Select Board Explains Need for Override
Dear Paxton Community,
It has become abundantly clear, as our projected budget numbers are closing in on accuracy, that this will be a pivotal year for the budget in the town of Paxton. We are currently looking at a larger deficit than I have seen in my tenure on the board, and I’ve seen quite a few difficult budget years. As a town, we have, for many years now, found ways to address our deficits through some equilibrium between cuts and one-time revenues. In the process, we have become dependent on utilizing not only all our free cash but also using more revenue from ambulance receipts to balance the budget. These are revenues that are not guaranteed. The best practice is to use one-time revenues only for one-time expenses - or to be put away in stabilization and capital.
We have been trying to avoid a substantial override for longer than I have been on the board. The last overrides passed were in 2018 and were small - $100k for the operating budget and $300k for Wachusett budget. At that time, we recommended only enough to meet that need for that year. We have been doing the equivalent of living paycheck to paycheck, and not putting away for our future. Through the yeoman’s work of the Finance Committee and the Selectboard over the years, we have managed within our means, hoping that things would eventually improve. Unfortunately, it has become clearer over the years that we were only delaying the inevitable as we saw insurance rate hikes with Obama care, the economic impacts of COVID and a state formula for school budgets which does the town of Paxton no favors.
To shed a little light on what we are seeing this year, we currently have a deficit between $600-700k, which is likely to grow as we continue to analyze the numbers as they come in. Currently, even if we reduce the budget to only those items we have little or no control over (essentially schools, insurance, benefits, retirement, contracts, utilities), level funding all other items, we are still looking at a very large deficit.
In order to balance this budget, cuts to departments would be substantial and would have a devastating effect on the level of services provided to our residents. We would be looking at a much different town in terms of services offered, particularly from larger departments which include public safety and the DPW, which would have to shoulder a larger portion of the burden.
As I mentioned, we are still awaiting some budget numbers. As for schools, we have projected a 5% increase in the Wachusett school budget, and we should know in a few days what that number actually is. However, I believe 5% is likely to be a rather conservative estimation. For reference, a 6% increase adds an additional $75k to the deficit. It’s my understanding that Baypath’s assessment came in roughly 20% higher than last year. We will have more detail on this when we meet with them shortly.
In my opinion, we have no choice this year but to recommend a sizable override. It is was recommended by our interim TA, Charlie Blanchard, and I agree, given what we are seeing , that we should look to pass an override that will not just sustain us for this year, and put us in substantially similar positions next year, and the year after, but one that will serve as a budget correction and end our reliance on one time revenues so that we can plan for and stabilize our future as a town. I am forever grateful to Charlie who came in as an interim as such a key moment for us and with his experience both in other towns and with Paxton, was able to provide some real clarity on this issue.
This is still a very fluid subject without finalized numbers, but we know enough to realize that this year, we are not going to be able to find enough one time revenue along with budget cuts to make the ends meet. Based on analysis to date, it is clear that cuts of the magnitude that would be necessary this year would reduce the services that the Town provides to a level that would be unacceptable for the community, and that an override is necessary.