or so, the reserves will be nearly spent. Faced with significant budget reductions, an override might be the only way out that the Acton boards can see.
Unless the voters act. If enough voters show up at Town Meeting to ask questions and just vote “no,” the Acton boards will conclude that voters are OK with deficit spending and covering the deficit with reserves. And, until the voters make their feelings felt with emails and votes, the voters have to expect more of the same next year and the year after.
At town Meeting, your vote makes a statement.
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